London procurement body enters creditor’s agreement to pay debts
Social housing procurement body ceases trading
A London-based social housing procurement consortium serving more than 300,000 homes has ceased trading.
The Cyntra consortium was wound up last week and is understood to have entered into a creditor’s voluntary arrangement to pay back money owed.
The move could mean that some of Cyntra’s creditors, which include its owners and board members, may not be repaid in full.
No one connected with Cyntra, including its interim managing director Jerry Gilbert, responded to calls for comment from Inside Housing, therefore the reasons for the consortium winding up remain unclear.
‘I know that it is being folded and as far as I know the members wanted to put it to bed in an orderly manner,’ said David Mosey, partner at law firm Trowers & Hamlins who was involved in setting up the National Change Agent, which managed the establishment of 15 procurement consortia across the country.
Cyntra was formed in 2005 with eight founding members. These were: Ascham Homes, Barnet Homes, Ealing Homes, Hammersmith and Fulham Housing Management Services, Hillingdon Council, Hounslow Homes, Kensington and Chelsea Tenant Management Organisation and Sutton Housing Partnership.
According to the NCA annual review for 2010/11, the last year for which figures are available, Cyntra made £41.2 million of savings from a total spend of £228.9 million since it was established.
The 15 consortia saved £293 million out of a total spend of almost £2 billion since they were established.
The Homes and Communities Agency, which took over responsibility for the consortia last year, said it ‘would continue to encourage registered providers to use these organisations where it makes commercial sense’.
A spokesperson for the HCA added: ‘It is disappointing to hear that Cyntra has ceased trading, but we continue to believe the consortia across the country play a crucial role in helping the sector be more efficient in its procurement processes.’
Mr Mosey added that he believed the majority of consortia remained very healthy, adding that ‘Cyntra was obviously an exception to that’.
Mr Mosey also said that he was in talks with organisations over the possibility of extending the procurement consortia model to cover new build housing. The HCA said that it would be ‘very supportive’ of such a move.
Cyntra was established
number of homes served
total spend since established
total savings made since established
Source: NCA annual review for 2010/11