Policy confusion and weak procurement are costing residents

Speed is also important. Procurement shouldn’t be a handbrake on delivery. The UK housing sector, especially in retrofit, is notorious for delayed procurement. The Warm Homes: Social Housing Fund (WH:SHF) and Warm Homes: Local Grant (WH:LG) were awarded late last year, and many bidders have yet to go to tender or award works. This does not bode well for meeting the programme’s 2028 deadline.

It repeats a pattern of underspend seen throughout the Social Housing Decarbonisation Fund (SHDF). Some councils returned up to 24% of their SHDF demonstrator funding. As of June, only 27% of planned SHDF Wave 2.1 installs had been completed, with the programme originally due to end in September. This is unacceptable when it comes to fuel poverty and Decent Homes upgrades. We have a duty of care.

“The UK housing sector, especially in retrofit, is notorious for delayed procurement”

Procurement delays also cripple the supply chain. The government has committed £600m to construction skills. The gap is demand, not skills. Without transparent, efficient procurement, industry gears up for works that don’t materialise. There’s no point training apprentices who can’t find work.

This is an especially acute problem in retrofit right now. The recent Budget ended the Energy Company Obligation (ECO) scheme, which currently installs energy efficiency measures in around 5,000 low-income homes each month and would have delivered upgrades to more than 288,000 households over this parliament.

Whatever your views on ECO, abruptly ending it directly threatens around 10,000 jobs in the retrofit supply chain, most of them in small and medium-sized firms that cannot withstand months of no or low cash flow.

The government has committed to releasing the replacement Warm Homes Plan before Christmas. It is expected to focus on local government delivery, and add another £1.5bn to a procurement infrastructure that has not delivered the money it already has on time.

The Procurement Act 2023 and the wider shift toward framework-led buying were designed to simplify and professionalise procurement. But the rise of for-profit framework providers has created the opposite effect.

There are now more than 20 frameworks that cover retrofit and asset improvement. Domna is already on 14, with many more we do not have the capacity to apply for. A good application takes upwards of 40 hours. Small and medium-sized suppliers cannot bid for everything, which means good providers are excluded not for lack of capability but because they cannot absorb endless bidding cycles.

Many contracts are still direct awards routed through whichever framework suits a buyer and their preferred supplier, bypassing true competition. This adds 1-3% for the framework provider without delivering genuine transparency or competition. Hundreds of thousands of pounds have flowed out of the sector in fees for what is often little more than a routing mechanism.

Original frameworks such as Procure Plus and Fusion 21 were meant to reduce internal burden and offer quality assurance. But the proliferation that followed has delivered neither efficiency nor consistency. Instead, we have a saturated system where value for money is harder, not easier, to evidence.

“Good providers are excluded not for lack of capability but because they cannot absorb endless bidding cycles”

Devolved procurement experiments have stalled, leaving providers bypassing the very systems designed to improve oversight. These efforts were meant to unlock significant investment into retrofit, awarding work through combined authority frameworks. Yet almost a year into the first year of WH:SHF, very little work has gone through these bodies.

The frameworks were slow to mobilise, leaving local authorities and housing associations forced to bypass them to meet delivery timetables. That is the opposite of what was intended. These systems could still deliver real transparency and value for money. But they were not ready at launch, and they were also not made mandatory. This has led to opaque side deals and delayed real work on the ground.

This is not a niche administrative issue – it determines whether thousands of residents live in cold or healthy homes. WH:SHF is at least £300m behind schedule already. This means thousands of homes left waiting for essential upgrades.

Behind almost every stalled procurement sits a team with too few people managing too much risk. One local authority indefinitely postponed its WH:SHF procurement because of staff shortages. That is not a criticism of dedicated staff, but of systemic failure.

When internal capacity collapses, delivery slows and buyers revert to the path of least resistance. That often means rolling forward existing suppliers even when performance is poor. One major local authority recently reappointed a supplier they were deeply dissatisfied with rather than running a fresh procurement, because the process would be too onerous.

If the system is sclerotic, accountability weakens, to say nothing of innovation, and trust. Residents cannot understand why upgrades take so long. Providers cannot understand why identical work follows 10 different procurement routes. And the public cannot see where money is being spent or why.

What needs to change? We need a few meaningful, government-run frameworks, and they need to be mandatory.

These frameworks should be public, accountable and designed around delivery needs, not fee generation. This is far better than allowing local bodies to opt out of systems whenever internal pressures overwhelm them.

It is unacceptable that Decent Homes and decarbonisation delivery are delayed because an internal team is short-staffed. Government should fund additional procurement posts within local authorities if it expects them to manage complex, multi-year programmes. If central government is putting the burden on local authorities to manage procurement and deliver even more funding, it needs to help them achieve this.

Well-designed procurement creates a fair, competitive market that rewards quality and accelerates delivery. It helps upgrade homes faster, protects residents and supports local jobs.

Most importantly, when procurement works, residents never have to think about it. The only thing they notice is that their homes are safer, warmer and better maintained. That is the outcome we should be designing for.

The Warm Homes Plan could be transformative. But one year in, we are already behind, in large part due to procurement. Let’s finally deliver it properly and fairly.

Anna Moore, chief executive, Domna