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Focus on quality in procurement rises after Grenfell
More than half of the country’s social landlords place more emphasis on quality as opposed to reducing cost following the Grenfell Tower fire, a new survey has revealed.
Research by procurement framework provider Fusion 21 showed 51% of more than 80 social landlords said quality had become a bigger consideration in procurement decisions since the fire.
This survey, provided exclusively to Inside Housing, represents the view of landlords that collectively own more than one million homes.
The refurbishment work carried out on Grenfell Tower, which included installing the deadly combination of cladding and insulation, was procured in 2012 with an original budget of £9.7m.
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This was too low for Bouygues UK – the firm already contracted for work on the Grenfell estate – which turned it down. A second contractor, Leadbitter, was refused after pricing the work at £11.3m.
Rydon finally secured the contract after submitting what was described in council papers as “the most economically advantageous tender”.
Procurement often scores bids based on ‘quality’ and ‘price’ with landlords giving a weighting, such as 60/40, to each area.
Contractors have previously complained that too much emphasis on price has driven down the quality of works in the social housing sector, particularly in response to the government’s value for money agenda and the 1% rent cut introduced in 2015.
In her foreword to the report, Sarah Rothwell, head of member engagement at Fusion 21, said: “It will surprise no one that, in the wake of the Grenfell Tower tragedy, the work of procurement teams around compliance has been the focus of renewed scrutiny.
“We’ve seen a shift over the last few years, with members placing their emphasis in favour of quality, rather than cost, when procuring goods and services. The findings of our research confirm this trend.”
The report said there was a “greater focus on quality especially in relation to fire safety”.
Many of the 49% who said that nothing had changed as a result of Grenfell claimed the quality of the goods and services they procured “was already crucial”.
However, more than half (55%) of those who took part in this research reported that pressure to procure at the lowest price remained, with 156 saying this was “often” the case.
“Funds are stretched,” one senior manager told researchers. And a department head said: “Restrictions are in place on budgets.”
A total of 47% of research participants listed rent cuts as the biggest external factor on their work, while 27% referred to “pressure from government to build new homes”.
The research was presented at the Housing 2018 conference in Manchester on Wednesday.
