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EU tendering costs 9,000 homes a year

Freeing housing associations from European Union tendering requirements would allow them to build up to 9,000 extra homes a year, according to the National Housing Federation.

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Public procurement rules require public bodies and social landlords to publish a Europe-wide call for tenders for supplies, services and works valued above a certain threshold. Landlords must follow detailed rules governing all stages of a contract award.

Complying with the rules costs housing associations £30 million annually - money that could be used to leverage £450 million a year of private investment, according to the NHF. If that sum was used for building homes, the sector could fund an additional 9,000 homes a year.

The trade body is using a three-month consultation on updating the rules, launched by the European Commission, last month to argue housing associations should be exempted.

David Orr, chief executive of the NHF, said: [Procurement rules] are highly bureaucratic, extremely expensive, reduce our capacity to build new homes and bring no obvious benefit. This is a piece of red tape we can do without.’

The federation argues that housing associations should not be classed as public bodies subject to EU procurement law. The EU defines public bodies as ‘financed, for the most part, by the state, regional, or local authorities’, or subject to management supervision by public bodies. The NHF argues that neither condition applies.

The European Commission is considering simplifying procedures, allowing better access to contracts for small businesses and implementing rules which could oblige public buyers to take into account social concerns. The commission says consultation on the plans will form the basis of legislation to be tabled in 2012.

Lawyers told Inside Housing any changes to the rules would be slow to happen. Rebecca Rees, a partner and EU procurement law specialist at Trowers & Hamlins, said: ‘It is great we have the opportunity to feedback but the commission moves very slowly. It is not going to make a difference to housing associations’ day to day practices for long time.’

Gordon Brockington, executive director at repairs contractor Morrison, said the current system was not flexible enough. ‘The rules should allow us to put in non-compliant bids to allow us to drive real innovation’, he said.

In numbers: EU procurement rules

£3.93 million
threshold for works contracts

threshold for supplies/services

£30 million
Estimated annual cost to housing associations of complying

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Unnecessary red tape must be cutUnnecessary red tape must be cut

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