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Meeting delivery targets
Clive Feeney of the SPA explains the role of procurement in Scotland’s Affordable Housing Supply Programme
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The Scottish Government, through the Affordable Housing Supply Programme (ASHP) and the allocation of £3bn of funding, is targeting the delivery of 50,000 affordable homes in Scotland by March 2021. What does the sector need to do to ensure it can meet that goal?
Meeting the affordable housing supply target and increasing housing supply is not purely about money. There are a number of factors that will contribute to the successful delivery of 50,000 affordable homes.
A continued focus on collaboration is needed to ensure all stakeholders are engaged and driving in the same direction, supported by a more effective planning process giving access to land which is ready to build on. It is also vitally important that early engagement with the supply chain takes place to ensure there is capacity and capability built in to accommodate the requirements.
Other factors such as the sector embracing innovation - whether that be the use of non-traditional build solutions such as offsite construction or innovation in procurement with the introduction of Dynamic Purchasing Systems (DPS) - will be key to delivering those homes.
What role do you think procurement plays in improving the rate of new housing supply?
Good procurement practice can be the key to delivering more than just 50,000 houses. The government is allocating £3bn to support this programme but it is vital this investment delivers communities and homes, not just housing units.
Procurement is still often seen to be a barrier to building homes and the inclusion of registered social landlords within the Public Contracts Regulations (PCR) 2015 has been seen by many as another barrier to delivering the 50,000 homes. You can understand that because the PCR can be cumbersome, but a lot of social landlords have got strong professional procurement organisations, particularly the larger ones.
There is also a lot of support around from framework providers like SPA (Scottish Procurement Alliance), as well as organisations such as the Scottish Federation of Housing Associations (SFHA). After discussions with their membership, the SFHA responded to the increased challenge faced by the sector by introducing a free-to-access Procurement Advisory Service.
This has proved to be a very valuable resource, offering advice on all aspects of the new regulations and assisting the sector to understand the requirements and implications of the new regulations.
Is the sector too target-driven when it comes to delivery? Should factors, such as creating sustainable communities, come under greater consideration?
There is a balance to be had between focusing purely on the target of 50,000 houses and delivering the extras that will ensure the sector not only delivers homes, but sustainable communities.
With the Scottish Government committing £3bn there has to be a measure to ensure this is spent wisely and delivers more than just housing units.
I spend a lot of my time with developing authorities and see on a regular basis how, while the target is acknowledged, it is not seen as an all-encompassing burden. The opposite actually: it is seen as a chance to make a real difference and open up opportunities for those who live in the communities.
There is a real focus on adding value by achieving these targets and delivering sustainable communities is high on the agenda for all of the developing authorities engaged with SPA.
What can landlords do to demonstrate social value through procurement?
The starting point is engaging with suppliers. It’s important to make sure that the local supplier community understands what social landlords are trying to achieve in delivering best value, including social outcomes. For larger construction projects, engagement with the main contractors is required to make sure they understand the local impact and can engage with local supply chains.
Second, social value has to be articulated as an evaluation criteria in the tender documents. Tenderers need to be clear on what basis they are being appointed and what is expected of them in terms of contract delivery, not only on price and quality but also on social value.
Third, monitoring performance management systems to make sure social value has been delivered is critical.
In addition to all of this, we should be making sure that we’ve got a common language, so when we’re talking about the different aspects of social value we’re all using the same terms.
HACT has done some great work on this with its social value and procurement toolkit. One of its aims is to create a ‘common language’ around social value that is easily understood by all of those involved in public sector procurement.
Are you aware of any good practice examples of housing providers delivering on social value?
Social value covers a wide range of factors and that is one of its benefits. The important thing is that each individual commissioning body can define specifically what social value means to them. This will differ widely between organisations both in terms of organisational priorities and community priorities.
East Ayrshire Council utilised its share of SPA surplus to invest in a project which delivered a variety of clean, green and vibrant initiatives, including garden tidying works such as hedge trimming, grass cutting etc. It also raised awareness and encouraged pride in the local area, which led to supporting local initiatives such as flower planters, bench seating and environmental improvements.
How can frameworks enable public sector landlords to deliver social value?
Framework providers like SPA engage with suppliers and appoint them on their capability to deliver social value. So any social landlord using a framework knows it will allow them to achieve their social outcomes through the call-off contract.
Many framework providers facilitate the delivery of social value in two ways - first, by making sure that social value is embedded in the framework so social landlords using the framework can make the desired social impact through the execution of the call-off contract. Also, as not-for-profit organisations, some of us redirect surpluses into a ‘social investment fund’ for access by social landlords for funding community benefit projects.
What does the future hold for procurement in Scotland?
With Scottish contracting authorities facing the challenge of decreasing budgets, stretched resources, uncertainty around Brexit and a potential second independence referendum, it would be understandable if the new regulations were seen as unwelcome red tape.
But the reality is that Scotland is ahead of many parts of the UK in reforming its procurement, by embedding good practice, fairness and collaboration into its ways of working. There is a commitment to use the regulations to drive efficiencies through collaborative activities, support local businesses through engagement with the local supply chain and deliver benefits to the local communities.
Biography
Clive Feeney is head of operations at SPA. For the past six years he has supported the Scottish public sector in achieving efficiencies through their procurement of building services via the use of pre-tendered frameworks.
