The benefits of local consortia

Sponsored by Collaboration Consortia

Having access to regional as well as national suppliers can hugely benefit social housing maintenance and development, argue four leaders from organisations providing regional procurement solutions

 

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“Local contractors typically have local supply chains established and local labours,” Ms Dermody-Simons says (picture: Getty)
“Local contractors typically have local supply chains established and local labours,” Ms Dermody-Simons says (picture: Getty)
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“Planned works, particularly for interior works, are just starting again but some organisations are delaying until January," says Neil Biddiscombe, procurement manager @Advantage_SW (sponsored) #UKhousing

“@EEMLtd has seen a 30% increase in PPE sales through our framework since April, which is to be expected in the current climate," says Rebecca Dermody-Simmons, its interim CEO (sponsored) #UKhousing

“Collaboration is crucial – it means more buying power. Social housing providers can save time and money by using procurement frameworks,” says Marc Baines @SEConsortium (sponsored) #UKhousing

IN ASSOCIATION WITH COLLABORATION CONSORTIA

What are the urgent pressures facing social housing providers in your region, and what challenges are they facing more generally?

Neil Biddiscombe, procurement manager, Advantage South West: COVID-19 has had an impact on planned, responsive and cyclical repairs and maintenance programmes – as it has across the country. Social housing providers were able to keep the essential compliance services going, but now there is a catch-up programme for repairs. Planned works, particularly interior works, are just starting again but some organisations are delaying until January. Delivery capacity may well be an issue. We have a smaller contractor base than other areas of the country and capacity is often an issue – not just companies, but the operatives to do the work. In the South West we have really low stock density, we cover a big area and particularly during the summer months there can be serious issues with travel delays. There’s a real concern about a reducing workforce as operatives age, relating to work in existing properties as well as for new build.

Rebecca Dermody-Simmons, interim chief executive, Efficiency East Midlands: Volume, demographics and varied property archetype are probably the three key things that set London and the South East apart from other areas. Housing associations and local authorities have a range of home types to keep well maintained and safe, and London in particular can be a logistical nightmare. We have seen a real shift towards compliancy and external works during the main lockdown period and this trend has continued with the reopening of businesses. More than 60% of enquiries and new contracts processed since April have been for procurement frameworks in materials, compliance or external works. We’ve seen a 30% increase in PPE sales through our framework since April, which is to be expected in the current climate. A large number of members have said that traditional planned works such as new kitchens and bathrooms, along with non-essential works, are largely on hold until the next financial year while they regroup and assess the financial impact of this year.

Marc Baines, managing director, South East Consortium: We’ve seen a steep rise in enquiries for large refurbishment projects, fire safety and consultancy over the past 12 months. It’s clear that fire safety requires a significant investment, and collaboration will be key in London. Our consultancy framework has been one of our most used offers. It covers multiple aspects of the built and developing environment – it’s an excellent way of securing a talented partner to assist customers with building better, safer and faster.

Cliff Woodward, chief executive, Westworks: We too have seen a post-COVID catch-up on routine maintenance and project work, fire risk assessment, remedial work, and mechanical and engineering works.


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What are the advantages of procuring from local suppliers and partners when developing new projects or addressing urgent need?

NB: The further into the South West you get, the fewer national contractors there are. I can understand that: volumes are low so spend is low, distances are high and operative availability can be a challenge. That’s why a local consortium works so well for this region – we can prioritise the issues caused by our geography and make sure that our frameworks cover these.

RDS: Most of our frameworks are awarded in geographical lots with the addition of a national coverage lot. The main objective for including the national lot is to try and keep the more localised, geographical lots free for smaller, local companies rather than big national providers. On our property improvement framework we also included value bandings as we were finding that smaller, local contractors are much better placed and more competitive for lower-value contracts. Our previous framework was made up of largely national contractors who are, by their own admission, not as competitive when undertaking lower-value, one-off projects. We have also developed two new dynamic purchasing systems [DPSs] specifically aimed at attracting smaller, local contractors. One is our labour services DPS, which supports our members with short-term labour to cover staff shortages or busy seasonal periods. We find that local contractors typically already have local supply chains established and local labour, meaning they can mobilise quicker to suit the requirements of a contract.

CW: Having an ‘open door’ for new contractors to be assessed and added to a DPS in fairly short order enables members to put forward known and appropriate contractors or suppliers to Westworks for evaluation. We have found that the process has engendered a real sense of open and honest application for projects that would be unviable for larger firms to deliver and more suited to SMEs [small and medium-sized enterprises]. In fact we have often had a larger firm’s reason for opting out of a project be along the lines of: “This would be uneconomical for us to deliver and more suited to an SME,” because contractors know we have providers of all sizes. Conversely SMEs will state that some projects are too large and opt out. We’ve been able to ensure that there is a balanced pool of providers for all sizes and locations of projects.

The benefits of local consortia 2

Neil Biddiscombe, procurement manager at Advantage South West, has worked for the business since 2008. He sees its role as helping to improve the lives of social housing residents – helping free up resources to provide better, safer homes and supporting sector collaboration to find solutions that cover a wide range of issues, including new build, domestic abuse and high-cost loans.

The benefits of local consortia 3

Rebecca Dermody-Simmons, interim chief executive at Efficiency East Midlands, has more than 20 years of procurement experience in the sector. She has been involved with Efficiency East Midlands since its inception in 2010, when it had five members. It now has 200.

The benefits of local consortia 4

Marc Baines, managing director at South East Consortium (SEC), joined SEC as managing director in September 2015 and has worked in the sector since 2008. He provides strategic and operational leadership and management of all functions of the business.

Cliff Woodward, chief executive at Westworks, joined the business in 2011. With a background in offsite manufacturing and construction and maintenance contracting in the UK, Scandinavia and Europe, Mr Woodward is passionate about bringing the UK housing sector into the 21st century. He has experience in public sector procurement and contracting, as well as in commercial contracting.

What are the best examples you’ve seen of successful, localised procurement for social housing in your area? How have you supported such success?

RDS: We have seen many examples of successful localised procurement over the years, often involving local contractors being awarded works across several regional members. For instance, we currently have a contractor installing kitchens and bathrooms across multiple members in a region. Being able to secure similar works in one area brings benefits to the contractor because it means continuity of work and sharing resources across contracts more easily. Meanwhile, members benefit from economies of scale as the contractor uses the same suppliers and distributors for all the contracts. Where we can, Efficiency East Midlands supports contractors to procedure materials through our frameworks. In this way, they can use a local supplier, benefit from our buying power, and our members ultimately benefit. We had another contractor who applied for one of our frameworks to enable them to expand their business in the East Midlands. Their strategy has enabled them to secure 15 contracts within the East Midlands and allowed them to employ local labour, strengthen their service delivery and offer social value opportunities, which has benefitted all involved.

CW: We had a large southern housing association that was tendering its cyclical decorations contract. They were considering a single-supplier approach, but were encouraged to move to a more localised model. This enabled smaller companies to be able to make effective bids for the works. A small decorations company won a localised lot and delivered a not insignificant tranche of works. This in turn helped the SME grow, and
enabled it to bid for similar works in their ‘patch’ and develop their business. This has now been replicated across all workstreams and areas, and Westworks actively supports members to consider local delivery. This strategy is not without its own challenges. Aside from getting SMEs to be compliant with requirements, members’ contract management often requires some fine tuning. That’s why Westworks delivers training in all aspects of contract management free of charge for its members.

In numbers

60%

Proportion of enquiries and new contracts processed since April that have been for procurement frameworks in materials, compliance or external works at Efficiency East Midlands

150

High-end estimate of tenders released per year at SEC

MB: Our region requires a diverse mix of contractors: there is a need for both large and small service providers to support a variety of housing associations and local authorities. It is not one-size-fits-all in the area we operate in. Choice is key. So we’re fortunate at SEC that our framework service providers are generally engaged and supportive – it means we can run a tight ship. So, we generally know the sorts of regional considerations on our service providers’ minds. That, coupled with our track record of releasing 100 to 150 tenders a year, means we also have a good idea of contractor capability and customer feedback. We hold our own annual conference as well as running framework engagement sessions – it gives future framework applicants a chance to understand our organisation and its culture. We also attend events across the South East to support contractors who may be considering a framework tender. Ultimately it all helps us to assist our customers with making informed decisions. We have multiple examples of assisting customers with separate consultancy and contractor awards – making sure they work together. For example, we’ve been able to run fire risk assessments, turn the assessment actions into a specification, and then get the project work done. Multiple frameworks with good suppliers working well together saves time and money. Collaboration is crucial because it means more buying power. Ultimately, social housing providers can save themselves time and money by using procurement frameworks.

NB: In the early days of Advantage South West, our relationship with Frame Homes – a timber frame manufacturer in Cornwall – helped that business grow considerably. There are a few thousand homes that have been built for our members using Frame Homes. Our primary mode of operation is to drive value in the supply chain for large-value components, making these products available to contractors. This means that local businesses are able to access products at prices that they wouldn’t get on their own. This levels the playing field with the national companies and means that South West contractors are better able to compete for work. Meanwhile our members benefit from the good service that local businesses usually provide at really good prices. This is supplemented by frameworks and DPSs for services and works that attract companies in the South West. We know this region – both the clients and the contractors – and our work is about attracting the companies that will offer the best value.