Green agenda for social housing

24 May 2007

Peter Davis and Kevin Lavery review developments in the social housing sector affecting service providers at a dinner hosted by Grant Thornton and Barclays on 22 May

Chairman of the Housing Corporation, Peter Dixon, told social housing construction and maintenance companies that the potential for more work into the future delivering affordable sustainable homes and retrofitting Britain’s five million existing homes for a low carbon future. Speaking at a dinner on 22 May hosted by Grant Thornton and Barclays, he also noted that the entire affordable housing sector has to make £1.66bn efficiency savings over the next three years.

Commenting on the imminent political changes, Davis said, “Gordon Brown wants to jump on affordable housing bandwagon. Affordability to buy or rent has become the top topic. Enormous change is going on in social housing driven by efficiency and effectiveness – we can’t afford to waste money. The Government has various initiatives to force housing providers to be more efficient, be innovative and to save money. There are big plans for housing providers to demonstrate their ‘Gershon savings’. This presents opportunities for doing things in a different way and make sure that Housing Associations actually procure what they need more effectively.”

He continued: “There are more than four million affordable rented homes in England, all require maintenance and management, and looked after to a high standard. We have to make sure that services are of good quality.”

He cited as an example of the scale of opportunity in the sector the 170,000 homes managed the consortium, Buy4London, which will be spending £160m on repairs. This, he said, was both an opportunity and a challenge to the social housing sector.

Turning to sustainability, he said it was importance to focus on the existing stock as well as new build. He announced that the Housing Corporation had developed a new standard called EcoHomes XB (XB stands for existing buildings). This will provide a standard for the retrofit of existing buildings so that they can benefit from some the things to be included in ‘Eco’ new homes. He said, “It is fantastic opportunity for business in this sector to transform those homes but also it will help to reduce costs for families who live in these homes and the cost of repairing them in future.”

Kevin Lavery, chief executive of Serco spoke of the potential for the social housing sector in future and the need for both housing associations and service providers to join into larger units to realise efficiencies. He said, “ It is not always an easy market to work in: procurement can be slow and cumbersome, and housing association clients sometimes lack commercial and procurement understanding. However, if you do a good job you have loyal customers, and it is a big and fast growing market.”

On social housing he said: “Social housing is low margin but with lots of repeat work, and there is an opportunity to get the model the model right. There are economies of scale to be had by partnering with private sector organisations, but it is an immature sector in partnering and contracting: we are still learning.

Commenting on changes in social housing sector, he highlighted pressures on Housing Associations to make savings over the short and long term which will mean looking at outsourcing aspects of work currently done in house, such as building maintenance. He noted that Housing Associations are rethinking their role and changing to looking after communities not just tenants. This means they will become an enabling organisation providing services to that tenant community, he said.