Commercialisation in Social Housing. Andrew Carlin Commercial Director

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Ashley Charles Sharp
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1 Commercialisation in Social Housing Andrew Carlin Commercial Director

2 What PfH members are telling us. 1/3 Only one third feel they are sufficiently resourced 14% Have total spend visibility. Nearly one quarter believe their spend visibility is poor 70% Feel that procurement s importance is increasing in the sector 42% Have no CIPS qualified team members 57% Of large and 41% of small RSL s don t carry out benchmarking despite thinking it s important 80% Don t think their procurement team will increase in size over the next 3 years

3 Why consider Commercialisation? Drivers? Perception of the sector? Welfare Reform Certainty of Income? Increased operating costs? Support and grow Social investment? Benefits? Understand Cost Drive better value Improve business intelligence?

4 Balancing Social & Commercial? V More Commercial Focus Protect and Grow Social Investment

5 What does the future hold for procurement? Future Challenges for Procurement EU Procurement Directives Effectiveness of current procurement practice Compliance v Value for Money Are we delivering real value? Is this the best we can do? Consequences and impacts of different approaches to procurement Need identification through to Contract Management What role should procurement play in responding to the challenging operating environment?

6 Lessons from the sector and beyond Sanctuary Category Management Spend Analysis Process Improvement Contract Management More for less Notting Hill Spend Analysis Finance driving Procurement Senior Management engagement VfM and greater Social Return

7 Commercialisation in the Social Housing sector Dr Jo Meehan University of Liverpool Management School

8 The research Extension of previous work Cartrefi Conwy Knowledge Transfer Partnership with BMU PfH Procurement and commercialisation National survey with PfH and Affinity Sutton Procurement and commercialisation maturity Focus groups with procurement staff from over 30 social housing organisations Manchester London Scotland More planned for 2013 including non-procurement

9 Debates emerging from the focus groups EU regulations Procurement (im)maturity Social Value Commercialisation

10 Level of involvement Procurement maturity in social housing Barriers: spend analysis market intelligence status resource reactive structure Barriers: contract mgt savings tracker audit / compliance externalisation of expertise no supplier evaluation Need Identification Sourcing process Tendering Contract award Post contract

11 Social Value Government policy driver for social value Reduce costs and remove the need for government social investment Solve complex problems with entrenched social challenges Move delivery of services to the private sector Suppliers can, and do, use SV opportunistically Sharing/displaced apprenticeships Hiding overheads/costs Adds additional supplier cost very rarely get this for free Free things often PR-driven Not always embedding sustainable, positive impact in communities Impact is difficult to evidence and not managed post-contract Short versus long term impacts/social value (e.g. training or jobs) Not always appropriate to add to a tender Defined by who? Who is closer to a community to deliver social value? Who do tenants want to deliver social value?

12 Do we need to be more commercial? YES!

13 Commercialisation research findings External supplier positioning is poor Reliance on contractors data Lack of market intelligence Price lists and social housing price lists High level of knowledge sharing and benchmarking.but predominantly only with others in the sector Same suppliers across the sector lacks diversity Requirement for suppliers to have social housing experience Provides legitimacy but assumes someone else has tested them External pressures on costs Not yet fully impacting procurement Only focused on revenue streams (tenancy decisions) not costs Cultural shift needed needs to be CEO led Huge opportunity to be innovative and sector leader Residents involvement initial reaction is price

14 The future Alice: Would you tell me, please, which way I ought to go from here? The Cheshire Cat: That depends a good deal on where you want to get to. Alice: I don't much care where. The Cheshire Cat: Then it doesn't much matter which way you go. It does matter which way we go The impact of not managing costs is significant in social housing Values first, strategies follow What we stand for (which doesn t change) How we do things (which should never stop changing

Value for Money Annual Self-Assessment 2016/17. Value at the Heart of the First Ark Group 1

Value for Money Annual Self-Assessment 2016/17 Value at the Heart of the First Ark Group 1 Contents 1. Introduction 2. What value for money means to us 3. What value we are delivering 4. Optimising the