Achieving significant efficiency savings through the procurement process
Gary Stanfield, Framework Manager for Planned Maintenance, explains how significant savings can be made through the procurement process.
Operating in increasingly challenging climates, social landlords remain focused on demonstrating value for money – driving organisational cost and efficiency savings, whilst ensuring the delivery of good quality products and services.
Planned maintenance is responsible for a large proportion of housing association expenditure, and represents an area where significant savings can be made – especially when services are obtained via a procurement framework.
At Fusion21, we deliver a wide range of national procurement services and frameworks to over 180 public sector members – including social landlords.
In 2014-2015 Fusion21 secured £13,243,226 in efficiency savings for members.These efficiencies are secured as a result of our ability to generate savings in terms of cost, time and resource – in addition to leveraging spend through greater economies of scale and increased buying power.
With an extensive offer, Fusion21 runs a national planned maintenance framework – in addition to frameworks available for roofing; whole house; and external painting and repair works.
The framework is broken down into an installation and supply element – covering areas of works such as kitchen and bathroom replacements and windows and doors installations, to the supply of kitchen units; flooring; electric showers and smart heating systems.
The Riverside Group: cost efficiency savings
The Riverside Group is a Fusion21 member benefiting from significant cost efficiency savings, as a result of procuring through our planned maintenance frameworks.
After accessing Fusion21’s External Painting and Repairs Framework, the social landlord awarded an £11 million contract to carry out its cyclical maintenance works, over a five-year period.
This national procurement exercise resulted in the contracts being allocated to three contractors on a regional basis, covering the areas of: Merseyside; Riverside Pennine, North East and Bransholme; South Central (including Midlands and the South East); Carlisle, and Riverside Irvine (Scotland).
The contract is set to achieve 16% in cost efficiencies, equating to savings of £2 million, and the social landlord is also benefiting from having materials provided by preferred supplier, AkzoNobel Global.
AkzoNobel Global is now working with The Riverside Group to deliver social value, including generating training and employment opportunities at a local level.
Commenting on the contract, Ian Gregg, Director of Asset Management at Riverside, has said: "Through collaborative working with Fusion21 and our supply chain partners - and by incorporating best practice and innovation - our customers will not only benefit from a consistent ‘One Riverside’ service, but also from efficiency savings every year and the added social value our partners will be providing both to our local communities and residents."
The Riverside Group gained a further 11% cost efficiency saving, following the delivery of a £700,000 contract to update its North East housing stock.
Completed in November 2015, ahead of schedule, a total of 200 properties were treated to new kitchens, bathrooms, and windows and doors – in addition to asbestos surveys.
Delivering a whole package approach to procurement
Efficiency savings go beyond reducing on costs, and it’s essential that when commissioning services, social landlords are focused on achieving the best value – generating savings that have a long-term impact past the point of commissioning
It is possible to deliver a triple bottom line through procurement activity, and a combination of three factors – social, environmental and financial – should improve the quality of delivery, which in turn will almost always result in an improvement in efficiency.
Accessing any Fusion21 framework generates social value for our members. We work alongside our members to create social outcomes tailored to their own procurement projects – and ensure that an employment opportunity must be created for every £500k of contract value generated.
Social value programmes are vital to supporting the growth, stabilisation and development of communities, and can offer a variety of positive outcomes – from tackling worklessness and social exclusion in disadvantaged areas; to improving digital inclusion; reducing offending; and supporting barriers to learning.
To date Fusion21 has delivered £56 million of social impact and created 2,500 jobs.
Visit www.fusion21.co.uk to read about the additional advantages of using a Fusion21 framework, or call 0845 308 2321 to contact Fusion21.