Technical Journalist, Bruce Meechan looks at how housing associations are coping with financial constraints and the volatile market conditions affecting major contractors.
The business failures in quick succession of Rok and Connaught sent shock waves through the local authority and the wider affordable housing sectors, as councils and housing associations across the country suddenly saw their contracts for the provision of maintenance work, as well as other services, being ‘auctioned off’ by official receivers.
Amidst the financial crisis, seemingly sound companies were unable to support their debt – a situation exacerbated by the practice of ‘buying work’ during hard times – leaving both customers and investors to count the cost.
Like the banks that began the chain reaction with “The Great Panic”, the two huge building contractors and service providers were viewed by many as ‘too big to fail’; when in fact the even larger Taylor Wimpey had only recently been brought back from the brink by a restructuring of its borrowing, coupled with drastic cost cutting.
As a consequence, although the work that these companies undertook for clients across the UK – from fitting new kitchens, to responsive repairs and void maintenance – has not altered in either substance or scale, the way that such services are sourced may have changed for ever. Social landlords are looking for far greater stability and, in many cases, independent control over operations.
Partnership and long term contracts between the public and private sector are not dead, but RSLs are definitely seeking new style relationships with key suppliers; and it is those ready to respond who will be in pole position to win new work.
The new generation of service providers now vying for position are often specialists, able to fill the gaps that necessarily exist in the RSLs own structure, which would be both difficult and expensive to cover as part of a DLO type arrangement. They must, though, be capable of complying with landlords’ strict standards on health and safety, security, financial rigour, and other accreditations.
These views are echoed by Rob Mouser, the Managing Director of Plastic Surgeon, a repair specialist winning an increasing share of work from public sector housing providers, as the building industry adjusts to changing forces.
“What we are seeing, underlying the trend for social housing landlords to take work in-house, is a desire for greater self determination, as well as the control of costs in the face of tightened public sector budgets following the Government’s spending review.
“Plastic Surgeon was already well used to working with the affordable housing sector, both in the latter stages of new-build projects – normally involving one of the national housebuilders – and also maintenance work. Generally on development sites the housing association or other RSL has its own Clerk of Works involved in checking properties in the period up to handover: and they set very high standards reflecting the landlord’s long term responsibility for its stock, as well as their commitment to tenant care.
“Now, however, we work far more closely with councils and housing associations on their existing stock. This is broken down into three distinct areas: helping to turn around void properties which normally involves very tight timetables as they try to get them re-let.
“Then there is involvement with planned maintenance programmes, where contractors updating kitchens and bathrooms, or installing new doors and windows, can have to deal with accidental damage done by their own trades-people. It is far more cost effective for them to have us carry out the snagging than bring back sub-contractors or rely on decorators. And finally we are being asked to carry out cosmetic repairs inside and externally to occupied properties as part of the responsive maintenance workload. All of these we are able to provide using our national network of highly trained finishers.”
Plastic Surgeon has impressed many in the sector with its speed of response and strictly managed procedures – such as providing tenants with a photo ID and contact number for the finisher who will carry out the repair, when sending the appointment confirmation – while also helping to reduce maintenance costs. It is very possible the finishing specialist will be seen as the role model for other companies wanting to partner with housing providers as the market continues to mature.
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