Public housing construction projects are complex, involving a wide range of client, consultant, supplier and contractor expertise. Public sector contracts for housebuilding and estate regeneration are not let out by central government departments but by individual or partnered local authorities and housing associations using an existing form of contract.
Housing Associations have a degree of discretion in their budgetary management so they can roll funds into the next financial year or they can decide to invest more of their funding. Capital budgets for these development schemes cover several years and involve various funding sources including the client’s own reserves, borrowing and in some cases, affordable housing grants from Homes England.
Local assessments of household formation and economic conditions will also influence the level of resources that fund these programmes.
Given the complexities of this form of procurement, it is our concern that no element of inquiry has been undertaken in drafting the consultation document to assess whether the proposals will be suitable for this sector in order to achieve the goals of individual housing organisations as well as supporting the government’s housing ambitions.
Detail underpinning the procurement legislation is to be provided through mandated guidance in a future National Procurement Policy Statement which will centralise decision taking and potentially work against localised benefits arising from construction projects. Given the complex nature of projects we are calling for the introduction of specific guidance on framework agreements to reflect the actuality of the work commissioned.
Assurance is needed that the future statement will reflect the individual nature of community-based housing. We are not convinced that this approach can achieve true social value and carbon neutral outcomes.
We do support the inclusion of public good in the principles of procurement but if this public good is defined by central government alone this could be unstable when governments change. Priorities are best set at community level and support placemaking locally. There would be benefit in clarifying the difference between public good and social value and how this will be measured if it is to be regulated in the future?
Previous reports from The Housing Forum have recommended that local authorities should have a duty to assemble large scale sites in growth areas – linked to existing towns and cities to reduce infrastructure costs (ABC of Growth)
A second report called for the streamlining of bidding processes for frameworks to reduce costs and more emphasis on competence, track record and innovation in the selection process of bidding. It needs to be carried out to a tighter timescale, with less submission materials and greater reliance on capability statements (Rationalising regulations for growth and innovation).
Read our full consultation response here
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