Housing sector

Inside Housing – Commentary – What should the housing sector think of the government’s post-Brexit procurement strategy?

With respect to commercial delivery and procurement, housing associations must now “review whether they have the right policies and processes in place to manage the commercial delivery milestones identified in the NPPS, where relevant. for their supply portfolio.

This is a very laudable requirement, but one that risks losing most of its housing association readers. It uses central government practice and vocabulary and assumes that procurement procedures are managed on a business case/bridging process, which does not reflect procurement practices in the housing sector.

Also, many of the tools he mentions (project validation reviews, delivery model assessments, cost models) could be used well by the housing sector, but the guidance referred to focuses on Central Government/HM Treasury Green Paper and no attempt has been made to translate them into tools suitable for the wider public sector.

It’s a lost opportunity. If housing associations do not understand the NPPS vocabulary, or recognize the stated processes or practices employed, how can they establish the relevance and application of their day-to-day procurement?

Associations should not, however, be completely dismissed. Those who make it through central government will find a number of other good recommendations: identify and mitigate modern slavery risks in their contracts; recognition of the benefits of collaborative procurement; the need to take a proportionate approach to assessing the economic and financial situation of suppliers; and reviewing risk allocation before going to market via meaningful market engagement, to name a few.

Unless housing associations cry out loud and clear, providing central government with examples of their current procurement practices and “demanding” reform, the resulting public procurement bill is unlikely. to anticipate the needs of the housing sector.

Implementation of these policies and practices should make procurement a more effective, efficient and cross-cutting function in the housing sector, which should, in turn, improve value for money outcomes.

Housing associations should also note that they will have to join the rest of the government in releasing a supply pipeline. The pipeline must wait at least 18 months, but “ideally three to five years”.

The government is expected to legislate for this to become mandatory for housing associations with annual expenditure above £200m by April 2022, and for housing associations with annual expenditure above £100m by April 2023.

With respect to skills and capabilities, the NPPS provides that “all contracting authorities should consider their organizational capacity and capacity with respect to procurement skills and resources necessary to optimize resources “.

Where housing associations identify gaps in their skills, capacity and capabilities, they should have a plan for how they will fill them: either through collaboration with other housing associations or the wider public sector , using shared services and central purchasing or by training and recruiting their own teams.

Most interesting is the government’s aim to benchmark the procurement capacity of all contracting authorities against relevant standards and other comparable organisations. This reference requirement will also be brought forward in legislation, with the government indicating that it will apply to associations in the same time frame as the obligation to publish a pipeline.

How will this work? Will the central government choose the relevant comparators and leagues? Will this fall under the purview of the Department of Housing, Communities and Local Government, which is currently seeking senior procurement policy advisers and officers, or the social housing regulator?

Transforming public procurement, the government’s green paper, proposed a procurement oversight unit, but assuming this unit will be managed by the Cabinet Office, a more direct line of sight may be preferred in future.

Overall, this strategy has a lot of merits. It sets out a clear vision of what shopping should and could be in a post-Brexit England.

Nevertheless, read alongside the Green Paper, the NPPS shows a clear “land grab” of central government regulation of public procurement.

Unless housing associations cry out loud and clear, providing central government with examples of their current procurement practices and “demanding” reform, the resulting public procurement bill is unlikely. to anticipate the needs of the housing sector.

This will leave millions (if not billions) of pounds likely to be spent on procurement procedures, tools and delivery structures that don’t quite fit the bill.

Rebecca Rees, Partner, Trowers & Hamlins