Broken Business Models Won’t Fix Social Housing’s Problems

The financial troubles of some major building contractors have laid bare some problems in social housing repair and maintenance contracting. The risks had been there all along, but nobody wanted to see them. Once, it may have been possible to convince yourself that taking on large volume contracts with low margins was a sustainable option.

Social housing providers could feel secure in the illusion that contracting with a large provider would minimise their risk and was the best route to drive down costs. The unsustainable nature of some repair and maintenance contracts has been exposed.

Short-Term Cost or Long-Term Efficiency?

Another consequence of high volume, low margin contracting is short-termism. It’s hard to plan or invest for the longer term on a 2% margin. You are pretty much hand-to-mouth. Short-term cost savings inevitably come at the expense of long-term efficiency.

Some local authorities and housing associations are now considering bringing repair and maintenance services in-house in the belief that it will cut costs and improve customer service. This may be swinging the pendulum too far the other way. There were reasons why services were outsourced in the first place and they weren’t all to do with saving money.

Quality, Investment and Sustainability

A repair and maintenance contractor that has a wealth of experience with several clients has a broader perspective and more insights into possible efficiencies and improvements. Investments in technology, processes and training can be shared so that all clients benefit.

Our approach to repair and maintenance contracts involves investing locally for the long-term. There is a measured approach to the planning of maintenance work that considers asset lifetime costs and long-term value for money. In this way, it’s possible to generate cost savings and improve the service to residents, without affecting quality or risking financial instability.

Relationships with local communities, suppliers and businesses are also vitally important. Taking in the broader picture in this way generates economic value in the areas we work in. This, we believe, represents a business model for repair and maintenance that makes sense for everyone: social landlords, communities and contractors.

Senior Account Manager, Osborne Property Services.