Housing associations could save £1.5bn on their annual £5bn repairs and maintenance costs if they join a purchasing club launched on Wednesday.
Procurement for Housing aims to use the combined purchasing power of the social housing sector to save money that can be reinvested in building more homes and improving services.

Deals will be negotiated with suppliers on behalf of the group members by an advisory group and several expert product groups.

The membership of these groups will be elected from club members at an annual meeting.

Ross Fraser, chief executive of benchmarking consultant HouseMark, will oversee Procurement for Housing.

He said: "It will not just be for associations but for councils and arm's-length management organisations too. The potential savings are dramatic.

"Housing managers are finding their costs increasing more than their income. Anyone who doesn't participate in this is throwing their money away."

Fraser said the areas where most money could be saved were utilities, building or refurbishment materials such as boilers and commodity goods and services.

In the last area, he said associations could save £40m on the £300m they spend each year.

The scheme will be run by joint purchasing expert Collective Enterprises and membership will cost £50-950 a year. Its launch follows a two-year pilot run by HouseMark involving 35 RSLs.

In the pilot, Harvest Housing Group saved 26% on energy costs and Home Group saved 15% on telecommunications.

The idea has already attracted the attention of Sir Peter Gershon, director of the Office of Government Commerce, who is running an inquiry into efficiency savings in the public sector.

Leaked initial findings of his review in February showed he was keen to cut procurement costs and Gershon has asked Fraser to present his ideas to him on Wednesday.