Efficiency: the moment has come

This issue of Housing Today focuses on what the sector can do to meet this target.

Many housing organisations are already making great strides to reduce costs and cut waste, as we report on pages 22-27.

They chose to make the savings off their own backs, but now the Treasury has removed the option for others not to do likewise.

It could be argued that all registered social landlords and housing departments should, as a matter of course, provide the most efficient service they can. Whether or not each of them has done so in the past is less important, but the demand for future efficiency savings is impossible for housing providers to resist.

By tethering a £20bn investment to the condition of a £1.5bn cost reduction, the Treasury is encouraging evaluation of services provided and relationships with suppliers.

This is good news. Greater efficiency means better and quicker services for tenants and, as our examples from Southern Housing Group and Derby Homes demonstrate, satisfaction for staff, too.

The Treasury’s approach, set out in July’s review, not only formalised what individual housing organisations have been championing but also provided a context for the savings that underpin existing moves to rationalise procurement services.

As we report on page 7, the establishment of 40 procurement bodies on the model of Fusion 21 – another of our featured efficiency experts – aims to save £400m a year from 2009. This equals 7.5% of current total purchasing spend.

Using similar economies of scale, the partner pilot scheme has already saved RSLs more than £10m from bulk-buying construction services.

Further, landlords whose income has been reduced by rent restructuring have been forced to make up the shortfall through better use of resources and staff efficiency.

The initiative the sector has shown puts it in a favourable light compared with the NHS, as Niall Dickson describes on page 18. The health service provides a good illustration of how difficult it can be to achieve and indeed measure efficiencies.

That the ODPM is drawing up guidelines to measure savings (page 21) may give weight to Dickson’s view that efficiency means whatever the government wants it to mean.

Like all measurement of public services (schools, hospitals or even trains), the methodology will be criticised in some quarters. But however efficiency is gauged externally, there is now no reason for any social housing provider not to draw up a strategy to make itself a better-oiled machine.Last month Gordon

Brown set social housing providers a mighty challenge: £1.5bn of savings, to be made over the next three years through greater efficiency.

This issue of Housing Today focuses on what the sector can do to meet this target.

Greater efficiency means better services for tenants and satisfaction for staff, too

Many housing organisations are already making great strides to reduce costs and cut waste, as we report on pages 22-27.

They chose to make the savings off their own backs, but now the Treasury has removed the option for others not to do likewise.

It could be argued that all registered social landlords and housing departments should, as a matter of course, provide the most efficient service they can. Whether or not each of them has done so in the past is less important, but the demand for future efficiency savings is impossible for housing providers to resist.

By tethering a £20bn investment to the condition of a £1.5bn cost reduction, the Treasury is encouraging evaluation of services provided and relationships with suppliers.

This is good news. Greater efficiency means better and quicker services for tenants and, as our examples from Southern Housing Group and Derby Homes demonstrate, satisfaction for staff, too.

The Treasury’s approach, set out in July’s review, not only formalised what individual housing organisations have been championing but also provided a context for the savings that underpin existing moves to rationalise procurement services.

As we report on page 7, the establishment of 40 procurement bodies on the model of Fusion 21

– another of our featured efficiency experts – aims to save £400m a year from 2009. This equals 7.5% of current total purchasing spend.

Using similar economies of scale, the partner pilot scheme has already saved RSLs more than £10m from bulk-buying construction services.

Further, landlords whose income has been reduced by rent restructuring have been forced to make up the shortfall through better use of resources and staff efficiency.

The initiative the sector has shown puts it in a favourable light compared with the NHS, as Niall Dickson describes on page 18. The health service provides a good illustration of how difficult it can be to achieve and indeed measure efficiencies.

That the ODPM is drawing up guidelines to measure savings (page 21) may give weight to Dickson’s view that efficiency means whatever the government wants it to mean.

Like all measurement of public services (schools, hospitals or even trains), the methodology will be criticised in some quarters. But however efficiency is gauged externally, there is now no reason for any social housing provider not to draw up a strategy to make itself a better-oiled machine.