Housing group buys out contractor to save on costs and tax

Ocean has bought repair and maintenance contractor Gilbert and Goode, which has a turnover of £4m.

An Ocean spokesman said the deal, which was announced on Monday, would lead to “significant” cost and tax savings.

As a result of the purchase, Ocean will no longer have to pay VAT on the modernisation programme being carried out with Gilbert and Goode.

The association owns 3400 homes and maintains a further 4600 homes for other housing associations in the region, including Penwith Housing Association and Devon & Cornwall Housing Association.

The Ocean spokesman said: “A lot of building work is going on in the South-west and, consequently, [labour] costs are going up.”

The spokesman added that the deal would enable Ocean to sell on development skills to other housing associations.

Meanwhile, South Somerset Homes has set up a procurement company that will help it to recover VAT on new-build projects.

South Somerset finance director Caroline Moore said setting up the company, Yarlington Homes, would result in savings of “several hundred thousand pounds” a year.

The association plans to build 2500 homes over 10 years.

As well as providing design and build services for its parent company, Yarlington Homes will also represent South Somerset in the development consortium, Advantage South West, it formed with Devon & Cornwall, Ocean Housing and North Devon Homes.

Geoff Atkinson, chief executive of South Somerset Homes, said: “Yarlington Homes strengthens South Somerset Homes’ ability to influence the supply chain which in turn improves the reliability and deliverability of our programme.”