Nine London RSLs link up to save £50m through bulk-buying

A group of London’s largest housing associations are setting up a bulk-buying scheme that aims to slash procurement costs by £50m.

The registered social landlords are bidding for ODPM cash to launch a local housing procurement forum that will save £10m a year by 2009. The government is providing start-up funding for 40 forums, which are designed to save social landlords £400m a year by 2009.

The nine RSLs behind the scheme, dubbed Buy 4 London, are: Circle 33 Housing Group, East Thames, Genesis Housing Group, Horizon Housing Group, London & Quadrant Housing Trust, Metropolitan Housing Trust, Network Housing Group, Paddington Churches Housing Association and Southern Housing Group.

It is anticipated that Buy 4 London, which aims to begin purchasing in April 2006, could produce savings of up to 30% on kitchen units, windows, boilers and bathrooms. The nine RSLs currently spend a total of £32m a year procuring such items.

The costs of the scheme have yet to be confirmed, but sources said Buy 4 London would cost about £500,000 to set up. The RSLs will provide some of the start-up cash and is asking the ODPM for the rest.

Ross McCartney, maintenance strategy manager at London & Quadrant, said the associations were exploring what offers would be available to Buy 4 London.

He said: “We’re looking to see what benefits there are and see what deals we can get.”

The project is based on the Merseyside procurement club Fusion 21. This was established in 2002 by nine social landlords with the aim of making savings by creating economies of scale and building long-term partnerships with contractors.

Buy 4 London also intends to train tenants as tradespeople.

Kevin Allaway, group maintenance manager at Southern Housing Group, said: “We’re looking to replicate the Fusion 21 model. We want to replicate the training unit as we want to make sure we have the appropriate tradesmen at the appropriate time. We’d like to provide opportunities for training, for members of our communities.”