Thinking about the future now

Recessions tend to focus the mind on immediate cost-savings at the expense of potential long-term problems, but according to contractor Axis, best value – not straightforward cuts – is the key to surviving to deliver long-term quality of service

Getting the best deal out of a contract today isn’t quite the same as ensuring it remains a good deal for the duration of the contract. Cost-savings and best value are not just immediate concerns, but long term considerations too, but faced by the challenges of recession, there is a quite rational sense of urgency that means tomorrow may be lost in the focus on today.

Losing sight of the further horizon in that way can have implications, according to Axis, which is currently pushing the message that the time to think about the future is today. At the heart of the message is the simple truth that saving costs today, without thought to the implications, may get an organisation through the immediate situation, but at the risk of creating problems further down the line.

The forthcoming new standards set up by the Tenant Services Authority (TSA ) are an example, according to Axis. Many years of work and experience have gone into building the TSA ’s new standards to ensure that social housing delivers value across its whole life. They focus on engaging with and delivering value directly to residents and creating economic and social sustainability within the community as a whole.

This, of course, ties in with many housing providers’ long-term commitments to corporate social responsibility (CSR) and in many cases to significantly lowering their carbon footprint, tying social sustainability into the green agenda.

For many contractors, however, Axis points out that the competition on price is leading to contracts being awarded at levels that mean the winning parties are unlikely to be able to deliver this added value aspect across the whole life of a contract. U nderstandably, the costcutting today in this context, poses a risk to the longer-term delivery of the housing providers’ sustainability and community development aspirations.

“Some of the contract awards that we have seen recently are so focused on providing a winning low cost now that the companies involved are clearly not planning how they will deliver the contract as
it progresses,” said Julie Steventon, Axis’ director of operations for the Midlands region. “The more savvy providers see beyond the low cost figure and look for clear evidence of not only how the programme of works will be delivered but how they will contribute to the TSA standards, exceeding KPIs, delivering continuous improvement and a customer-service focused contract.”

For some, however, the appeal of a maximum saving in the here and- now is proving just too strong, Axis suggests, but many within the housing sector are warning that providers who simply choose the lowest bid are going to find that what seems like a saving today will actually lead to higher cost tomorrow – and more importantly disappointment and disadvantage for residents and their communities.

For the sake of quick and easy cuts, it seems from Axis’ argument that survival-mode is breeding a lack of foresight that risks best value being dropped from the equation. But the organisation believes there remains a real opportunity for organisation to find genuine savings – if they are still thinking about the future. Realising these savings needs the backing of sound commitments to continue to deliver for residents and communities for the whole life of a contract. In the current economic climate, that might be difficult – but not impossible.

“Axis has led the way in developing ideas that drive costs out of our contracts over many years, and have particularly focused on lowering costs in the current downturn,” Steventon added. “At the same time, however, they add significant value to our clients, ensuring that we are cutting costs not corners.

“Most are simple ideas that may seem small in isolation, but by combining these across all our contracts, we have been able to deliver real savings that are passed to our clients, but which also enhance the value that we are able to deliver for the communities we serve, and to back our proposal up by meeting and often exceeding the KPIs that drive the industry.”