Working for North East communities

As a procurement consortium for social housing formed by social landlords, NEP is dedicated to getting the best deal it can for its members – and for their tenants. “Collaboration is not rocket science; you just need to make that leap of faith,” says Ian Brimer, talking to Northern Housing about the organisation he leads

“NEP is specialised within the affordable housing market. We’re a procurement consortium set up by social landlords to cater for social landlords here in the North East of England,” says NEP’s chief executive Ian Brimer. “We’re very much about delivering sustainable efficiencies and utilise these to help members to deliver their social objectives.”

Governance is conducted by the members themselves, with senior figures – finance, asset, procurement directors and chief executives – comprising NEP’s board. These are, of course, the people who know the challenges and the requirements of modern affordable housing, so sitting at the very heart of the organisation they ensure that NEP is steeped in this knowledge.

NEP was established in 2007 with 10 founding members, today expanded to 12, and between them the members manage more than 100,000 homes across the North East. In essence, the organisation combines the members’ buying power and pools their resources in terms of knowledge, skills and experience. In addition it enables the member organisations to simplify their procurement processes by being involved with a dedicated body empowered to act on their behalf. They specify their requirements; NEP does the hard work – delivering back savings in the process.

There’s more to it, of course, than just ‘bulk buying’. The process is far more targeted than that, drawing upon members’ knowledge, as well as NEP’s contacts and experience, to foster good deals – not just the cheapest deals. Value for money is an important theme running through NEP’s operations, as is quality and choice. Tenants, after all, drive service delivery in the modern affordable housing world, and have an increasing role in the specifications of services and products.

“Saving money is a certainty because of our size and what we do, but we are also bringing the knowledge of 12 landlords, and our combined networking, to realise procurement savings,” Brimer said.

“We never buy the cheapest when we complete a sourcing exercise. It’s normally the supplier or contractor that delivers the highest quality with a reasonable cost because at the heart of everything we do are the customers and tenants. We never make decisions purely on cost because the tenants and customers just won’t let us. So, we are driving quality at reduced cost. We have to look at whole life costing in everything we do because our members have to then maintain their housing stock, so we never ever concede on quality.”

There’s strength in operating collectively through NEP for the members, but it’s not just about cost savings. The value for money forged through NEP means that more can be done with available resources but there is another important theme to NEP’s work – and that is promoting and developing the social responsibility agenda.

In the main, this means using its contracts to instil measures that assist the communities where its contractors will be working. A typical outcome is training, employment and apprenticeships, but by no means limited to this. Indeed, in a certain sense, the promotion of measures intended to help its members achieve their social responsibility agenda works both ways – by creating a space for small, local contractors to play a role, as well as stipulating that larger contractors are required to provide added value benefits to the local community.

A third of NEP’s Key Performance Indicators cover these social agenda and NEP has some set rules for its contractors when it comes to contributing benefits for the communities where they’ll be working. There is a flexible approach so that firms can contribute according to their particular circumstance. While the provision of training and local employment is a strong requirement, there are other methods by which contractors can contribute towards the social good – as a current cavity wall insulation programme demonstrates (see Energy efficiency by word and deed below).

To help generate community benefits and pursue the social responsibility agenda, NEP recently appointed Mary Macdonald to the role of employment initiatives manager. As part of her role, Macdonald co-ordinates NEP’s Community Investment Working Group, helping members and contractors to fulfil their social objectives, such as tackling worklessness, generating employment and other related objectives.

“Having spoken to some of the smaller companies we have on the contractor framework, I’ve found that they are keen to get local people into training and development but just don’t know where to start,” Macdonald said. “I am here to facilitate the funding for schemes like this and point them in the right direction.”

She also heads up NEP’s exploration, with its members, of the potential for establishing a social enterprise that will promote the training and employment agenda for local people. It’s early days for this venture as it’s still at the ideas stage but as Brimer said: “It will be based around people from the most difficult to place groups, and though it has yet to be decided, it would probably involve mentors from the companies in the framework.”

Local contractors may often struggle to compete against the bigger national, or even regional contractors, even in their own ‘backyards’ as it were, because of the complexity of the EU Procurement Directive. Perhaps there is a view that such tender processes are not for them, but NEP has taken a great deal of time and effort to ensure that local contractors are included in the frameworks.

To help further develop a level playing field for local contractors to win work – but also be able to sustain the cash flow to carry out the work – NEP’s procurement strategy separates the supply and fit elements into separate procurement streams. This has proved a major benefit to small contractors who would struggle to buy materials competitively in small volumes. Under this more open system, they simply have to compete on labour and quality of work, whilst the materials are procured separately.

Value for money underwrites everything that NEP does on behalf of its members, and on this score it provides a useful forum for members to benchmark their activities for auditing purposes. Based on the purchases undertaken by members, NEP can assess their expenditure and savings on a like-for-like basis and produce an efficiency statement that is lodged with the consortium’s governing body, the National Change Agency. These can then be used during Audit Commission inspections as proof of value for money performance.

“The overall efficiency statement we returned for NEP last year was just over 20 per cent,” Brimer said “This demonstrates to landlords that by procuring through NEP there will be a cost reduction on a like-forlike basis without conceding on quality.”

Savings aren’t just about satisfying auditors of course. More importantly some of these savings are reinvested in services and community benefits. It’s this kind of sound business practice that underwrites social responsibility and community benefit is essentially what NEP is all about. It’s at the service of its members, who are at the service of their tenants.

Energy efficiency by word and deed

Work began on a cavity wall insulation programme last month, after NEP joined forces with TADEA, to bring the benefits of energy efficiency to over 1,600 homes managed by its member landlords. Not only is the programme carrying out the work – but it is also spreading the energy efficiency message.

As a result of the minimum bid criteria of 1,000 properties, the funding was only secured as a result of NEP members working together within the consortium. This activity, the kind not normally carried out under Decent Homes programmes, will be carried out free of charge for residents in homes owned by Fabrick Housing Group, South Tyneside Homes, Housing Hartlepool and Home Group. Four local contractors – Heatpac, Cosyseal, Keeping Newcastle Warm and Dyson Insulations – were appointed to carry out the work, which received £850,000 of Government funding from the Social Housing Energy Saving Programme. The fund was established to help social landlords insulate difficult to treat cavity walls.

TADEA, a not-for-profit sustainable energy service, is co-ordinating the work alongside NEP. The first phase is expected to take eight months to complete. As well as the benefits of energy efficiency, the programme is also being used to fulfil social responsibility requirements to help benefit the community. These include the appointment and support of trainees, the provision of work experience for schools and energy advice workshops.

The latter sees the programme making the most of the fact that tradespeople will be out and about working on people’s homes – meaning they are ideally placed to spread the energy efficiency message. To that end, they will be providing advice, guidance and freephone telephone numbers where residents can gain more information. Workshops are also going to be held on the estates where the work is being carried out, to reach out to a wider
audience the benefits of energy efficiency.

Ian Brimer, NEP’s chief executive said: “The scheme is vitally important for the region as it gives so many families better insulated homes. We had to work very quickly to put the joint bid together, and the fact that more than 1,600 homes in the region will now benefit from this scheme is a testament to good teamwork.”

Bob Kirby, TADEA’s operations manager added: “All of the contractors appointed to carry out the cavity wall insulation measures have reported how excited they are to be part of a scheme to insulate homes that would not normally qualify for insulation work – and they appreciate the fact that all the work has been awarded to local companies that employ a local workforce.”