Call to outsource social housing management

Published by 24publishing for 24dash.com in Housing and also in Communities, Local Government

Opening social housing management to more competition could potentially save £675m, according to a new report.

Research commissioned by the CBI from Oxford Economics – based on the extrapolation of £2bn-worth of cost savings found in 20 discrete public services – identified average savings of 11% when opening services up to the private sector.

Hospital facilities management and social housing management accounted for just over half of the savings identified in the research.

Applying the same principles and calculations across the estimated £278 billion of public services, which the CBI believes could feasibly be fully opened up, would deliver savings of £22.6 billion.

The report found that just 2% of the market value of the UK’s 5.3 million social housing units is open to independent management. Local authorities and registered social landlords spend £4.6bn a year on managing the UK’s social housing, however, the research identified savings of 15% when they are managed by independent providers.

It cited Pinnacle PSG’s contract with Westminster City Council ALMO, CityWest Homes – where it’s managing more than 22,000 social homes – as an example of how the practice was already being done.

The report said: “Given the scale of the spending reductions, the progress made in opening up public service markets in local government services, although already considerable, must go further. It should be just the start of a wider change in how services are delivered that ensures funding is better focused towards achieving the outcomes required.”

Earlier this month, 24dash reported how a Conservative-run council is planning to outsource a whole spread of public services – including housing and planning – in a bid to deliver better value for money.

Herefordshire Council is initially looking to reprocure services currently provided through its partnership with outsourcer Amey – a 10-year joint venture covering highways maintenance, street cleaning and building maintenance – which expires in 2013.