Outsourcing Model to Fund New Build

A new repairs outsourcing model has been developed that could increase the borrowing power of councils and finance new house building projects.  If successfully implemented, it could create hundreds of millions of pounds of additional ‘headroom’ underneath councils’ government-imposed borrowing caps following reform of the housing revenue account system. The new model works by delivering a minimum 10 per cent saving on major works by using private sector partners.  The savings would be used to make regular payments to a private sector company, which it could use to borrow against and return the capital funding for investment.  According to proposals from housing consultancy Is4, councils faced with limited borrowing capacity as a result of self-financing rules would be able to fund new house building programmes by outsourcing major repairs work.  Read more on Inside Housing.

Contractor Says Billions Could Be Saved By Switching Outsourcing

A contractor claims savings of up to £2.9 billion could be made by housing associations, ALMOS and councils if changes were made to the outsourcing of housing maintenance and management. In a report, Tougher Times, Smarter Ways, Morrison has called on housing providers to switch to a ‘transformational’ model of outsourcing which, it claims, could see savings rise to 20 – 35 per cent compared with working in-house. The company says that currently providers with a traditional outsourcing contract have savings of 10 - 15 per cent and those with collaborative outsourcing contracts make savings of 15 – 25 per cent. According to Morrison ‘traditional’ outsourcing involves the provider undertaking activities prescribed by the client with costing done per activity and with a contract lasting three to five years. Download a copy of the report from the Inside Housing website.