The tragedy at Grenfell Tower was another stark reminder of the importance of ensuring that procurement of services gives an appropriate weighting to qualitative assessment.
Debbie Larner, of the Chartered Institute of Housing (CIH) believes “we will see a seismic change in how we design, build, maintain, and manage buildings”. It is now an increasingly popular opinion that this change should, and will come in the form of how goods and services are procured.
Given the pressure on housing providers to make savings, this has led to the purchasing of some goods and services being based mostly (or entirely) on price with little to no consideration of quality.
Undoubtedly, all registered providers are to some extent restricted by the pressures associated with the sector. The need to evidence value for money whilst accommodating for the loss of income caused by annual rent cuts makes it harder for Landlords to turn their attention away from price in favour of quality. However, it is important that the point of equilibrium between price and quality is rediscovered in order to ensure that the health and safety of residents is accounted for. Alan Heron, Director of Procurement at Places for People, believes this has already started to happen post Grenfell as it has moved sector focus “away from ticket price and back to value.”
There are a number of claims about the cladding used on the Grenfell Tower which as of yet are unproven and it may be many years until we have a true understanding of what happened and where responsibility should be appropriately apportioned. However, the doubt around what cladding was ordered and which one was actually used is enough to bring questions around the procurement process to the forefront and it has led to many providers reflecting on the “race to the bottom” culture with regards to buying, which is rife in the sector.
As revenues fall and budgets tighten quality has been increasingly compromised in favour of cost. It has been apparent throughout the sector that this trade-off has been taking place for a long time, however, an event as tragic as Grenfell may be able to catalyse a change in the approach to procurement.
Dame Judith Hackitt released an interim report on building safety in December 2017 in which she reviewed current industry practices and identified a cost-cutting culture in need of over-haul. Dame Hackitt points to an environment in which there is no ownership of responsibility. This can undoubtedly filter down to the procurement process in situations where there is no ultimate ownership of the goods and services being purchased.
It is widely agreed that procurement processes should be giving quality much greater consideration, especially in respect of compliance and property services, and that the horrific events at Grenfell are the most recent, and most upsetting reminder as to why. However, there are a number of hurdles to overcome in the form of sector culture, budgetary pressures, and the scarcity of resources which mean this problem is far from a quick fix.
To discuss how Pennington Choices can undertake a review of your procurement processes and help your organisation to rebalance its quality and price assessment of its compliance and property services, please contact Jenny Neville or call our Head Office on 01928 568 842