The Challenging Procurement Landscape Within Social Housing
Procurement in the housing association sector currently has several challenges. These include a large backlog of work caused by the pandemic, volatile market conditions causing a shortage of labour and materials, high inflation combined with increased borrowing costs; rising energy costs and higher spending on repairs and maintenance which continue to impact on providers’ operating costs. In addition to this, the function will have to adapt to the new Procurement Act which is likely to come into play in late 2023 / early 2024 which will allow for a more commercial approach and negotiation phase to commence.
The rent cap has meant housing associations now have to decide what to spend their limited resources on – so anyone who can help balance savings and efficiencies with service delivery and quality will be pivotal for the success of the organisation.
Even though market conditions are challenging, the procurement function has a real opportunity to bring some fresh ideas to the executive committee. These include:
- Helping to identify wider strategic opportunities for efficiencies and thus shaping corporate direction.
- Be a key contributor in driving the ESG agenda – a 2023 Accenture report on Supply Chain Sustainability outlined that 60% of all carbon emissions globally are derived from supply chain.
- Keeping a keen eye of the supplier market, identifying innovation opportunities, driving value and service improvement, managing risk and diversifying the supply base.
Procurement has gone through a rapid an exciting transformation over the last twenty years. It has evolved from process management and cost savings to a dynamic, business function that plays a pivotal role in organisational growth. However, many organisations are still operating reactively and tactically to the detriment of the organisation and ultimately resident service provision.
While cost savings and service delivery remain key deliverables, procurement leaders are now increasingly responsible for broader commercial decisions, driving strategic change, mitigating risk and leading on the ESG agenda. This widening of the role has broadened the skill set of the procurement professional significantly.
Procurement leaders need to be aligned with the broader corporate objectives to ensure they deliver optimal innovation and value throughout the supply chain. Soft skills have become as important as functional skills, developing procurement professionals into commercially minded business leaders who play a key role in revenue uplift while reducing costs.
Through our networks and research at Berwick Partners, we are experiencing increasing demand for this new breed of procurement leader across the housing association sector.
I work closely with a number of housing associations including Anchor, Aster Group and Bromford Group helping them to upskill their procurement leaders and source new procurement talent.
If you would like to broaden your procurement leaders’ skills or source new procurement talent, please contact me at Richard.firstname.lastname@example.org