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Severn Vale Housing Society nets £400k benefit and achieves a 'value for money culture' with help from Buying Support Agency
Posted 3 October 2013 | 
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Severn Vale Housing Society nets £400k benefit and achieves a 'value for money culture' with help from Buying Support Agency
It was a critical Short Notice Inspection report by the Audit Commission on behalf of the housing regulator in 2010 that started Severn Vale Housing Society (SVHS) on a journey that has resulted in cost savings from improved procurement practices, as well as improvements to cultural and community relationships.
Tim Knight, Finance Director at SVHS explains: "Nobody likes negative feedback, but we took the regulator's findings on board and decided not only to meet the recommendations the inspectors made, but to try and exceed them by developing a roadmap for future improvements. The bigger challenge for us was that unfortunately we didn't have the skills or experience in SVHS to do this alone."
It was Matthew Roper, Managing Director of Buying Support Agency (BSA), who helped SVHS, which has an annual spend of £12m, get on the right path. "When Tim explained that the findings of the Commission's audit pointed at poor value for money, a weak procurement approach, plus a lack of customer involvement, the challenges didn't sound unlike those of other businesses that we have helped" says Matthew.
The first stage was an in-depth audit of SVHS's procurement processes, led by strategic consultant Andrew Newman of the BSA. With input from Tim and his team, Andrew's work laid the foundations of a procurement strategy that included specific tasks to help SVHS develop procurement effectiveness.
With SVHS Board approval a Procurement Improvement Working Group was set up to develop and implement an action plan. Chaired by Andrew and led by Tim, it comprised a broad range of stakeholders including some SVHS managers with budget responsibility and customers of SVHS' services. Together they developed a set of purchasing procedures and development activities to guide all future buying.
Tony Merrill, a leading procurement practitioner with the BSA also joined the group to lead, advise and train key SVHS managers on tendering and contract negotiation.
The results.
SVHS now has evidence of the potential financial improvements available by adopting a 'value for money' culture and treating external expenditure strategically by (i) implementing a procurement strategy with clear procedures and training (ii) reviewing and renegotiating supply contracts and (iii) selectively using BSA Buying Group's supply contracts. In 2012 SVHS netted a £400k benefit, including first-off savings in procurement of cleaning services (£20k), asbestos removal services (£25k), vehicles (£19k), and lift contracts (£40k).
"All of the changes have been about doing things properly and cleverly - I would advise any other Housing Association faced with similar challenges to get expert advice. It has taken 3 years of hard work to get us to where we are now. We are now better informed and have robust procurement practices. People now treat the money that they spend at work as carefully as their own, and actively look for 'value for money'. But we wouldn't have achieved any of this without the expertise of the BSA guys - they worked collaboratively with us and I see them as an essential extension of my team," concludes Tim.
What next?
It's remarkable that the Audit Commission's criticisms led to SVHS' being well under way with its procurement and value for money plans when the Homes and Communities Agency (HCA) took control over housing regulation in April 2012 and introduced a new Value for Money standard. Since the Procurement Improvement Group had worked so well, SVHS widened its remit and created a Value for Money Improvement Group which currently is proving very effective.
Only this month the Society has produced its first VFM Self Assessment with links via its website to activity dashboards for all areas of the business which link costs, income, staff usage, KPIs, and customer/social outcomes to the corporate strategy.
It's going very well, BSA still work closely with SVHS and the 2013 value for money plan also looks set to deliver further improvements for the business, its customers, and the wider community.
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Image supplied showing (left to right): Tim Knight, Finance Director of Severn Vale Housing Society, with Tony Merrill, Procurement Consultant and Matthew Roper, Managing Director of Buying Support Agency.
Notes to editors:
Buying Support Agency (BSA) provides a comprehensive Procurement and Purchasing service to businesses that wish to increase profits, reduce costs, reduce supply risks and ensure budget is used efficiently i.e. receive 'value for money'.
Services provided include: overhead and cost reduction (up to 35% savings via BSA's Buying Group), procurement consultancy and audit, procurement outsourcing and purchasing training.
The BSA Buying Group has partnered with many trade associations (e.g. the Institute of Directors) to offer their members the benefit of its buying power and expertise to reduce costs and supply chain risk on a client specific basis across a range of overheads.
BSA also provides a sustainable procurement advisory service to help organisations 'buy green' - this includes a green procurement audit, sustainable procurement training plus an online shop, greenbuying.co.uk, which sells thousands of eco-friendly business and school supplies.
Buyingsupport.co.uk
For more information on this media release, please contact Samantha Smith on:
08454 567 760 or by email: samanthathemarketingeye.com
by Samantha Smith | 3 October 2013
