Why we need a new approach to building the supply chain for social housing retrofit

Exactly how much money is available is not yet clear – all eyes are on the Budget and the Spending Review. But the expectation is for another £1.2bn or more to be put on the table. There is no doubt that previous waves of funding have been a vital source of support for the sector to retrofit homes in the past four years.

Interestingly though, research by the National Retrofit Hub in its Retrofit Delivery: State of the Nation Review earlier this year revealed that SHDF funding is consistently underspent. SHDF Wave 1 funding was 35 per cent underspent, and Wave 2 looked like it was going a similar way.

One of the big challenges facing social landlords trying to carry out low-carbon retrofit programmes, and likely one of the main reasons why we are therefore seeing this annual underspend, comes down to contractor procurement.

As the hub’s research explains, the shortage of accredited, skilled contractors to carry out retrofit work to the standards required is pervasive, and there is huge volatility in the supply chain, which is also suspicious of the start-stop nature of government initiatives in this area.

We can’t blame trades and small and medium-sized contractors for feeling this way. Too many local firms have seen green campaigns come and go, and they know better than to build a business on a government promise. Most have very well-established businesses already, and they’re happily booked up for months to come, doing what they’ve always done in the way they’ve always done it.

It can feel like there is very little incentive for the current local contractor supply chain to jump through the hoops, expense and paperwork to become PAS 2030 accredited, or to work to PAS 2035 ‘whole house’ standards, both of which are required to access SHDF funding.

So, it seems obvious to me that we need a new approach to building a robust supply chain with the capacity to help local authorities and housing associations achieve their low-carbon retrofit plans. It should also be noted that this applies as much in Scotland and Wales as it does in England.

And this is where I think procurement experts like ours can play a really important part. We have the ability to recruit, educate and support the supply chain of the future.

Let’s not worry about trying to teach the old dogs new tricks. Let’s create an entrepreneurial new market segment instead, full of spin-offs, joint ventures and retrofit-first specialists – tradespeople and contractors who can benefit from a steady flow of retrofit work for decades to come from reliable social landlords that are embedded in their local communities, understand their customers and their housing stock, and know how to go about these programmes with speed and efficiency.

We have set up working groups and conducted extensive engagement to find the right ways to create new collaborations between contractors, providing networking, best-practice advice and signposting to skills providers.

We match social housing buyers with vetted local suppliers. That’s our day job. But now we can also help those suppliers to get the PAS 2030 accreditation they need, teach them how to work effectively with the public sector, and show them there’s a reliable, long-term pipeline of work that’s worth their commitment.

Through dynamic purchasing systems, we can also provide the flexibility for new suppliers to come on board at later stages, and can give registered providers increasing access to firms that can carry out future repairs and maintenance on low-carbon technologies, too.

So, for any social housing provider worrying about how to spend the funding coming your way, speak to your framework provider and procurement partners. Demand a new approach to building capacity and capability in the retrofit supply chain and watch a new market start to grow.

Clive Feeney, chief executive, LHC Procurement Group