Open up social housing sector to greater competition, demands CBI
The government should open up the social housing sector to increased competition and greater private sector involvement, the CBI said this week.
In its report Improving homes, improving lives: using competition for better social housing, the business group claimed that £1.5bn could be saved in England alone “by allowing local councils and housing associations to choose the best provider of services, whether they are from the private, voluntary or charity sectors”.
The CBI urged the government to:
- “Create a competitive market for social housing management services, with in-house providers competing against bidders from other sectors to deliver services
- Allow housing management contracts of at least ten years in order to attract investment from providers and enable economies of scale to be achieved
- Eliminate barriers to market entry such as higher VAT rates for private providers
- Use best-practice case studies to show commissioners how to apply TUPE (Transfer of Undertakings Protection of Employment Regulations) correctly to ensure staff can transfer smoothly from the public to private sectors, and
- Design contracts that can track the impact that housing providers make on other parts of the public sector, such as contributing to better education or safer communities, and use an outcomes-based system to reward good results.”
The CBI insisted that its report showed the benefits of private sector involvement, “which include better property maintenance and related social and economic improvements such as higher GCSE pass rates”.
Susan Anderson, CBI Director of Public Services & Skills, said: “At present only one in 80 homes is currently managed by the private sector. The government must create a competitive market for social housing management services and allow longer contracts to encourage more providers to enter the market.
“With no requirement to go to the market to see if another provider can deliver better services for the same or lower cost, many housing managers simply opt for the status quo. Without competition, tenants and taxpayers may be losing out.”
A copy of the CBI report can be downloaded here.
