The housing minister, Grant Shapps, has launched the tenant cashback scheme which encourages tenants in social housing to carry out their own minor repairs or hire a handyman, pocketing any savings they make. A pilot has commenced at Hastoe housing association and the Home Group and the scheme may be extended across the country after consultation. The idea is that councils and housing associations will save money and tenants will make some cash. Really couldn't be simpler, could it? But will it be cheaper?
If a tenant decides their house needs a repair, chances are they will have to have it verified by an inspector. No saving there then. If they injure themselves while doing the repair they can claim off the landlord. An additional cost.
When the repair is done it may be prudent to have it checked by the landlord to ensure it is up to an acceptable standard. More inspection work. No saving here either.
The tenant might have to get a qualified person to do some jobs. Will that be any cheaper than a procured contractor? If best practice procurement is so efficient, surely a tenant couldn't possibly get a cheaper local tradesperson?
How will landlords be able to plan future repair work if they never get into the properties? They'll have no idea what condition their stock is in. That would require additional visits. More cost.
The main issue seems to be that no one is quite sure what problem the tenant cashback scheme is trying to solve. Could it be that the costs of repairs is growing for a reason? Could it be because of brainless procurement practices – the sort of practices driven by procurement consultancies who wouldn't know value for money if they fell over it?
Procurement consultancies tell their clients that it is best practice to drive down the unit cost of repairs, and this encourages contractors to cheat once they win the contract. It's the only way they can make money. It leads to "job building", where in order to make money contractors seek variations to build up the job costs on contracts they have bought at stupid bid prices.
The problem we should be trying to solve is the cost of doing proper repairs by contractors and direct labour organisations. The real cause is that procurement practices favour the lowest bidder, driving contractors to do work on the cheap or to build up jobs thereby making money on "ghost work". As long as they stick to the schedule of rates and target times, they can do what they like. This is what has led to large repair costs. The tenant cashback scheme does not address this.
It is actually cheaper to design the services for what the properties need. If the right repair is done once, at the time when the tenant wants it doing, that will achieve "economies of flow". Unit costs may be higher but that doesn't matter because there will be far fewer units. Choose a contractor to work with you on economies of flow, not unit costs, and you solve the problem. No more incentives for shoddy work, ghost work or job building.
John Little is housing lead practitioner for Vanguard Consulting
Source http://www.guardian.co.uk/
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