Epping Forest District Council has just signed an innovative repairs management contract with Mears Direct for up to 9 years, which harnesses the commercial benefits and experience of a large private sector contractor, coupled with the advantages and cost-effectiveness of the repairs workforce being retained in-house by the Council. Referred to as in-sourcing by the Council, this unique approach is believed to be the first in the country, and forms part of the Council`s comprehensive Repairs Refresh Programme.
For many years, the Council`s repairs service has been provided by its in-house Building Maintenance Works Unit. Many other local authorities have outsourced their repairs service in the past and delivered it entirely through a private contractor. Usually, this involves all of the Council`s tradesmen, office staff and managers transferring to the contractor under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
However, this is often seen as a high risk and potentially high cost approach, for both the landlord and the contractor. The contractor has to employ an unknown workforce, and therefore ensure that its contract price includes significant contingency costs, met by the Council. The Council also runs the risk of the contractor going into administration in the future, and losing all the workforce “ as has been the case with two large repairs contractors recently.
The Council also sees many advantages to retaining its own repairs workforce, which is reflected in the Council`s consistently high levels of customer satisfaction. However, the Council has recognised that a much more commercial and streamlined approach needs to be taken, and that it would benefit from the support and experience of a large repairs contractor like Mears Direct, which can also give access to its well-developed back-office functions such as health and safety, HR, procurement and, crucially, its customer-orientated IT systems.
Insourcing, through the Council`s Repairs Refresh Programme, takes the unique and innovative approach of combining the benefits of retaining an in-house team, with the commercial best practice of a large private sector contractor, to deliver a first class repairs service. The approach is expected to become a blueprint for the future delivery of repairs by social landlords, especially since housing associations are able to benefit from the 20% saving in VAT by providing the service in-house, rather than through an outsourced repairs contract.
In order for Mears Direct to receive performance payments, the contract requires the company to achieve all the challenging performance targets each quarter. These include undertaking emergency, urgent and routine repairs within 4 hours, 3 days and 2 weeks respectively, whilst maintaining 98% tenant satisfaction.
In addition, Mears Direct has to deliver 5 key projects in the first year, including the installation of its own streamlined repairs IT system, the introduction of an appointment system for all repairs and mobile technology for the Council`s repairs workforce, and the provision of a more cost-effective supply chain for repairs materials – for the Council to benefit from the purchasing power of Mears Direct to reduce unit costs.
A further innovation was the appointment process for the contractor. Representatives of the Council`s Tenants and Leaseholders Federation were involved in the formulation of the approach from the outset, which was devised by Cameron Consulting, specialist procurement advisors in the construction industry.
Since the in-sourcing approach involves the physical placement of a Manager to lead the Repairs Service, the appointment process culminated in a novel Assessment Centre, where the candidates identified by each of the tenderers as their potential repairs managers were required to participate in a range of exercises to assess their suitability, as well as that of their employer.
Jane Nelson, Mears Directs Managing Director said Epping Forest District Council`s innovative tender for the appointment of a repairs management contractor is the first of its kind in the country and everyone at Mears is excited at the prospect of being part if it. We believe this will be a model that will be emulated by many social housing landlords throughout the country.
The Council`s Housing Portfolio Holder, Councillor Maggie McEwen said The Council has considered, on the one hand, the wishes of our tenants to continue to have the Council`s own tradesmen undertaking repairs in their homes and, on the other, the need to improve efficiencies and value for money through a more commercial approach. She continued, In-sourcing is the perfect low-risk for the Council and its tenants. Mears have demonstrated through their tender that they have a good understanding of what the Council is trying to achieve. In these times of austerity, I am confident that with the experience Mears can bring, the Council will be in a much better position to provide a good quality, efficient, repairs service long into the future.
The Council`s Assistant Director of Housing, Paul Pledger, and Mike Gammack from Mears Direct, have been invited to present the in-sourcing approach at the Chartered Institute of Housings Annual Conference in Harrogate later in June.
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