Following a critical Short Notice Inspection report by the Audit Commission, Severn Vale Housing Society has transformed its procurement processes with the help of the Buying Support Agency and has already made savings of over £400,000 in the first year.
Tim Knight, Finance Director at Severn Vale Housing Society, said, “Nobody likes negative feedback, but we took the regulator’s findings on board and decided to not only meet the inspectors’ recommendations, but to exceed them by developing a roadmap for future improvements. The challenge for us was that we didn’t have the in-house skills or experience to do this alone.”
Matthew Roper, managing director, Buying Support Agency, said, “When Tim explained that the Commission’s audit pointed at poor value for money, a weak procurement approach and a lack of customer involvement, the challenges sounded similar to those of other businesses that we have helped.”
The project began with an in-depth audit by BSA of Severn Vale’s procurement processes, which laid the foundations of a procurement strategy that included specific tasks to help Severn Vale develop more effective procurement processes.
A procurement improvement working group, comprising a range of stakeholders including some Severn Vale managers with budget responsibility and customers of Severn Vale’s services, was set up to develop a set of purchasing procedures and development activities to guide all future buying.
Severn Vale now has evidence of the potential financial improvements available by adopting a value for money culture and treating external expenditure strategically by first implementing a procurement strategy with clear procedures and training, secondly reviewing and renegotiating all supplier contracts, and thirdly using BSA’s supplier contracts as needed.
Last year, Severn Vale made savings of over £400,000, including £20,000 on cleaning services, £25,000 on asbestos removal services, £19,000 on vehicles, and £40,000 on lift contracts.
Knight said, “All of the changes have been about doing things properly and cleverly, and after three years of hard work, 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.”