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April 16th 2008
Coast & Country heads consortium with £700 million spending power.

Coast & Country Housing is heading a North East consortium of social housing landlords which will bring major benefits for tens of thousands of tenants in the region.

The Government has now approved NE Procurement’s business plan which means it can use the collective purchasing power of its ten member companies to deliver substantial cost savings

The consortium’s project manager is Steve O’Leary, who is head of procurement at Coast & Country. He said: “Put simply, we can say to a supplier of heating systems – for example – that we want to buy on behalf of a number of companies, not just one. It’s not quite ‘buy two, get one free’, but the same principle applies.” The consortium, which has a combined spending power of £700 million, anticipates it will cut costs by 10% through collective purchasing.

As well as cutting costs, NE Procurement will offer job opportunities throughout the North East. Mr O’Leary said: “This was a key part of our business plan. It means if there are not vacancies for apprentices in one area, they can go to train and work in another. Or it might be a condition of the contract that the supplier has to take on two apprentices for every million pounds worth of business.”

NE Procurement is also determined to involve tenants in purchasing decisions. More than 100 tenants representing each member organisation took part in three supplier days in Newcastle. They evaluated products, interviewed suppliers and recommended which materials should be used in some of the 115000 properties managed by the consortium’s companies.

As well as Coast & Country, which has more than 10,000 homes in the Redcar and Cleveland area, the other members of the consortium are Blyth Homes, Dale and Valley Homes, Derwentside Homes, Erimus Housing, Housing Hartlepool, South Tyneside Homes, Tees Valley Housing, Three Rivers Housing and Your Homes, Newcastle. Other organisations have expressed an interest in joining.

Mr O’Leary said: “Naturally there was a bit of reluctance to share sensitive financial information when the consortium was first established. But everybody now sees the huge benefit this can bring about.”

There are currently nine similar consortia in the UK, although the Government wants that to grow to 30. NE Procurement is the third biggest. They were established in the wake of Sir Peter Gershon’s report, published four years ago, which called for dramatic savings in public sector expenditure.

Their development and performance is monitored by the Government’s Department of Communities and Local Government. It will ensure that the consortium remains effective and delivers its objectives of 10% savings together with its employment and training objectives.

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