With the launch of the new Procurement Act just weeks away, NHMF NPC Frameworx Director, David Miller examines the key housing procurement trends to look out for in 2025 and considers the likely impact on the sector.
#1 Social Value
Something we particularly welcome is the government’s highlighting of social value initiatives as part of the new Procurement Act, which comes into force in February. Service providers will need to demonstrate they are committed to delivering more than just products and services. As the procurement evaluation process expands to include a range of criteria – including job creation schemes, contributions to local community projects and environmental benefits – the onus will be on service providers to dig deep and come up with meaningful strategies that deliver long-term benefits for residents.
Outcome: A move towards more detailed monitoring and reporting metrics so that housing providers can evaluate bids based on broader social benefits to assess service providers’ delivery. This is good news for residents too, with a shift towards more resident-centric schemes, where bids that include community-focused initiatives get the green light.
#2 Compliance
Increased regulatory and environmental requirements, including the Building Safety Act, the Warm Homes: Social Housing Fund and Awaab’s Law will continue to shape the procurement process. Housing providers must ensure contractors comply with stricter safety, energy efficiency and tenant engagement requirements.
Outcome: More stringent pre-qualification measures with the likelihood that compliance checks will be incorporated as a fundamental part of the procurement process.
#3 AI and digital transformation
With housing providers constantly looking for new ways to streamline the vendor selection process, there will be a more investment in AI powered tools to assist with data management systems and digital procurement tools.
Outcome: Data-driven procurement systems will lead to a faster, more efficient tendering process, with a focus on transparency. This will include advances in the way housing providers assess costs and identify inefficiencies, plus more efficient solutions to measure compliance procedures and track social value contributions. On the downside, there are pitfalls withusing AI and digital procurement systems are costly, withconstantly evolving technology. Housing providers will need to think carefully before in investing in the most future-proof software within their budget and ensure, as with any AI technology, the human element is not lost.
#4 Sustainability targets
Sustainability criteria will continue to play a key role in the tendering process, with the government keeping this firmly on the agenda through WH:SHF and Decent Homes.
Outcome: With the emphasis on Net Zero and renewable energy integration in new social housing developments, service providers must be ready to present a clear roadmap outlining how they will reduce carbon emissions and meet energy performance standards in line with government legislation. It will be vital to look beyond the initial cost and consider the long-term benefits – both for housing providers and their residents.
#5 Sustainable and Modern Methods of Construction (MMC)
With sustainability targets high on the agenda and an increasing interest in MMC as one way to meet the government’s ambitious targets for new homes, procurement managers will be actively looking to source specialist contractors with expertise across these key areas.
Outcome: Suppliers must demonstrate a proven track record in delivering innovative housing schemes or largescale projects that not only meet with quality and compliance regulations, but will also stand the test of time.
#6 Sharing the risk
Many housing providers have already identified the benefits that come with long term client / supplier partnerships. This is particularly significant for largescale projects where being part of a consortium or wider network to manage the risk may be an advantage.
Outcome: By actively seeking to establish long-term collaborative partnerships, contractors benefit from sharing the financial risk and delivering economies of scale, whilst providing greater continuity and higher standards across a wide range of projects.
#7 Consolidation and Mergers
As we continue to see more consolidation across the sector, procurement teams will be under pressure to demonstrate operational efficiencies alongside the inevitable challenges that come with merging frameworks and finances.
Outcome: With procurement budgets coming under more scrutiny due to inflation and economic constraints, housing providers will need to double down on their negotiating skills to deliver the most cost-effective options without scrimping on standards. By focusing on the project lifecycle costs rather initial budgets, procurement teams will be able to take the long view and ultimately save money further down the line.
Learn more
As we count down to the launch of the new Procurement Act on 24th February, Frameworx will be hosting a range of fringe events at this year’s NHMF Maintenance Conference on 21st – 22nd January, in the Frameworx lounge. These will include the opportunity to put your questions to procurement experts, Andrew Millross (Anthony Collins Solicitors) and Lee Maskell (FFT).
In addition, our partners at CLC, Wates and Ian Williams will be match-funding a donation to key clients from the Frameworx social value fund and presenting a cheque to support social value during the event, sharing case studies and lessons learned from recent social value projects at the same time. There will also be the chance to catch up with the Frameworx team to find out about the journey so far, and our plans for growth in 2025. This is a great opportunity to do some final checks and balances before the Act comes into effect next month, so make sure you join us! Please follow the link to register: https://www.nhmf.co.uk/conference/
In the meantime, with just weeks to go until the new Act comes into force, it remains to be seen how effective the new legislation will be in addressing the sector’s key concerns around transparency, compliance and social value initiatives. One thing for certain is 2025 is set to be an exciting year and we are looking forward to rising to the challenge.
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To find out more about how Frameworx can help with your next procurement project, please get in touch with the team.
Author: David Miller, NHMF NPC Frameworx Director
Consultant at Rand Associates, Chair of M3 Housing
David is a quantity surveyor by profession, being a Member of the Royal Institution of Chartered Surveyors, and a Fellow of the Chartered Institute of Building, he joined Rand Associates in 1975 and has been involved in the maintenance of social housing for the last 25 years.