Housing providers could save up to £1.6bn if they stopped buying products from external contractors, new research has revealed.
A survey of the 15 largest registered providers by Vantage Business Solutions found kitchen and boiler installations cost nearly 20% more when purchased via an external contractor.
The research also found that component installations could vary by as much as 80%.
Vantage said this extra cost could equate to 350,000 more kitchens, 600,000 more bathrooms or one million new boilers over a 10-year period.
Rob Bryan, operations director and transformation specialist at Vantage Business Solutions, said:
“By focusing hard on DLO productivity and unit costs, taking a more commercial approach to managing and negotiating external contracts and considering more innovative procurement approaches, major savings can be made sector wide.
The best in sector examples are where RPs take a step back on their delivery models, adopt a more holistic approach to procurement and breathe new life into stale delivery models which are now driven by data-centric commercial decisions.
The survey also found that long-term partnership contracts can only deliver lower unit prices with the right procurement and contract management approach.”