A survey for Fusion21 has found that over half (59%) of procurement professionals feel they are under pressure to procure at the lowest price.
The organisation’s second annual Procurement Trends Report represents the views of 100 procurement professionals who work for organisations including housing associations and stock-owning local authorities – and collectively own more than one million homes.
The research was carried out during April and May this year, and it also found that 55% of procurement managers, directors and supply chain officers believe financial constraints have the biggest impact on their work and decision making.
In Fusion21’s inaugural report, published this time last year, more than half (51%) of respondents stated that quality had become a bigger consideration in their procurement decisions since the Grenfell Tower fire.
However, while 39% of those who took part in this year’s research said quality was an ‘extremely important’ consideration during procurement activity, a larger proportion (47%) identified cost savings as being the most significant.
“It’s short term thinking, driven by budget cuts,” explained one procurement professional who works for a housing association. “It’s about getting as much done for as little [money] as possible.”
A housing association director wrote: “Budgets are always stretched and we can’t always afford to pay for the quality we aspire to.”
When then asked what factors influence spending on property assets, the majority of respondents agreed that building compliance and safety works is the key priority, with budgets being predominantly focused in these areas.
Compliance with procurement regulations, however, remains the most important consideration during procurement exercises, with almost three quarters (72%) of all procurement professionals describing it as ‘extremely important’.
“We believe that procurement compliance is now a given for the housing providers we work with, and ‘quality’ is considered to be something over and above meeting legal and regulatory public procurement requirements,” said Sarah Rothwell, Fusion21’s head of member engagement.
“Some contributors to this year’s research outlined how they achieve more with less by using spending power to insist on certain levels of quality. This is coupled with building relationships with potential suppliers to help secure long-term cost savings.
“Taking this approach to procurement requires a certain skill-set, yet 43% of those who took part in our research said that they have faced, or expect to face, difficulties when recruiting talented people to their teams. More than half (53%) of those who work in housing said they outsource procurement activity to organisations like Fusion21 in order to access support and expertise.”