New gas contract saves £3 million in first year

Midland Heart have saved £3 million in the first year following the termination and re-tender of their gas servicing and installation contract.

Working in partnership with Vantage Business Solutions to undertake a commercial review of their gas contract Midland Heart have procured a new contractor which delivers better value for money, and a new energy efficient boiler investment programme that reduces customer’s energy bills.

9639-075"Terminating the old and outdated contracts and re-tendering for the service has allowed us to procure a model that is a far better fit for our current business needs. These are very significant savings that will represent a total of £30 million across the lifetime of the ten year contract - savings that we can invest back into our homes and communities.” Carl Larter, executive director of assets.

Carl continues: “This is a great example of how working together in a smarter way and in this case implementing a fresh procurement process, can bring rewards for both the business and customers. We are keen to replicate this model to other areas of investment to ensure all of our contracts are high performing and bring value for money.”

Vantage Business Solutions are leaders in transformational change and performance improvement in social housing supported Midland Heart with the review.

Rob Bryan, Director of Vantage Business Solutions, said: "We were able to support Midland Heart on the options appraisal, re-design of the supply chain and implementing a new approach that would allow them to make the necessary savings needed, while also delivering a significant investment programme of boilers to customers, being fully compliant and maintaining high levels of customer satisfaction.

"By investing in mentoring and coaching their current staff teams Midland Heart have up-skilled their workforce enabling them to achieve sustainable change for the future."

The wider survey of 15 larger registered providers, by Vantage found:

  • Re-procurement exercises do not guarantee results if you do not re-think your approach
  • In-sourcing planned maintenance can be successful but only with the right teams, infrastructure and culture
  • Long term partnership contracts can only drive lower unit rates with the right procurement and contract management approach
  • People and capability remain the most vital factor in achieving VFM in major works; there continues to be a skills shortage across R&M management teams.

Find out more about the survey.

Read more about the survey and our case study here.

Watch a short film about the review process and outcomes for Midland Heart.

 

13th February 2017 | Other news | Corporate News