Using data analysis to support social procurement: a review of housing association supply chains

Over the last few months Supply Change has been part of a team alongside HACT and Renaisi, reviewing the future strategic direction of the Community Impact Partnership (CIP) - a social investment fund launched by four of the largest Housing Associations (HAs) in the UK to support social enterprises.


As part of this research, Supply Change was given the unique opportunity to analyse the spend and contract data of 8 UK Housing Associations to explore how operational and commercial spending could be used to support purpose driven organisations and how this might shape the future direction of CIP.


The results have provided useful insight into trends across housing supply chains and demonstrated both the benefits and limitations of data analysis when considering such a complex topic as social procurement opportunities.

Interested in finding out how spend analysis could help your organisation to work with more social enterprises? Get in touch with beth@supplychange.co.uk

Our Approach


8 HAs, some of the UK’s largest among them, took part in this analysis and provided Supply Change with data sets on their contracts and spending. We cleaned and categorised the spend data and enriched supplier data with information from Companies House to be able to identify existing social enterprise suppliers and shared suppliers across the HAs involved. For the purposes of this research we used a broad definition of purpose driven organisations to include organisations with a focus on sustainability, and any organisation with a social impact certification such as B Corps or cooperatives.


Identifying opportunities

When considering what might be considered an opportunity area for purpose driven organisations we came up with the following criteria:

  • Size: We looked for spending categories with contract values below £250k

  • Supply: Categories where there is already a known, healthy social enterprise supply in the UK

  • Low barriers: Categories that presented low barriers to entry for new organisations

  • Pioneers: Categories with examples of leading social enterprise success stories

  • Investment risk: Categories that fell under a low risk market for investment, had the potential for large scale impact and aligned with CIP’s priorities.


Our findings


Housing supply chains have a small amount of major contracts, and a long tail of smaller opportunities

Across all 8 HAs the distribution of spending and contracts followed a similar trend. HA supply chains tend to be comprised of a small amount of high value contracts which represent the majority of total spend, some medium sized contracts and then a long tail of smaller sized contracts. Each area requires different strategies when considering social procurement opportunities. High value contracts over £5m present opportunities for subcontracting to purpose driven organisations, medium sized contracts between £1-£5m could be delivered by a consortium of social suppliers, but the opportunities for direct procurement from social enterprises lie in the long tail of smaller contracts below £1m.


There are early signs of social enterprises delivering larger operational contracts

We identified examples of social enterprise ‘pioneers’ delivering contracts for HAs in areas such as grounds maintenance, cleaning and property management but these examples are still quite rare and the supply of large, scaled up social enterprises is limited. It is worth investigating what factors were at play with these examples to contribute to their success. There are some common social procurement opportunity areas across HAs

From the analysis we were able to identify opportunity areas that appeared across all of the HAs data such as cleaning, planned maintenance works, construction and grounds maintenance. Where geography allows it, this seems like a great opportunity for HAs to deliver shared social value goals through joining up procurement and communicating with each other.


Housing associations share common major suppliers

We identified major contractors that were shared across the HAs, many of these organisations are already supportive of social procurement and the size of their contracts present opportunities for subcontracting to purpose driven organisations. It is worth HAs exploring how tier 1 suppliers can help to achieve social value goals and what can be learnt from those who are already using their spend for good.

CIP is a partnership between

Clarion Housing Group, The L&Q Group, Orbit Group and Peabody Group

Challenges and limitations


Although our analysis has raised some interesting insights that will help further in research there were some challenges and limitations faced when reviewing the data which is important to consider.


There is no common categorisation of contracts across the housing sector

Procurement contract registers and spend data are usually not used for data analysis, but rather tools to keep a record of the current and past contracts with the project manager and the supplier in one place. These documents are often updated by multiple colleagues in procurement teams, sometimes data points can be missing. There is also no universal contract categorisation method shared by the housing sector which makes cross organisational analysis challenging. Developing a common standard to be used across the sector would enable more detailed analysis.


Spend data analysis provides an overview of current spending only

While spend data analysis can provide a good overview of HAs’ current spending, there are many factors that are not possible to see in the data. These include:

  • Future procurement needs

  • Anecdotal evidence from procurement teams

  • Subcontractors of major suppliers

  • Challenges or successes of current and previous contracts

  • Impact & sustainability outcomes and priorities

That’s why alongside this analysis HACT, Renaisi and Supply Change have been carrying out interviews and surveys with both the housing and social enterprise sector to further narrow down on our findings and inform the next stages of CIP’s review.

Summary

It’s clear that HA supply chains present multiple opportunities to procure goods and services from purpose driven organisations and in doing so support their ability to scale and deliver impact. However, deciding which opportunities to focus on in order to achieve the most success is hard to decipher from data analysis alone. Further investigation of the opportunities within major suppliers supply chains and communication across the housing sector to identify areas of collaboration will help to clarify this further.

Interested in finding out how spend analysis could help your organisation to work with more social enterprises? Get in touch with us at beth@supplychange.co.uk