11 November 2010 | Michelle Reid

As the public sector faces huge cuts, Michelle Reid explains the ways in which customer involvement in areas such as housing can be a huge step to achieving value for money

The private sector has long recognised the importance of involving customers in product development and procurement. By drawing on the intelligence of its consumers, businesses can gain valuable insight into how their products can be improved and how they can buy better. Engaging customers often boosts brand loyalty and strengthens customer relationships.

The public sector too, is cottoning on. An increasing number of groups are being involved in how their services are commissioned and purchased. Local authorities know the benefits of encouraging public participation at decision points along the supply chain – from needs assessment and service design to tendering and monitoring contracts.

In the social housing sector involving customers in the decision-making process is not a new thing. But it isn’t happening widely enough, as I discussed at the recent Procurement for Housing annual conference.

It is now a regulatory imperative that social landlords involve residents in decision-making processes. But how can we ensure more landlords support resident involvement in procurement when the benefits for all are clear? By engaging social tenants in how their homes are managed and procured, they have ownership of the process and won’t automatically blame their landlord if things go wrong.

Should things go wrong, particularly within the supply chain, effective tenant engagement often provides speedy, realistic solutions to put things right. This is because tenants have the most to gain from their involvement, since it directly affects the quality of their homes and the services they receive. Residents also benefit from training as social housing organisations invest in developing their skills so they can make informed contributions on governance and performance scrutiny.

For landlords, empowering tenants to actively participate in procurement around social housing can drive up standards, boost expectations and save millions of pounds. Sheffield Homes, which manages 42,000 properties for Sheffield City Council, has saved £1.9 million on the purchase of taps since 2008. The procurement team invited tenants to an open day where they could indicate their preference on a range of products – from boilers and bathroom fittings to windows and front doors. Through tenant questionnaires, Sheffield Homes was able to focus on buying preferred goods and reduce the wide range of products they had been stocking and repairing.

Suppliers can also benefit 
from tenant engagement. Procurement for Housing, for example, ensures that suppliers bidding for work must be able to demonstrate their offering to tenants, providing valuable feedback for contractors.

With the recent demise of several social housing bodies amid the Coalition’s quango squeeze, the question of how we protect tenants’ right to scrutinse is more relevant than ever. The answer, we hope, will be to safeguard the existing national standards on tenant engagement in the forthcoming Decentralisation and Localism Bill. Government must recognise that, at a time of deep cuts, involving tenants in procurement is key to achieving value for money.

* Michelle Reid is chief executive at Tenant Participation Advisory Service

Key Points

• Engaging customers to improve products is not limited to the private sector
• Social housing tenants welcome the decision- making process
• Sheffield City Council saved £1.9 million by engaging with tenants’ opinions