Business group argues competition will create better homes and savings for taxpayers

The CBI says opening up social housing to greater competition could lead to better quality housing for tenants and considerable savings for taxpayers.

In a report launched today the CBI says that £1.5bn could be saved in England alone by allowing local councils and housing associations to choose the best provider of services, whether they are from the private, voluntary or charity sectors.

The “Improving homes, improving lives: using competition for better social housing” report is being launched at the Inside Government Social Housing Conference in London.

It contains case studies of where the private sector is already providing high-quality social housing, and shows the benefits of their involvement, which include better property maintenance and related social and economic improvements such as higher GCSE pass rates.

The CBI is calling on the government to:

  • Create a competitive market for social housing management services, with in-house providers competing against bidders from other sectors to deliver services
  • Allow housing management contracts of at least 10 years in order to attract investment from providers and enable economies of scale to be achieved
  • Eliminate barriers to market entry such as higher VAT rates for private providers
  • Use best-practice case studies to show commissioners how to ensure staff can transfer smoothly from the public to private sectors
  • Design contracts that can track the impact that housing providers make on other parts of the public sector, such as contributing to better education or safer communities.

Susan Anderson, CBI director of public services & skills, said: “Our report shows the benefits that can be achieved from introducing private providers into the social housing market. There is a clear link between high quality housing and good health and better educational attainment.

“At present only one in 80 homes is currently managed by the private sector. The Government must create a competitive market for social housing management services and allow longer contracts to encourage more providers to enter the market.