Number of registered social landlords likely to plummet as ec procurement rules take effect

Registered social landlords (RSLs) have to advertise their contracts in the Official Journal – and face possible suits by disgruntled bidders – now that John Prescott’s Office of the Deputy Prime Minister has agreed they should be subject to EU procurement rules.

Until now the UK argued that RSLs were private bodies, but the European Commission disagreed and took the UK Government to court in December 2003. The Commission’s position was that the relationship between RSLs and the Housing Corporation is such that the RSLs should be treated as bodies governed by public law, and so should comply with the EU public procurement Directives.

The EC Procurement Rules apply to RSLs immediately, and, taking into account the terms of the UK implementing legislation, may also potentially be applied to any contract signed on or after 10 June 2004.

Simon Randall, head of Housing and Local Government Services at law firm Lawrence Graham, said it was bad news for RSLs.

“They will be burdened with the additional costs and delays involved in carrying out the necessary advertising, selection and bidding processes,” he said. “These bureaucratic rules create an uneven playing field between RSLs and private developers and house builders.”

But he offered some hope, too.

These bureaucratic rules create an uneven playing field between RSLs and private developers and house builders

Simon Randall, Lawrence Graham

“Not all public sector services contracts are within the scope of the full or any EC procurement requirements – land acquisition for example – and steps can sometimes be taken to reduce the impact of the rules, or to take your deal outside the rules altogether.”

Anthony Woolich, head of the EU/Competition team at Lawrence Graham, said this development would cut the number of RSLs operating.

“It’s simply not practical for each RSL to go out and take part in the EU procurement process themselves. In a few years time we will see a lot less RSLs, maybe half the number today, as consolidation will have the indirect effect of reducing the burden.”

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Source

Construction Manager