Put into force This month April 2015. New EU Rules.
We are instructed and controlled more than any of us realise.
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It looks as though the ‘value for money standard’ will remain untouched by the changes the HCA is proposing for the Regulatory Framework in April 2015.
Value for money is also an increasing priority for local authorities who have retained housing, whether they manage it themselves or through an ALMO.
So, will the new EU procurement directives make it easier or harder for housing providers to secure value for money? My colleague Andrew Millross will be debating this question with landlords at PfH Live later this month.
The new rules were passed in April 2014 and the UK government has two years to implement them. However, the Cabinet Office is talking about ‘fast-track’ implementation, so they could be in force later this year.
The introduction to the main EU directive refers to the importance of securing ‘the most efficient use of public funds’. One of the reasons the EU Commission says it is revising and modernising the 2004 directives is ‘to increase the efficiency of public spending’.
Value for money is at the heart of the new EU rules and a number of fresh provisions actively promote it
Value for money is therefore at the heart of the new EU rules and a number of fresh provisions actively promote it.
One such rule is an increased focus on lifecycle costing. The price of maintaining assets over their lifespan can now be considered when evaluating tenders, as well as their initial price.
There is even an opportunity for the government to ban ‘lowest price’ as a potential criterion for awarding public contracts (although it is unlikely that the UK government will go this far).
The new rules will give greater protection when using a buying club. Previously, a housing provider would be at risk of challenge if the buying club breached the EU rules when setting up the framework for joint purchasing.
Under the new rules, it is only the buying club that can be challenged, although the social landlord must still follow the rules for calling-off individual contracts from frameworks.
There are also proposals to simplify the ‘selection’ process, where a supplier’s financial strength, technical ability and experience is assessed when deciding who should be invited to tender. Self-declarations will be used, which are checked only once a supplier has won the contract.
The proposals also involve setting up central databases of suppliers’ accounts and registrations that landlords can check, rather than having to request them for each tender.
When considering the ‘value’ part of ‘value for money’, the HCA focuses on whether a housing provider’s resources are used effectively to meet its objectives.
These could include objectives linked to the environment, ‘fair trade’ or improving job opportunities for tenants.
The new EU rules will allow a greater focus on these value considerations when choosing a supplier so long as such considerations are relevant to the contract.
Richard Brooks is a partner at Anthony Collins Solicitors LLP. The impact of the new EU directives on social landlords will be discussed at PfH Live on 24 June 2014.
