Michelle Allott, Director of Finance, Together Housing Group and David Armstrong, Chief Financial Officer, Flagship Group write about their experiences of bringing repair services in-house, and the advantages this has brought.
Michelle Allott, Together Housing Group:
Having an in-house repairs team has meant that whilst we have been in control of when and how we work through lockdown, rather than relying on sub-contractors, we’ve had the carrying cost of our labour and overheads.
We took the decision across our group to place a large proportion of the team on furlough leave, which allowed us to support 80% of the labour costs. With less repairs work and few tenancy terminations, it did mean that material costs were considerably reduced.
As we now return to a new ‘normal’ we have returned a large number of our furloughed staff, and are working through our backlog of repairs and returning our empty homes back for letting again. The new challenges are now supply chain issues, demands on specialist sub-contractors and ensuring safe working practices – all this and making sure that the costs remain within budget as we stay safe and catch up.
David Armstrong, Chief Financial Officer, Flagship Group:
Having brought repairs in-house we wanted to do the same for gas servicing to extend the benefits – VAT savings, overhead efficiency, agility, control, visibility of costs and transparency of data. Rather than build it up from scratch we chose to buy a local company as a faster, safer route – in fact we’ve bought three.
During the coronavirus crisis, we’ve had to pause installation work and servicing has been difficult with access rates well below usual levels. As a result, a significant part of the workforce has been placed on furlough leave, and we top up the payments to full salary levels which is generating tremendous positive feedback from staff.
One of the big challenges is funding operations when income from both internal and external commercial work has largely paused. We’ve had to invest additional capital into the subsidiaries to continue operations and as a result we are looking again at how best to structure contracts and operations in the event this or something similar happens again.
I remain delighted we brought gas in-house. Besides the benefits listed earlier, having the service in-house has made managing through this crisis much simpler, more transparent and easier to control. We’ve also been able to protect three local companies from significant financial difficulties and protect a large number of gas engineers from potential redundancy – so there is a wider social and economic benefit beyond Flagship.