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Latest at Inside Housing: Housing association reviews contracts as council cuts bite

08/08/2014 | By Jess McCabe

Budget cuts prompt Aspire Housing to consider terminating services

Aspire Housing is reviewing all its contracts with local authorities, as councils in the Staffordshire area implement cuts to housing and care services.

Wayne Hughes, managing director of 9,000-home Aspire, based in Stafford, said it is examining the conditions under which it can end existing contracts and ‘taking a close look’ at those for which it is invited to tender.

The review has been prompted by cuts to Newcastle-under-Lyme Borough Council and Staffordshire County Council’s budgets.

Newcastle-under-Lyme had to make cuts equivalent to £75 per person in 2014/15 from the 2010/11 budget level, and expects to have to make another cut of about 10% in 2015/16. Staffordshire County Council cut £6m from its £11m Supporting People budget in January.

Aspire provides services on behalf of the two councils, among them sheltered housing projects, floating support, debt advice and a tele-care service that offers alarms to vulnerable residents in contracts.

The contracts are worth several hundred thousand pounds.

Until now, if council funding was insufficient to pay for services, Aspire topped this up from its own reserves. However, Mr Hughes said Aspire is now less likely to adopt that approach.

‘In the past, in all honesty, I think we have signed almost anything in an overwhelming desire to deliver services. [Now] we can’t provide the service at that level [of funding]. If the value exceeds the cost, then why are we doing it?

‘All opportunities are evaluated against the absolute need to produce a quantifiable social and/or commercial return.’

Aspire is also ‘taking a closer look’ at how it can exit contracts before signing up.

The association did not bid again for the contract to provide Newcastle-under-Lyme’s housing advice service, which it had run since 2009.

The council advertised the contract in the spring at between £1.5m and £1.6m, but council minutes show that it had to increase the funding available to secure a winning bid of £1.8m by Midland Heart in May.

Aspire declined to disclose the value of the previous contract.

A spokesperson for Staffordshire County Council said: ‘It would seem sensible for any organisation to ensure it had a sustainable, financial model in place.’

A spokesperson for Newcastle-under-Lyme council said that, despite some resistance from housing providers, the ‘outcome-based approach’ normally enabled ‘creative’ responses to cuts.

Jake Eliot, policy leader for health, care and support at the National Housing Federation, said many landlords faced ‘tough decisions’.

‘In the competitive tendering environment, with local authorities passing on significant cuts to services, it is more important than ever for independent providers to understand their costs and prices, and to be clear and confident about what they need to provide high-quality, safe and effective services,’ he said.

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