Preparing for an ageing population requires smarter procurement

It’s striking that out of the 22 million homes in England today, nearly half are occupied by someone aged 55 or over. Even more telling is that around one-third of all UK households are currently lived in by someone over 65.

With the Office for National Statistics predicting that the number of people aged 65 or over will pass the 16 million mark by the mid-2030s, it’s clear to see that there is only one way for these household figures to go. Housing and ageing is of huge economic and social importance and we must do as much as possible now to prepare effectively for the future.

One way to both meet the needs of older people and reduce demand on acute health services is by ensuring that housing is seen as an equal part of the integration agenda. Housing must be embedded into every decision about older people and my organisation is pushing for the development of a housing, health and care transformational fund (to go further than the Better Care Fund) that enables a truly integrated approach to service delivery, built around the needs of individuals.

This connection of housing, care and health is beginning to happen in many ways. But for it to take place on a wider scale we need it to infiltrate every housing, health and care pathway and process. A key example of this is procurement, an important but often neglected area in the population ageing debate.

In my sector, social housing, the benefits of strategic procurement are only just being realised. But I believe that if procurement is done intelligently, it can make significant savings and also play a vital role in helping the sector prepare for an ageing population. This is an issue that my colleague Gill Payne will be discussing at social housing procurement event PfH Live on June 24

The fact that we are all living longer is hugely positive. Yet it does bring big financial pressures for housing associations, who are particularly exposed to the impacts.

‘Implanting considerations about our ageing population into every housing decision is vital if we are going to prepare effectively for the demographic change on the horizon’

Recent research from the Smith Institute forecast that a housing association with 30,000 homes will have 7,500 more residents aged over 65 in the next 20 years, creating extra revenue pressures of £12.5m. Housing providers are getting their stock and tenant services ready for the increase in demand.

So how can better procurement help with this?

One way is through social value. There are exciting opportunities for procurement teams who understand their role in leveraging improved health, wellbeing and social care outcomes when contracting suppliers. This might take the form of a heating supplier who, as well as providing central heating systems, is contracted to hold educational events where they give tenants tips on saving energy and keeping warm, helping to boost the health of residents with conditions made worse by the cold.

Many social landlords are embedding community benefits in to their procurement work in highly effective ways and a recent Cabinet Office review of the Social Value Act recognised housing associations as being at the forefront of considering the wider impact when buying goods and services.

Smarter procurement can also help landlords prepare their stock for the increase in older tenants. Aids and adaptations will be essential, promoting the independence of vulnerable residents, many with disabilities or limited mobility. Construction materials will also be crucial as landlords improve mainstream housing stock and build specialist homes.

Strategic procurement of these products can help housing associations not only cut costs (for example by buying collaboratively), but also improve quality and guard against supply shortages.

But for this to happen there needs to be a move from the traditional, transactional approach where procurement is considered at the end of the process, when something needs to be bought. Instead a more strategic method must be adopted where procurement informs business decisions from the outset. We need to develop a clearer understanding of exactly where an organisation’s money is going and forecast demand by analysing spend data and evaluating contract delivery. It’s also about encouraging suppliers to work with landlords and not for them; a more equal dynamic that will drive prices down further and promote service standards.

Implanting considerations about our ageing population into every housing decision is vital if we are going to prepare effectively for the demographic change on the horizon. This is about everything from commissioning services to designing homes or providing advice. But it’s also about the business processes behind these pathways and re-thinking procurement is an important place to start.