Report of the Local Government Efficiency Review Group

10.1.9 Two issues arise in this respect. Firstly, there is the physical dimension in
terms of exchanging and replicating identified best practice in maintenance
and refurbishment work. Secondly, there may be a need to examine the
efficiency of administrative procedures to ensure that tenants are ready to
occupy vacant dwellings as soon as they are ready to be occupied.
10.1.10 In addition, the Group also considers that local authorities should to the
greatest extent possible avail of the professional services that are available
from in-house staff, from other local authority staff on a shared service
basis, or from staff of the new Housing and Sustainable Communities
Agency (incorporating the former National Building Agency) to support the
procurement and management of housing projects, as opposed to the
considerable costs associated with engaging the use of private professional
companies. Data from the Department of the Environment, Heritage and
Local Government suggest that where local authorities obtain full design
team services from consultants the cost can range from 7.5% to 12.5% plus
VAT @ 21% depending on the location, size, nature and complexity of the
project. It is estimated that less than half of the projects undertaken by local
authorities utilise external consultants.
10.1.11 For illustrative purposes, the following calculations show the potential saving
that would accrue for every €100 million worth of expenditure on traditional
housing construction. Of the €100 million, €83 million is the value of the
construction expenditure (€73m excluding VAT). Taking professional fees
at an average of 9% this gives a figure of €6.6m (excluding VAT). The
proportion of projects that are undertaken by the private sector, weighted to
reflect that larger projects are more likely to be externally managed, is two
thirds. This results in a figure of just over €4 million as the amount spent on
external consultants per €100 million housing construction expenditure. On
the assumption that local authorities would not use consultants in 50% of
cases, this would produce a saving in the region of €2 million on every €100
million of expenditure in housing construction. The actual amount of
savings will depend on the size of the construction programme (declining at
present), the availability of underutilised resources within the public sector,
the impact of new fixed price contracts and state of the market for
professional services which is currently driving down prices.
10.1.12 At present, an assessment of need for housing carried out in one local
authority is not valid in another. It is proposed, through the implementation
of the relevant provisions of the Housing (Miscellaneous Provisions) Act
2009 that a single assessment process be put in place, whereby a housing
assessment carried out by one local authority would be valid in another.
This should ensure that there are no duplicate assessments being carried
out. In the last statutory housing needs assessment carried out in 2008
approximately 5,500 duplicate applications were assessed by local
authorities. Assuming each assessment takes on average 1½ hours (in
fact, some can take up to 3 or 4 hours), one could estimate that this would
result in a saving of 8,250 working hours, equating to a saving of €0.2
million. In addition, the prospect of establishing specialist teams across
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