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Housing ambitions hit by supply chain problems

Supply chain issues are having a major impact in Wales as providers of social and affordable housing report problems with materials supplies, price increases and delays to projects, according to a new survey.

Tyfu Tai Cymru (part of CIH Cymru) found that this is having a significant impact on their commitments to build new homes and improve, maintain and ensure the safety of existing homes.

The survey, which heard from 31 organisations, found that:

  • Almost 90% are having significant or moderate issues with supply chains for building new homes, day to day maintenance and retrofitting
  • Access to timber has seen the most significant impact but items needed for all aspects of building homes, and carrying out maintenance/repairs have been affected to one extent or another
  • Increased prices of 30%-40% were identified across a range of materials including timber, steel, concrete and fencing.
  • Over 75% of respondents thought issues in the supply chains had become more significant in the 6-month period leading up to August 2021
  • In addition to cost, 96% of respondents reported that one of the main impacts has been on time-delays 
  • Respondents cited the impact of COVID-19, Brexit and surges in demand at both a national and global level as some of the driving forces behind supply chain issues.

Responding to these pressures the report found that organisations are changing how they work in a variety of ways. Including delaying some major work, increasing lead-in times and revising contract conditions with suppliers.

One respondent said: ‘My personal role is focussed on the building of new homes and I have been involved in this for over 30 years and I have never witnessed anything as concerning as the current situation on an already limited and stretched supply chain.’

For the Welsh Government the report’s recommendations include having a more planned approach to understanding supply chain challenges facing the sector, reviewing grant funding flexibility to account for cost increases and supporting SMEs with cash-flow to ensure companies serving the sector remain sustainable during times of economic uncertainty.

For the sector the report suggests reviewing staff skills to identify where up-skilling some roles could reduce reliance on supply chains, approaching procurement of goods and services as coalitions and engaging tenants at an early stage to communicate the challenges being faced and use their expertise to inform each organisation’s approach.

Catherine May, Tyfu Tai Cymru manager said:

‘Whilst we’ve strongly welcomed the clear vision set out by the Welsh Government to deliver 20,000 low carbon social homes, and significantly improve the efficiency of existing homes we can’t ignore the tension between that vision and the realities of the operating environment many providers of social and affordable housing are facing.

‘These pressures aren’t going to subside overnight, whilst the sector must continue to adapt to these challenges, so too must the Welsh Government seek to get ahead of these issues and create a focussed plan so that we increasingly find ourselves on a stronger footing to meet our shared ambition for housing in Wales.’

Helen White, chief executive of Taff Housing, said:

‘Without doubt supply chain challenges leading to higher prices and delays could severely hinder our ability to deliver the future homes we so badly need. Global events have created a perfect storm, we need to think creatively and work collaboratively with our partners in government and the private sector if we are to minimise the impact on future and existing tenants. The findings of this report back up all the anecdotal evidence, pressures on the supply chain are making a significant impact in the form of delays, shortages of labour and materials, higher costs and planning challenges.’

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