DLO or Outsourced Repairs Service?
Start with the service residents need, not the delivery model
An article written by MD Chris Furlong.
The debate over Direct Labour Organisations has divided the housing sector for years. Some organisations would never consider outsourcing repairs. Others would never contemplate bringing the service back in-house. Both can be equally certain that their preferred model is the right one.
That is why the same question continues to appear in boardrooms, committee meetings and sector discussions:
Should we have a DLO?
It is understandable, but it is not the right starting point.
The first question should be:
What repairs service do our residents need, and which delivery model gives us the best chance of providing it?
Residents do not generally care whether the person repairing a boiler, fixing a leaking roof or dealing with damp and mould is employed directly by the landlord or by a contractor. They care whether the problem is easy to report, whether the appointment is kept and whether the repair is completed properly.
They also care whether recurring problems are fixed rather than repeatedly patched. Above all, they care whether their home is safe and well maintained.
The delivery model matters, but only because of its ability to deliver those outcomes.
Repairs and the Consumer Standards
The question of whether to use a DLO or an outsourced contractor cannot be separated from the Regulator of Social Housing’s Consumer Standards.
Under the Safety and Quality Standard, landlords must provide an effective, efficient and timely repairs service. Residents should be able to report problems easily, understand expected timescales and receive clear communication while work is being completed.
That requirement goes well beyond completing a certain percentage of jobs within target. A compliant repairs service must identify risks, respond to residents’ circumstances and maintain safe homes. It should also use repairs information to improve its understanding of stock condition.
The Consumer Standards Code of Practice makes the expectation clearer. Repairs should be coordinated, completed in as few visits as possible and finished to a standard that is fit for purpose.
This changes the nature of the DLO debate.
The central question is not whether an in-house service is inherently better than an outsourced one. It is whether the chosen model allows the landlord to meet its responsibilities, understand what residents are experiencing and intervene when performance falls short.
Outsourcing does not remove accountability
A landlord does not transfer its regulatory responsibility by outsourcing repairs.
Where another organisation delivers the service, the landlord remains responsible for the outcomes required by the Consumer Standards. It must still be able to show that repairs are being completed safely, properly and within reasonable timescales.
A contract is not a substitute for control. Reported performance is not always proof that residents are receiving a good service.
Landlords need to understand what sits beneath the figures. They need to know whether repairs are being classified correctly, whether repeat visits are being captured and whether reported performance reflects the resident’s actual experience.
The same principle applies to a DLO. Direct employment does not automatically produce stronger assurance or better information.
The delivery model may change. The landlord’s responsibility does not.
Why DLOs have returned to the agenda
Many landlords moved towards outsourced repairs models because contractors offered scale, specialist capacity and access to established supply chains. Outsourcing could also reduce the direct management burden placed on the landlord.
The operating environment has since changed.
Consumer regulation has become stronger. Expectations around safety and accountability have increased. Boards and executive teams now need clearer assurance about service performance and the condition of residents’ homes.
This has brought control and visibility back into focus.
Some organisations are questioning whether they have enough control over priorities, whether they can rely on contractor data and whether they can respond quickly when risks emerge. These concerns help explain why DLOs have returned to the agenda.
The benefits of a DLO
A strong DLO can give a landlord closer control over its repairs service.
It can create clearer accountability, provide better visibility of day-to-day performance and build a closer connection between the organisation and its workforce. It can also support a culture that focuses on resident outcomes rather than narrow contractual measures.
Repairs operatives are often the most visible representatives of the landlord. They enter residents’ homes and see problems that may not be visible elsewhere in the organisation. This can include property defects, vulnerability and safeguarding concerns.
A good DLO recognises that repairs is not only a technical service. It is also a customer service and an important source of information about the condition of homes.
When that information is captured properly, it can support better investment decisions and earlier intervention. A DLO may also make it easier to redirect resources or respond to emergencies.
None of these benefits is automatic.
DLOs are not easy to run
A DLO is effectively a business within a business.
It requires competent leadership, reliable systems and strong operational control. Productivity must be understood, scheduling must work and the organisation must manage materials and vehicles properly.
The service also needs enough supervisory capacity to check quality and address poor performance. Without that control, costs can rise quickly.
Common problems include too much time spent travelling, weak diagnosis of repairs and poor control of follow-on work. Overtime and subcontracting can also become expensive where they are not managed closely.
Bringing a repairs service in-house does not automatically improve it. It transfers responsibility for every part of the service directly to the landlord.
Before creating a DLO, an organisation needs to be honest about whether it has the capability to run one. If that capability does not already exist, it must be clear about what investment and organisational change will be required.
Outsourcing is not the easy alternative
Outsourcing also requires strong management.
The landlord needs an intelligent client function that can specify the service properly, test performance and challenge the contractor when standards are not met. It must also be able to validate the data being reported.
A weak contract can lead to disputed information, inconsistent quality and repeated variations. It can also create a growing gap between reported performance and what residents actually experience.
Contractors may bring scale and specialist expertise, but they still need active client-side management.
A poorly managed DLO and a poorly managed contract are likely to produce the same result: poor services for residents.
Start with the service
Before choosing a delivery model, the organisation should define the repairs service it wants to provide.
It should be clear about how residents will access the service, what quality they should expect and how the landlord will know whether the service is working. It should also define how vulnerability will be considered and how complaints will be used to improve performance.
These requirements should form the basis of the decision.
Without that clarity, an options appraisal can become little more than a comparison of headline costs. It can also become an exercise in justifying a model that senior leaders have already decided they prefer.
The purpose should not be to validate a predetermined answer. It should be to identify the model most likely to deliver the service residents need.
The case for an options appraisal
Changing a repairs delivery model can affect residents, staff and finances for years. It can also create significant operational risk.
The decision should therefore be based on a proper options appraisal.
That appraisal should begin with an honest assessment of the current service. The landlord needs to understand how residents experience repairs, whether the Consumer Standards are being met and whether the available performance information can be trusted.
It also needs to understand the causes of current weaknesses.
If repairs are failing because of poor diagnosis, weak management or unreliable data, changing the delivery model may not solve the problem. The same weaknesses may simply transfer into the new arrangement.
Without a clear baseline, there is no sound basis for deciding whether a different model will work.
The choice is not simply DLO or contractor
An options appraisal should not present a false choice between keeping the current arrangement and creating a full DLO.
The right answer may be to improve the existing contract. It may be to create a partial DLO or use a hybrid model.
A landlord might keep core responsive repairs in-house while outsourcing specialist work. Another may retain an outsourced model but strengthen its specification and contract management.
Each option should be tested against the same questions:
- Will it improve outcomes for residents?
- Can the organisation manage it properly?
- Is the full cost understood?
Financial assessment should include more than the headline contract price.
A DLO may require investment in systems, vehicles and management. Outsourcing may require a stronger client-side team and carry different commercial risks.
The cost of transition also needs to be understood. A strong strategic recommendation can still fail if mobilisation is rushed or badly controlled.
Residents must influence the decision
Residents should not be consulted only after a preferred option has been selected.
The Transparency, Influence and Accountability Standard requires landlords to take tenants’ views into account when deciding how services are delivered. Where a significant change is proposed, consultation should take place while the decision can still be influenced.
Residents can explain where the current service is failing and what needs to improve. Their experience should help shape the future service and the measures used to judge whether it is working.
This is not simply a regulatory exercise. It is necessary if the future service is to meet residents’ needs.
What boards and executive teams should ask
Boards, councillors and executive teams should move away from asking:
Should we have a DLO?
They should ask:
- What service do residents need, and are we currently providing it?
- What is causing the current weaknesses?
- Which model gives us the best chance of meeting the Consumer Standards?
The recommendation should then explain the costs, risks and capability required to make that model work.
A financial comparison alone is not enough. Leaders need a clear line of sight between resident needs, regulatory responsibilities and the proposed operating model.
There is no universal answer
There is no single delivery model that will work for every landlord.
The right answer will depend on the organisation’s stock, geography and internal capability. Local labour markets and financial capacity will also matter.
For some landlords, a DLO will provide the control they need. For others, an outsourced model will remain the better option. A hybrid arrangement may be the strongest answer for many.
What matters is not whether the service is in-house or outsourced.
What matters is whether it is well managed and delivers the right outcomes.
My view
Arguments about DLOs can distract from the real issue.
The question is not whether DLOs are good or bad. The question is whether the chosen model is capable of providing safe homes and a reliable repairs service.
The same test applies to contractors.
Residents expect repairs to be completed properly. The Regulator expects landlords to meet the Consumer Standards. Boards need reliable assurance that this is happening.
None of that changes because of the delivery model.
Landlords should spend less time defending established positions and more time understanding the service residents receive.
Residents do not judge a landlord on whether it operates a DLO. They judge it on what happens when something goes wrong in their home.
How Integra Housing Consultancy can help
Integra Housing Consultancy supports housing associations and local authorities considering changes to their repairs delivery model.
We provide independent options appraisals based on resident experience, regulatory requirements and operational evidence. This can include a diagnostic review of the current service, assessment of realistic delivery options and support with mobilisation.
Our role is not to promote a predetermined model.
It is to help landlords understand what is working, what needs to change and which arrangement is most likely to deliver a safe and reliable service.
The question is not simply who carries out the repairs.
It is whether the landlord can demonstrate that residents are receiving the service they need.
