Blog5th August 2026
“As a sector, we need to move to a truly collaborative enterprise where each partner can be profitable so that we can create a viable retrofit ecosystem where risks and savings are shared.”
This was one of the user stories we created after consulting more than 80 landlords and suppliers about their biggest challenges in achieving retrofit at scale.
We didn’t need to convince them that retrofit must be done. Climate targets, regulatory demands and resident needs have already achieved that. The question sitting with them is ‘how’ to deliver at scale – because everyone in the sector knows a fundamental truth: the current model is broken.
Retrofit’s procurement problem
As Transform-ER’s original project consortium of 13 partners came together, our combined decades of sector experience had shown us that most retrofit procurement follows a familiar and largely dysfunctional pattern.
And this was backed up by all our stakeholder engagement too. Social landlords told us they publish specifications, consultants then layer on requirements and contractors price on incomplete information.
The lowest cost wins – almost inevitably, because when price is the only real differentiator, that’s what gets selected. The consequences are predictable: adversarial contracts and risk contingencies that inflate costs and benefit no-one.
When you pair this with an already fragmented sector characterised by piecemeal programmes and uncertain long-term funding, you also see two of the other biggest retrofit challenges emerge: projects where valuable information and learning is lost at every handover and a supply chain that can’t invest in capacity because pipeline certainty doesn’t exist.
The result? Spiralling costs, poor quality and slow programmes.
This – of course – is not a problem solely for retrofit. Analysis from Project 13 examining contracts delivered across London found 50% value leakage between what clients paid and what suppliers received for the work actually done.
But retrofit-specific problems compound this further in the complex context of home energy upgrades. Resident access, unforeseen property defects, complex trade sequencing – these risks can’t simply be transferred to a contractor through a Design and Build contract.
They must be managed collaboratively or we will continue to see the sector’s consistent challenges of spiralling costs, poor quality and slow programmes – which are damaging for landlords, supplier and residents alike.
Where alliancing comes in
In our search for alternative models, we came across the concept of alliancing. It emerged from North Sea oil field development in the 1990s and has since been applied across water, highways and major construction. A variation of it was used in the delivery of Heathrow T5 – a project that’s well known for delivering on time and to budget after a spate of UK infrastructure schemes which categorically did not.
The core logic is this: instead of pitting parties against each other – each managing their own risk, overhead and interests – an alliance brings the entire delivery team together under shared governance, shared risk and shared incentives from the outset. In practice, that means:
Open book costing. Everyone works to the same target cost, with full financial transparency. Risk allowances are visible and collectively managed – when risk is resolved in one area, the budget moves to where it’s needed, rather than being pocketed or buried.
Selection on culture, not just cost. Alliance partners are chosen for skills, behaviours and genuine willingness to collaborate. Transform-ER, for example, has adopted our partner IP Initiative’s approach of using principles – such as fairness, unity, openness and no blame – during selection to test whether potential partners are ready to work this way before they’re in.
Collective problem ownership. Problems aren’t passed down the chain. They’re owned by the alliance and resolved by whoever is best placed to fix them – a meaningful shift for suppliers who have historically been told what to do and then penalised for doing it.
Outcomes insurance. Uniquely, our partners IPI’s model includes insurance-backed performance assurance: cost overrun insurance and latent defects insurance that give clients a level of certainty that conventional contracts don’t provide. Our plan is to use this approach at scale, but we can move towards this using more familiar contracts to support the sector to make the shift.
Alliancing in practice
The results speak for themselves. IPI’s last three projects all finished early and under budget. Even the least successful of their projects – a complex museum refurbishment involving two floods, ground contamination, asbestos and Covid – overspent by just 2.3%. Every participant wants to be involved in another IPI project
We also adopted an informal alliancing approach for Transform-ER’s first demonstrator home – which took the house from EPC D to A, in four weeks and at half the cost of previous comparable schemes. All trades were engaged from day one of the preparation phase. Sequencing was agreed before works began. The result was fast, low-disruption delivery with the resident in-situ – read the full story from Bow Tie Construction’s Rafael Delimata.
This is the story of how everything that could go wrong at the start went wrong, and how a different approach to planning, collaboration, and cost management turned what could have been a disaster into one of the most satisfying projects of my career.
What it means for social landlord
Transform-ER has built the alliancing approach into its new end-to-end integrated retrofit delivery model.
Drone scanning and AI analysis capture high-resolution property data before anyone is onsite giving landlords the data they need to create long-term programmes with robust business cases. This helps give suppliers the confidence they need to invest and enables them to offer pre-costed, PAS-compliant ‘kits of parts’ that provide cost and outcome certainty earlier.
Minimising onsite surveys also helps cut resident refusals and dropout rates that plague conventional programmes – which can be as high as 20 to 50% as reported in our stakeholder engagement. With a resident-first approach, Transform-ER is also focused on ensuring the people in the homes get their say.
We then bring together alliances of installers and suppliers to deliver these programmes, chosen based on their fit with the project and their ability to deliver its outcomes. Working as one helps mitigate the value leakage we referenced earlier – driving down costs, being open about shared learning, enabling lessons to unleash scale.
Also – retrofit is hard. We shouldn’t be making it harder by partners working against each other, all focused on how they are going to make their margin and reduce their own risk. Alliancing aligns teams around a shared mission, shared values and gives them a chance to work together in a positive way, doing what they do best and enjoying it. As testified by these IPI alliance members!
“Thoroughly enjoyable, less stressful, collaborative, productive and successful. A breath of fresh air in an ever-increasingly difficult world of construction.”
“Very good and rewarding, feeling very much part of a team – true collaboration.”
“Just brilliant – I want more!”
Accelerating speed, scale and learning
What’s more, the alliance delivery structure ensures that learning accumulates across a programme rather than being lost each time a new team is procured.
For social landlords, the practical benefits are designed to be game-changing:
- Earlier cost certainty grounded in real data
- Delivery risk managed collaboratively rather than pushed downstream
- Supply chains that can invest and scale because they have a predictable pipeline
- Learning that carries forward rather than evaporating at re-procurement.
We think that alliancing – properly applied, with the right partners and the right contract structures – offers a credible answer to the procurement dysfunction that has held the sector back. And with several new pipelines on the horizon for Transform-ER, we look forward to reporting back on our progress!
Download our culture change toolkit designed to support retrofit programmes align their values and work together in a more collaborative and effective way.
You can watch a deeper dive into our alliancing approach with this Healthy Homes Hub masterclass.