Laban Giles, managing director of Connect It Utility Services, explains how utility procurement is becoming an increasingly important decision for housebuilders to get right.
Housebuilders are operating in one of the most challenging market conditions in recent memory. Margins are tight, borrowing costs remain high, and viability is under constant scrutiny. In this environment, every procurement decision matters. Yet one critical area continues to fly under the radar: utility infrastructure.
Utilities are fundamental to delivery. They dictate programme, influence cash flow and can determine whether homes are completed on time, or at all. And yet, many developers still treat utility procurement as a fixed or secondary decision, rather than one that deserves the same commercial challenge as any other major package.
That complacency is becoming increasingly risky.
A market that limits choice
The structure of the utilities market has changed significantly. Independent Connection Providers (ICPs) were originally introduced to increase competition and flexibility. However, many ICPs are now wholly or partly owned by Independent Distribution Network Operators (IDNOs), creating vertically aligned relationships between the party building the network and the party adopting it.
On the surface, this can appear efficient. In reality, it often limits choice.
Developers may find that their ICP can only work with one preferred IDNO, or that the adoption route is effectively predetermined before a shovel even hits the ground. That lack of transparency makes it difficult to benchmark asset values, compare adoption terms or understand whether the proposed solution is genuinely the best available.
This is not necessarily the result of bad practice, it is largely the consequence of market consolidation. But the outcome is the same: housebuilders are too often locked into arrangements they have not fully tested.
Why independence really matters
True independence in utility procurement means working with an ICP that can engage with multiple IDNOs without ownership constraints. That freedom allows the market to be tested properly and enables developers to select the adopting network operator that best suits the site, technically, commercially and regionally.
This is not just about chasing the cheapest price. In many cases, the difference between schemes that stack up and those that don’t, comes down to asset values, adoption incentives and long-term commercial terms. For marginal developments in particular, these factors can materially affect viability.
When build costs are rising and sales values are under pressure, failing to explore every available option is no longer defensible.
The danger of focusing on headline cost
One of the biggest mistakes developers make is focusing solely on the lowest tendered connection price. Utilities do not end when the cables are in the ground.
Adoption standards, regional performance and timescales all matter. Where an adopting IDNO’s requirements differ from what has been installed, remedial works can be required, often late in the programme and at the developer’s cost. Delayed adoption can also hold up legal completions, impacting cash flow and increasing finance costs.
These risks are avoidable, but only if the right questions are asked early: Who is adopting the network? On what terms? And how aligned are those standards with the design being delivered?
Control, safety and programme certainty
Utilities also carry significant implications for health and safety and site productivity. Poor coordination, inconsistent documentation or unclear responsibility can disrupt other trades and introduce compliance risks.
Developers benefit most when their utility partner manages design, installation and adoption holistically, with clear accountability and consistent standards. Networks that are “right first time” reduce delays, avoid rework and keep programmes moving, something every housebuilder is fighting for in the current climate.
Independence plays a key role here. It gives developers leverage, visibility and control throughout delivery, rather than locking them into a process they cannot influence.
Time for a smarter approach
Larger national housebuilders are increasingly recognising this. Many are formalising their utility strategies through framework agreements, centralised procurement and deeper scrutiny of the relationships behind each offer.
For SMEs, the message is just as relevant. Understanding who owns whom, how adoption decisions are made, and where flexibility genuinely exists can unlock better outcomes, even on smaller schemes.
The utilities sector does not need less competition; it needs smarter engagement.
Housebuilders should not accept restricted choice as the norm. Transparency, flexibility and independence in utility procurement are not “nice to haves”, they are essential tools for protecting viability, programme certainty and long-term value.
In a market this challenging, no developer can afford to leave that value on the table.
