Standards need improving, house-builder has admitted
A house-builder has been praised for promising to address failings in its construction techniques and customer service.
The Chronicle has in recent years reported on a number of complaints from the buyers of new-builds from various companies, and now Persimmon Homes has admitted its standards need improving. According to its website, Persimmon, which made more than £1bn in profits last year, currently has homes for sale in Alsager, Middlewich, Sandbach, Biddulph and Congleton.
Following negative reaction to the salary paid to its chief executive Jeff Fairburn, Britain’s second-largest housebuilder Persimmon, led by chairman Roger Devlin, commissioned an independent review to assess its customer care culture and operations, in an attempt to address poor workmanship.
The review, led by Stephanie Barwise QC, was to assess the effectiveness of the steps the company had introduced to measure performance and to determine whether they benefitted customers and stakeholders in the business.
The report highlighted an absence of systems to inspect work in progress and a “nationwide problem” of missing or incorrectly installed cavity barriers in timber frame properties, which help prevent the spread of fire.
Persimmon, the report concluded, had “traditionally been more a land assembler and house-seller rather than a housebuilder”.
If the board wanted the company to be “a builder of quality homes” then it “should reconsider Persimmon’s purpose and ambition,” the report said.
It also highlighted the failings of the Home Builders Federation star rating, which assesses houses only at the point of sale and “true quality and safety of the build”.
If the company wanted to build quality houses, the star rating was not a good enough guide, the report said.
Mr Devlin commented: “This is a very thorough and comprehensive review with clear conclusions and recommendations in nine key areas.
“The review found that Persimmon had focused on policies around inspections immediately before and after the sale of a home, rather than those governing build quality inspections.
“In my view, this is one of its central findings and I am encouraged that the company is already embracing the review’s recommendations in this area through significant operational investment and procedural change.
“Our construction working group will focus on ensuring that our new policies and processes fully address this critical finding.”
He added: “Persimmon has already taken positive steps in other important areas, such as being the first housebuilder to introduce a customer retention scheme, investing over £140m to date in additional work in progress and an additional £15m in annual quality and service costs.
“We’ve also invested in industry-leading digitalisation of existing construction and pre-completion procedures, which will bring further valuable improvements.”
Ms Barwise said: “The board of Persimmon deserves significant credit for commissioning this review and publishing its findings. It demonstrates its willingness to confront some difficult truths as it focussed the business on rapid change and improvement.
“The independent review team has sought to be as thorough as possible in its consultation and review and I believe that we have given the board a very honest assessment of the issues Persimmon needs to address.
“It is encouraging that during the period of review as we shared initial findings that the company began to take various steps to respond to certain issues.”
The review found that the problem Persimmon had encountered with fitted cavity barriers was a “systemic” and nationwide problem, and “a manifestation of poor culture” coupled with the lack of a rigorous regime of controlled build, based on clear drawings and specifications, supported by supervision and inspection.
Said the report: “If the board wishes Persimmon to be a builder of quality homes, meeting all relevant build and safety standards, then it should re-consider Persimmon’s purpose and ambition. Persimmon has traditionally been more a land assembler and house-seller rather than a housebuilder.
“As explained, the Home Builders Federation star rating is a measure of quality as perceived by the customer shortly after completion, rather than a measure of the true quality and safety of the build.
“If Persimmon does want to be, and be known as, a builder of quality homes (this will) require changes in the culture of the business.”
The report said Persimmon has already begun to take some positive steps, such as being the first housebuilder to introduce a retention scheme — legally binding agreement where new build homebuyers retain a set percentage of the cost of their house until faults are fixed — and making changes to its systems and processes.
The report said Persimmon had prioritised procedures around the sale of houses at the expense of policies governing the build process and quality assurance.
It said that genuine customer care started with the quality of the build, beginning much earlier in the process than the company’s existing standard. It said customer care should start from the geotechnical investigation of a site It said the pre-completion procedure had become a “mere box ticking exercise”, stemming from a belief that any single stage was not important, as another check or inspection would follow.
“Persimmon’s culture must change: many of Persimmon’s employees, customers and stakeholders wish Persimmon to change,” it said.
“Persimmon cannot afford the stigma of a corporate culture which results in poor workmanship and a potentially unsafe product,” said the report.
It also said that while certain functions should be managed at a local level with little group control, group level policies should govern the build process, including supervision and inspection.
The report said the company should take the time to formulate a “Persimmon Way” of building, and permeated through the company.
“It is important that Persimmon prioritises the build process and rebalances the focus of attention to put more emphasis on a robust group build policy”.
The issue of missing or incorrectly installed cavity barriers in timber frame properties was discovered October 2018.
Persimmon reacted swiftly by inspecting sites where the problem first occurred, and then extending its inspections beyond this. The report said inspections to date had been limited to the eaves, and not cavity barriers around doors and windows and party walls.
The review also discovered that on one site Persimmon staff and subcontractors had, on two separate visits to one property, claimed that all missing cavity barriers had been retro-fitted when in fact they had not been.
“The cavity barrier problem is a manifestation of a lack of supervision and inspection of the way in which building work is carried out.”
The report said a reputable fire engineer should be appointed, and said this failure highlighted the disconnect between the award of stars via the Home Builders Federation survey and true build quality, since one of Persimmon’s five star businesses had the highest incidence of missing or incorrectly installed cavity barriers.
Persimmon keeps its customers advised of the likely legal completion date, a system triggered by completion of various stages of the building structure. “This process works well,” said the report, but it said the process should be digitised and simplified.
“The danger in having so many stages in the pre-completion procedure, which has historically not always been followed, is that it tends to encourage a box ticking culture, rather than a deep engagement with ensuring that the property is properly checked and finished to an appropriate standard.
“The post-completion procedure is focussed on the obtaining of stars via the HBF survey.”
The report also recommended centrally managed training, saying training was “inconsistent” and largely focussed on sales staff.
Persimmon had not conducted employee engagement surveys, and not had reliable means of capturing the views of its employees.
It now plans to roll out an employee engagement survey in January, with the results being reported in its 2019 annual report.
The report recommended mandatory training for all such employees within 12 to 18 months.
Persimmon should also conduct detailed checks on its sub-contractors and subcontracted labour and work with warranty providers and industry bodies to ensure that key tradesmen working on Persimmon sites were appropriately skilled.
The Persimmon board said it would consider carefully the review’s recommendation for greater clarity on Persimmon’s purpose and ambition and accepted that this would be the “cornerstone of the required cultural change”.
Its new strategy will include a range of tangible and, in some cases, industry leading initiatives to achieve a sustainable balance between pace of delivery of new homes and their quality.
It agreed with the recommendation that the build process should be centrally governed — and the suggestion of a “Persimmon Way” of building — and is already taking steps to achieve this.
Mandatory training will be provided by the group-training department to all relevant employees with updates when required to reflect changes to best practice and regulation.The company has appointed 31 independent quality inspectors to assess each key stage in the construction process across all Persimmon’s developments applying a “check the checker” principle and compliance with the “Persimmon Way”.
As for the fitted cavity barriers, the board said all properties that failed an inspection would continue to be immediately remedied.
The board said the new retention scheme and new post-completion seven day inspection form introduced additional consumer protections and were “a clear message” to all employees of the importance of delivering a high quality new home to all customers.
The board also agreed that aspiring to be four or five-star builder did not necessarily mean that a home would be constructed to the highest level of quality.