‘We’re the victims of short-term policy-making’: Interview with Jennie Daly

It is Jennie Daly’s view that the UK needs a proper housing strategy. For her, that means a “national land-use strategy that planning can help deliver” – a national plan by another name.

Now you might think it rather odd that the chief executive of Taylor Wimpey – the UK’s second-biggest housebuilder by turnover – is making the case for more planning, but then Daly is by no means your average listed housebuilder chief executive .

Because not only is Daly a former local authority planner – gamekeeper turned poacher, perhaps – the Derry-born executive’s appointment to her £756,000 a-year role last year also marked the first time that a woman had ever been named to the top job in a listed UK housebuilder.

Daly spoke to Building in an exclusive sit-down interview marking a year since the 53 year-old former group operations director took over from Pete Redfern at the £4.4bn turnover behemoth.

The 12 months since have seen her hold the Taylor Wimpey ship steady despite the treacherous waters caused by last autumn’s mini-Budget crisis, and fend off activist investor Elliott Advisers, which appeared ready to storm the brig.

The housebuilder achieved a record operating profit of £923m in 2022 after Daly set out a plan focusing on improving operational delivery, eschewing any grand shift in strategic direction. But, with turnover forecast to fall sharply this year, and the planning environment the “worst it has ever been”, there is no disguising the tougher conditions in which the business now finds itself.

In this, her first major interview, she lays out where she intends to take the business, where she believes the industry needs to improve, and exactly what she thinks can be done about the planning crisis. Her ideas will help to inform the work of the Building the Future Commission, which has a stream looking specifically at housing and planning issues. 

Could do better

Daly got the job last year after taking on a number of senior roles at the firm since moving over as planning director from Redrow in 2014, where she had led the firm’s strategic land business, Harrow Estates. A lively and entertaining presence outside of a half-year results call, the mother of two teenage daughters has clearly relished the return to face-to-face interaction allowed by the end of the pandemic.

But part of her drive clearly comes from being as tough on herself as she is on those around her. Asked how she feels about her first year in charge, she says in her still-strong Northern Irish accent: “Part of my personality is probably always to think we could do better, I could do better, there’s more that could be achieved. And that’s part of what drives me on in trying to improve things.

“But I think we’ve managed a very changeable external environment well.”

The more senior I become, the more important it is to be encouraging women in to the industry. I feel a level of responsibility

Is it too hackneyed to suggest that it is hard to imagine your typical male chief executive admitting to similar self-doubt? Certainly, Daly says that being the first and only female listed housebuilder chief executive is a “complicated feeling”.

While, she says she has never felt personally disadvantaged being a woman, describing the industry as a “meritocracy”, she says: “The more senior I become, I think the more important it is to be encouraging women in to the industry. I feel a level of responsibility.

“Personally I want to do well, not just on my own behalf, that I conduct myself well and that Taylor Wimpey performs well, hopefully making it a little bit easier for the next one [woman]. I wouldn’t say it bears overly heavily on me, but it’s not lost on me.”

Shortly after taking up the job on April 26 last year, Daly set out a four-pronged strategy to “drive operational excellence throughout the business” – a strategy to hone and tune the existing Taylor Wimpey engine, rather than change the motor – and one she has stuck to through all of the economic travails since. This came after Taylor Wimpey had been put under severe pressure from Elliott Advisers to make more radical changes, including the proposed appointment of an outsider, instead of Daly, to the top job. The investor’s intervention followed a public campaign alleging poor shareholder returns under Redfern’s leadership.

A year on, and the City seems to like what it has seen, with Taylor Wimpey shares up by a third in the past six months and outperforming Persimmon, Vistry, Gleeson and Bellway over the last year. Her recent decision to cut 450 jobs in a restructure of divisions suggests she does not shy away from difficult calls, either. Now, while Daly cautions that the housing market, while improving, is still “not normal”, she is confident in the business’s own performance, and says Elliott Advisers has been “very quiet” – suggesting the investor has given up agitating for change. 

Vision

While the day-to-day performance of Taylor Wimpey appears strong so far, it could be argued that it has been hard to grasp what Daley’s bigger vision is so far – beyond a drive to get the details right. The four-pronged strategy can be seen as comprising bland corporate statements (optimising land value; driving operational excellence; embedding sustainability; delivering reliable investor returns) which can largely be twisted to mean whatever Taylor Wimpey management wants them to mean at any given time.

What do you really think is – or should be – different about Taylor Wimpey? “I think we’ve got an excellent culture, a real drive to develop our people,” Daley responds.

“We’ve got a very strong purpose of building good quality homes and developing thriving communities, which I think does sit centrally in the mindset and the aspiration of the business. That is important and it can’t be underestimated.”

But wouldn’t Barratt’s David Thomas make all of the same claims? “Yeah, but I genuinely believe it,” she bats back, dryly.

Daley then makes the case for creating a business with the flexibility to respond quickly and smartly to market conditions – such as via its “agile land strategy”, which allows it to dodge the perverse outcomes sometimes created by monolithic central corporate targets. This is as close as she comes to defining Taylor Wimpey’s USP. But retaining “flexibility”, she says firmly, is very different to “vagueness” of purpose.

She says: “It’s intended. It’s about being not overly committed to one singular element so that you are operating in a negative or a disadvantaged way to your business or operations.

“Operational excellence, that nuts and bolts, is about be[ing] the best that we can be – drive the best value, the best efficiency, the best quality out of the tools that we have. And it requires focus – it requires continuing focus – to ensure that you are achieving all of those things.”

>> See also Bosses of Taylor Wimpey and Vistry are latest housebuilding figures to criticise the government 

>>  See also Steve Morgan interview: ‘It’s like the government wants to destroy the industry’

In practical terms, this perspective lies behind Taylor Wimpey being very clear about the fact it is cutting volume this year – it expects to build between 9,000 and 10,500 homes in 2023, up to a third down on 2022, in order to preserve profitability on the homes that it does sell. But don’t dare suggest the firm is prioritising margin above volume – Daly’s whole point is it’s about balance. “I’m always careful about the language”, she says, adding that the firm will build more “if there’s a market there to absorb it”.

She continues: “We talked quite a lot about aligning our build rates to sales rates, ensuring that we’re getting the best possible outcome, both margin and return. It would be wrong to interpret that as we’re holding back. What it would be right to say is that we are properly aligning to market signals and we are delivering the optimum outcome that can be delivered in the current market.”

Not happy

One area, however, where Daly admits that Taylor Wimpey’s performance has recently been sub-optimal is in customer satisfaction, despite this being one of her key target areas. The firm’s customer satisfaction score slipped down to 90% in 2022 from 92% the year before – putting the firm on the edge of losing its coveted five-star quality status.

Daly admits that it was a “challenging year”, and puts the drop in the headline eight-week satisfaction measure largely down to post-covid supply chain issues delaying the completion of schemes, which then “disappointed customers”, rather than build quality per se. She says the NHBC continues to rate Taylor Wimpey as “a leader in the volume housebuilders in terms of construction quality”, but admits there is work the company needs to do to recover.

“It was a really challenging year and we saw our score drop, and I’m not happy about that, but I can also rationalise some of the reasons running across the sector that led to it,” she says. The plan to turn this around this year includes both deeper supply chain engagement and improving communication with customers.

“Customers are ever-more demanding, and it’s important that we respond to that, and evolve to the expectation that customers have. We’re taking out some of those friction points that have culminated in a challenging year for the customers’ score.”

Repair

But Daly, who has influential positions on the boards of both the Home Builders Federation and the New Homes Quality Board, also thinks the HBF-managed survey, which benchmarks housebuilder quality, needs to evolve. While she says the survey is clear, independent and well-managed, she is worried that the headline measure in the survey – a customer’s satisfaction level eight weeks after buying the property – does not take a sufficiently long-term view.

“The survey’s been in use for a long period of time. We’re 20 years in. Could it evolve? Yes.

“We would look to the nine-month score for that longer-term customer satisfaction. The five-star [rating] is linked to the eight-week, but we look at the nine-month as a more tried and tested view of satisfaction.”

In the wake of the industry’s post-Grenfell cladding scandal, which has seen Taylor Wimpey set aside £245m to repair previously-built homes, and previous high-profile build issues at Bovis (now Vistry) and Persimmon, Daly is well aware that quality is just one area where the industry’s reputation has taken a battering. Another issue to cast the industry in a bad light in recent years has been Persimmon’s £70m bonus payout to former chief executive Jeff Fairburn. This subject came to the fore again last month with news that Vistry shareholders are pushing for a bonus on a comparable scale for its chief executive Greg Fitzgerald.

There’s a real social value in what we deliver, and I’m conscious that there is a bit of repair that we need to do in the eyes of the public

“It’s not for me to comment on another company’s rem[uneration] policy,” Daly says. “But I do feel it is important that, particularly when you look at things like cladding where there has potentially been an erosion of the reputation of the sector, we do bear in mind [that] the public’s perception – and the politician’s perception – of the industry is important.

“There’s a real social value in what we deliver, and I’m conscious that there is a bit of repair that we need to do – not just Taylor Wimpey, the whole sector – in the eyes of the public.”

And, while she says that not all criticism has been “necessarily fair”, for that repair to happen will need firms to “operate with transparency and integrity”.

Planning for change

Daly has been implementing her strategy for the business against the backdrop of a market badly damaged by the mini-Budget turmoil from last autumn, and a seemingly ever-deepening planning crisis at local authorities. A market update from Taylor Wimpey last week confirmed a gradually recovering sales picture at the housebuilder.

But, when the mini-Budget first hit, Daly says it initially looked like the global financial crisis all over again. “The final quarter of 2022 was very challenging. It was a real shock to consumer confidence. The resultant sales rates looked comparable to some of those really difficult months in 2008.

“But the reasons were very different. And the banks, past that period of shock, have remained very supportive of lending in to new homes, and we have seen an improvement as a result.”

Daly started her career as a planner at Blackpool council over 30 years ago and seems more despondent about the state of the planning system than the economic headwinds. At the firm’s March results call she described the current planning situation as the worst she could remember it in 30 years.

That was no off-the-cuff remark, she says. “I came into the planning sector in 1992. So, when I say it’s the worst I’ve ever known it, I thought very carefully before I said that. It is extremely challenging.”

Daly has a metric that quantifies quite how bad: the number of plots Taylor Wimpey has in live applications pending a decision, which she says had been a “remarkably stable” 16,500 on average between 2017 and 2021. Since then, it has spiked, and now sits at over 25,500 plots, more than 50% up, largely as a result of delays at local authorities.

Just clearing a reserved matters application, she says, used to take on average four months, where it can now take a year, with the resources to councils cut at the same time as the number of issues they are expected to manage having “exploded”.

The situation is the result, she says, of these resource shortages compounded by “short-term” tinkering with the system without fundamentally addressing the strategic questions about how and where to allocate the homes needed. This, she says, will now be made worse by the proposed national planning policy reforms – which have already seen local authorities across England pause their plan-making efforts.

The proposed reforms will, she says, “certainly make the delivery of housing much more challenging, because we’ve taken away a mandatory requirement for local leaders to properly consider housing need, and the tools to resist this”.

Two things are necessary to break the deadlock, she says: investment in resources, in order that the skills are there to make the system work, and a “clear view of the need that is driving the system” set by a “national housing strategy”. Her vision – referencing Labour’s postwar Home for Heroes plan – is that if the government sets a clear strategy from the top that prevents local authorities spending time arguing between themselves, the “friction” in the middle of the system will be cut.

We’ve become the victim of short-term policy-making for convenience. We have to think about that balance of land use for the broader needs, not just the individual

Daly has been engaging with both government ministers and the Labour party about these ideas, though if she knows how they have been received, she is certainly not saying.

And, while she won’t use the politicised term “national plan” – generally seen as a very Labour concept – it is clear that she is thinking along those lines. “Planning is at its finest when there is that strategic level of thought,” she says.

“The conversation at the moment is so dug in to the local and the micro, there is a failure to engage with the national or regional need. No one is really adding up the consequences of each fractured element of micro-decisions on a national level. And that is really what we’re missing.”

Last month Former Redrow chief executive Steve Morgan - Daly’s former boss at Harrow Estates - accused the government of seeking to destroy the housebuidling industry. Daly is naturally much more measured in her language, but is also critical. “Society has to look after the broader need – this is where we’ve become the victim of short-term policy-making for convenience,” she says. “We have to think about that balance of land use for the broader needs, not just the individual.”

The industry will hope that Daly – who seems to have taken a challenging year in her stride so far – has the same luck persuading politicians as she has investors of the merit of her ideas.