What exit of ‘the Peters’ means for the future of Homes England

It is not hard to imagine what Oscar Wilde’s fearsome creation Lady Bracknell would have made of the plight of Homes England over the past week, as the housing agency saw both its chair and chief executive stand down. To lose one parent can be regarded as unfortunate, the fictional matriarch famously opined, but to lose two “looks like carelessness”.

Given that the announcement leaves the agency without long-term leadership just as the government is embarking on its drive to build 1.5m homes, one could certainly see losing both chair Peter Freeman and chief executive Peter Denton as somewhat careless. However, many in the sector feel the departures are designed to send a strong message that the government wants to see radical change in the agency itself.

The question is, what would prompt the government to take such a potentially destabilising measure? And, further, will it be able to secure replacement appointments quickly enough to drive through the changes it wants while maintaining momentum?

Unusual

The announcement came after Peter Freeman had been re-appointed to his role by ministers just last year for a further two years, and chief executive Peter Denton, appointed originally in summer 2021, had given no previous indication of a desire to stand down.

No reason was given when announcing Freeman’s departure, albeit the fact that he will work until a successor is appointed late next year actually means the Ministry of Housing Communities and Local Government (MHCLG) will simply not re-appoint him when his current term expires next October.

Peter Denton, in contrast, will leave in the new year, and is to be replaced in the interim by the vastly experienced Eamonn Boylan, currently interim chief executive of the Greater Manchester Combined Authority – and formerly deputy CEO of Homes England when it was created by Labour in 2008 as the Homes and Communities Agency.

Denton said in the statement announcing his departure that he had decided to leave as the ministry’s plans would “require a leadership team with a time horizon extending beyond the period I had originally set for myself”.

Whatever the actual reason for the departures, announcing both Freeman’s and Denton’s exits at the same time was certainly unusual. Many in the sector view this as a deliberate government decision intended to send a signal – despite the likely downsides in terms of senior leadership distraction during a key period. But still the question: why?

Under delivery

Homes England has without doubt faced a brutally difficult past few years, with its work significantly hamstrung by crises including the pandemic and the post mini-Budget market shock. On top of that, government policy dither has forced it into two significant direction changes in the past eight years, and made it cancel programmes such as Help to Buy, which it had been administering with some success.

But, even accepting all that, the harsh reality is that Homes England is seen to be underdelivering. Its executive leadership team largely consists of people who don’t come from a housing sector background, who are more well-versed in managing the loans and financial instruments that the agency has become increasingly involved in (three of the past five chief executives have been bankers by background).

>> See also: ‘Good, but not perfect’ – What next for Homes England? 

The delivery of the £11.5bn Affordable Homes Programme (AHP) – what one might consider its key role – is, meanwhile, not going well. Labour deputy leader Angela Rayner recently said that as few as 110,000 homes might be produced from the 2021-26 AHP – nearly 40% short of the 180,000 target.

On another programme administered by Homes England, the Housing Infrastructure Fund, the body has managed to spend less than a third of the £4.2bn allocated to it, with work begun on fewer than a tenth of the expected 340,000 homes.

As last years’ public bodies review of the agency noted, Homes England has “materially under-delivered and/or under-spent against targets” since 2021, though it put this down largely – not entirely – to external factors. It also has a series of failed investments that it has had to write off in modular housebuilding firms such as Ilke and Urban Splash House.

Meanwhile it has spent £71m in the past four years on an internal restructuring programme, and seen a number of senior experienced staff leave – the recent public bodies review found staff turnover at 19%. A further £16m has been spent since 2019 with the Boston Consulting Group.

Own goals

Aside from the difficult external factors, many in the sector put this poor delivery down to a number of unnecessary own goals. There is first of all an uneasiness about how the understandable focus on the newer, largely financially-focused tasks given to it – of overseeing loans to consumers and developers – appear to outsiders to have resulted in a loss of focus on the core affordable housebuilding and land development functions of the agency.

But, in addition, there is a view that the post-2016 restructure of the agency – which created Homes England from the HCA – was counterproductive in largely removing the original regional structure which had made it successful.

Since 2016, decision-making has been far more centralised, meaning local authorities and other partners seem to have no longer seen Homes England as a servant able to enable change on the ground by using its tools and funding to solve their local problems. Rather, the agency has acted top down to strike larger deals from the centre with housebuilders, registered providers or financial institutions, hoping that these will filter through to delivery on the ground.

Even in the very measured language of the public bodies review, a critique of this comes through loud and clear. “Homes England needs to change the way it operates in order to partner effectively with local authorities and respond well to government’s place priorities,” it found.

The agency has already been heading back in this “localist” direction since it was once again re-purposed in 2022.

>> Also read: ‘The figures on starts are terrifying’. What’s really happening to the Affordable Homes Programme 

But it is clear from the letter written by housing minister Matthew Pennycook to Freeman just over a month ago that he wants change to go further, and faster. While he set the agency a number of short-term goals to increase output and support the new towns projects, he also made clear he expected the agency itself to reform.

Firstly, by reforming the board, but also by bolder partnership working. “I encourage you to empower the agency’s regional offices to work closely with mayors and other local leaders,” Pennycook said, hinting that regional offices could get the kind of decision-making autonomy they originally enjoyed when the HCA was set up.

From the evidence, Denton and Freeman had already been taking the agency in broadly this direction. It is possible that they have paid the price for not having done more, or more quickly.

All of which begs the question of to whom the government will now turn for the crucial roles in taking the agency forward. The appointment of Boylan as an interim chief executive is warmly welcomed by many – he is seen as having exactly the right experience, and is known as hugely competent and well-respected.

However, Boylan, who served for a decade as deputy to the legendary Howard Bernstein in Manchester, has already been at the top tier of local government for many years and is seen as likely to need a lot of persuading to take on another major permanent full-time role.

Having sent such a strong message to the sector about wanting reform, ministers will know that getting the appointments right – and in place quickly – will be key to getting the change that they want.

Joey Gardiner is contributing editor at Housing Today and Building