John Callcutt’s housebuilding review is likely to be as candid as the man himself
“The ultimate poacher turned gamekeeper” is how John Callcutt describes himself, reflecting on a year that has taken him, from a brief stewardship of English Partnerships (EP), to the launch last week of his groundbreaking housebuilding delivery review.
By any standards, it has been a hectic year for the former Crest Nicholson boss. Almost 12 months ago, it was announced that he had come out of semi retirement to fill David Higgins’ shoes at EP.
But within weeks, EP’s future was in question after the government decided to merge the organisation with the Housing Corporation. The 61 year old’s brief spell as a quango boss ended just before Christmas, when he accepted an invitation by Ruth Kelly, the communities minister, to undertake a review of the housebuilding industry.
Displaying a flash of candour unusual in a bureaucrat, he admits to “regrets” about leaving EP. “It’s a well run organisation. It was easy to slot in and I was happy to be there, “ he says. The chance to conduct a top-down review of housing delivery is the only thing that tempted him away from what he describes as a “lovely bunch of guys”.
The review is designed to give ministers a better picture of how the industry operates, he explains, so the two can work together to meet the nation’s need for 200,000 new homes every year. The review, and the government’s decision to commission a National Audit Office investigation into the industry, are seen as the latest signs that ministers are frustrated by the industry’s lack of ability to deliver.
“I’m not sure that frustration is the right way to describe it,” says Callcutt, “My review is designed to help understand how the industry works so that the government can be more effective in dealing with it.”
It is unusual for the government to conduct such a review of a private industry, but Callcutt insists that his 30 years in the business, including a decade and a half in the top job at Crest, have given him the credentials to conduct the exercise.
The industry is better managed and better financed than it has ever been
And he says that now is a good time to examine the industry, which has been in a state of flux since the Barratt and Wilson Bowden merger and the takeover of Callcutt’s old firm by Sir Tom Hunter, the private equity investor.
So, what does he think of the industry at the moment? “It is fit for purpose, in that it fulfils shareholders’ requirements. If you look at the industry in terms of its financial robustness and the way it’s run, it has transformed itself over the past 15-20 years. Without doubt, it’s better managed and better financed than it has ever been.”
Now, he says, the industry faces a fresh challenge in finding a closer alignment between the City’s interests and the high environmental standards set out in the Code for Sustainable Homes. “We should be able to be more commercially successful by providing greater quality,” he says, adding that greater concentration of ownership should be no bar to driving up standards.
He says the entry of commercial developers and registered social landlords into the housing market means competition will remain “strong and vibrant”, and even predicts that major landowners, like financial institutions, will directly develop sites rather than handing them to housebuilders.
Callcutt suggests that housebuilders could respond to this scenario by taking a leaf out of commercial developers’ books and retaining equity in schemes they develop, rather than selling up, thus securing a share of their future profits.
Given Callcutt’s track record for being independent minded, he is unlikely to baulk at laying down challenges. The question is, whether the government and industry are both ready for advice from a candid friend.
Search www.building.co.uk/archive for more on the EP and Housing Corporation merger