The sheer get-up-and-go of the head of the ODPM’s sustainable communities group is proving increasingly valuable – particularly in easing the ‘creative tension’ between government and housebuilders. We got him to sit still for a minute.
Richard McCarthy must be a morning person. It is 9am and here he is, listing at breakneck speed all the good things the ODPM is doing. He becomes even more animated when he moves on to the money flowing out of the ODPM. “We’ve hit our spending targets. We’ve been spending our money,” he repeats with delight, sounding more like a pools winner than a sober civil servant.
McCarthy is not praising profligacy; his point is that spending shows things are happening, that the sustainable communities group, of which McCarthy is director general, is carrying out the ODPM’s agenda of improved housing delivery. Since McCarthy walked through the door of Eland House to head up the ODPM group 10-and-a-half months ago, he has scored some notable successes. A network of urban regeneration companies is in place and funding has been finalised for eight of the nine housing renewal pathfinders. He has also been involved in a regeneration plan for the north of England announced this week by his boss John Prescott. Less tangibly, McCarthy says there is a now a greater understanding of the sustainable communities idea, a greater sense of collaboration and engagement, and more focus on outcomes.
Achieving this in less than a year has taken a lot of energy, not least because he has had to tread a delicate path between the competing demands of the public sector and the housebuilding industry. Along the way, his role has increased, as the departure in April of Genie Turton – the ODPM’s director general for housing, planning and homelessness – brought the Housing Corporation into McCarthy’s remit. He now has five directorates under his control, covering everything from the Building Regulations to housing growth areas, where 200,000 extra homes are destined to be built by 2016. The sustainable communities plan will invest £38bn in communities up to 2008.
It is a massive job, but McCarthy looks relaxed as he stretches out on the pristine beige sofa in his office – which, he can’t resist pointing out, was not newly acquired on his arrival, but re-covered. It is, in effect, a sustainable sofa. The comment may be jokey, but it demonstrates how he has adapted to the political environment. A former colleague once said that McCarthy might have made good politician, and he appears comfortable in his surroundings. In looks, he could be Tony Blair’s younger brother, and like his ultimate boss, McCarthy has a friendly manner and talks with a persuasive enthusiasm.
But behind the soft approach lies a strong determination which is focused on doing more than delivering homes. “We want better homes in terms of quality and design,” says McCarthy. “We’d like to see more housebuilders moving beyond the minimum standards of the Building Regulations on environmental performance. We’d like to see homes built more quickly. We’d like to see greater use of modern methods of construction.”
Modern methods of construction again. It was only a week earlier that McCarthy’s boss John Prescott urged housebuilders to embrace manufacturing technology in order to increase output. “There has been greater innovation in commercial building,” says McCarthy, taking up the theme. “The innovation in housing has been patchy, and much of that has been led by the housing association sector. It is as if the industry has been in an extended phase of research and development.”
Our message to housebuilders is that we're prepared to listen, but anecdotal evidence isn't enough
The ODPM is not promoting MMC purely to get homes built faster – it sees it as a route to greater efficiency, cutting build costs without sacrificing quality. Its own research indicates costs in housing have risen by almost three times the rate of inflation since 1997, which concerns McCarthy and his boss. “The cost of building and acquiring and living in homes is a frustration of John Prescott’s,” he says.
The housebuilding industry’s biggest frustration, though, is not build costs but planning. Peter Johnson, chief executive of George Wimpey, is the most recent of many housebuilders to cite the planning system as the real obstacle to raising output. McCarthy replies that the department is not complacent and is listening to what the industry is saying. “Our message to housebuilders is that we’re prepared to listen, but anecdotal evidence isn’t enough. You have to be creative in giving us solutions. We’re working hard to make planning work,” he says.
McCarthy is pragmatic enough to accept that there will always be a degree of “creative tension” in the relationship between government and the housebuilding industry, but he says that the increasing power given to English Partnerships to market public land has not further impaired that relationship. “We’re looking to see how we can get the maximum benefit from public land, so when land goes out to the market we’ll have worked the asset much harder,” he says. “Housebuilders may say ‘drat, we’d like to have done it’, but they respect what we’re doing.”
When it comes to communicating with the industry, it helps that McCarthy has been there, done it, and even bears the battle scars as former head of the Peabody Trust, a housing association that struggled to make MMC work. He can talk practically about problems like planning, but says he is equally capable of taking a step back and showing where the barriers really are. He has the industry’s respect, according to one acquaintance: “When he speaks at events people stop, listen, and take it on board.”
The industry has plenty of opportunity to hear what McCarthy has to say as he is a regular speaker at conferences. Most civil servants don’t appear on conference platforms and few give interviews. McCarthy does both – but because he is a civil servant the ODPM press office decrees that personal questions are strictly off-limits to journalists. When asked what the move into the political arena has been like, McCarthy parries the question, saying simply: “I’ve enjoyed the move.”
He may have adopted the politician’s panache for sidestepping questions but McCarthy has not turned into a grey-suited, cynical Sir Humphrey Appleby. He has far too much enthusiasm for that.
It's little wonder that Richard McCarthy is regularly seen running into John Prescott's office. The following is McCarthy's vast empire of responsibilities:
- Planning. This month the ODPM announced plans to merge Regional Housing Boards and Regional Planning Bodies to create a more co-ordinated approach to delivering regional growth strategies. McCarthy has also led the department's revision of planning policy guidance.
- Urban policy. This has included updating legislation on Urban Regeneration Companies. Previously they were seen as undemocratic and inflexible, but moves have included greater involvement by elected councils.
- The £38bn Sustainable Communities Plan, encompassing three housing growth areas (Milton Keynes–South Midlands, Ashford, and London–Stansted–Cambridge–Peterborough) and the housing market renewal pathfinders in the North. This directorate also includes the Housing Corporation.
- Thames Gateway. Because of the scale of the Gateway, this is handled separately to the other growth areas. The government wants to build 120,000 homes to the east of London. This remit includes Building Regulations.
- Housing, which covers local authority housing and overall policy across the sector. One of McCarthy's responsibilities is to deliver the government's Decent Homes standard by 2010.