Pathfinder's keeper

However, those who know him also say that should one scratch the surface, Gahagan will reveal himself to be – if not quite the naked civil servant – certainly much more than a Yes, Minister mandarin.

Until the end of March, he was head of housing at the Office of the Deputy Prime Minister and the man responsible for the formation of the Communities Plan. But he is also a fully trained auctioneer, having spent his early career as an estate agent; one friend says he could "bore for England about Amersham FC"; and he is rumoured to be a fan of belly dancing – although he refuses point blank to comment on this, preserving the dignity one would expect of a man who has been to Buckingham Palace to receive a CB (Companion of the Order of the Bath).

Gahagan has just taken up a new post as chair of the South Yorkshire market renewal pathfinder after a 32-year civil service career that included the City Challenge in 1991 and the housing green paper in 2000, but he still has strong opinions on the future of his pet project. "There are three obvious challenges to the delivery of the Communities Plan," he says candidly. "First, delivering the levels of stock in the South. This will possibly be the most difficult part, as it involves such a scale and such a transformation in what we've previously done. Thames Gateway is a vast undertaking, for example.

"Second, elevating the whole housing and regeneration effort in the North, and raising the game to the subregional level rather than simply working to local authority boundaries. Third, tackling the toughest cases on the decent homes target. I think the new freedoms we've got from the Treasury will allow us to meet the target, but the last 5% will be the toughest – it always is."

Rumour has it that Prescott was so pleased with Gahagan and his team's work on the Communities Plan that he took them out for a slap-up dinner. The deputy prime minister was also in attendance at Gahagan's leaving bash early last month, at which Prescott is said to have produced a large golden medal on a ribbon, and hung it around a delighted Gahagan's neck. The inscription on the gong read "Prescott award".

The atmosphere is more formal when Housing Today meets him in his office at Eland House, the ODPM's central London headquarters, just before his move to the pathfinder. Gahagan acts the consummate civil servant, sticking to the script and deftly batting aside questions on issues where he has to toe the government line.

This is the case when he is asked why housebuilding in both the private and social sectors is so low: "I've got my own views about that but I'm not prepared to comment," is all he will say. And when asked about his old boss, disgraced former transport minister Stephen Byers, he says nothing, evidently having learned from former colleagues who were not so taciturn.

Oddly for someone who seems so well-suited to the job, Gahagan says he never intended to stay in the civil service. The son of a bank clerk father and housewife mother, he moved from a Department of the Environment position in Manchester to the London base in 1973 but says he has never really had a career plan. Rather, whenever he considered leaving the service, "something more interesting always came up".

He has been passionate about regeneration since his time in charge of it at the Department of the Environment – he was also president of global regeneration forum the International Urban Development Association from 1995 to 1999. Market renewal is another issue he has enjoyed grappling with. At the pathfinder, he intends to seek an early meeting with the regional development agency to demand more investment in jobs for the region, in order to support the body's provision of new and replacement housing.

Asked about the key challenges of the job, he reiterates the point about subregional versus local renewal. "This is what the market renewal fund does – it tackles the regeneration of whole subregions. You've got to do that in housing low demand areas, because if you tackle low demand in area A and you greatly improve it, all you do is draw people in from area B. You transmit the problem, not solve it."

It is this sort of attitude that has won Gahagan many fans over the years. Jim Coulter, chief executive of the National Housing Federation, says of him: "He is very incisive, sharp and on top of his subjects of housing and regeneration. He played an instrumental part in getting the housing market renewal fund cleared with the Treasury. So really he went out on a high."

However, one former colleague at Eland House is less certain: "He was an inspiration, but on occasions he could hark back to an old-style manager who would tell you what to do and not really listen. But paradoxically, he was really positive on many projects. He's never been a people person – he's always more focused on the project itself."

Being focused on a project will come in particularly useful in his new role. It seems he is already relishing getting his teeth into the issues: "South Yorkshire is different from many other pathfinders as it hasn't got wholesale problems of housing renewal.

"It's got severe pockets and could easily tip over the edge, so we need to adopt a more selective approach. It is the biggest pathfinder – it covers 140,000 homes in north and east Sheffield, Rotherham, Doncaster and Barnsley, of which 47,000 are at risk of low demand. So some areas are intensely urban and others are semi-rural, while some have black and minority-ethnic issues.

"It's right on the M1 and near the main East Coast railway line," Gahagan says, "but it has suffered enormously from the decline in coal mining. But South Yorkshire has already been very successful in changing its nature and we need to build on this."

After more than three decades at the ODPM in its various forms, he feels he really has made a difference to the housing world. "When I properly came into the job [of director of housing], two things struck me about it. First, policy had been added to and added to over the years and wasn't very coherent as a set of policies. Second, everyone had a bit of a hangdog expression around them. There wasn't much debate going on and there wasn't much thinking about innovation. Coming from the regeneration world, it didn't seem very lively.

"What you've now got is a lot of information, a lot of flexibility and a lot more money. It's a hugely improved debate. You can have a really good discussion on housing and regeneration anywhere you choose to go around the country, which you couldn't have had five or six years ago. People spent all their time firefighting, complaining the government wasn't giving them any money.

"They've now got the wherewithal – so it's time to deliver."