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Wed August 12 2020

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Persimmon faces up to its failings

18 Dec 19 House-builder Persimmon, which made more than £1bn in profits last year, has been exposed as simply not very good at building houses.

Persimmon currently builds around 16,000 houses and apartments a year but has traditionally been a developer – a land assembler – rather than a building company. So it is good at selling houses but not very good at building them.

For example, Persimmon has a nationwide problem of missing and/or incorrectly installed cavity barriers in its timber frame properties. This is because of a poor corporate culture coupled with the lack of a group build process.

When it discovered problems with cavity barriers in October 2018, the company reacted by starting to inspect the eaves of new buildings but not around doors and windows or in party walls.

In fact, Persimmon is not much good at inspections and quality monitoring in general.

We know this because Persimmon has just published the findings of an independent review into the company’s culture and operations in a bid to improve its customer care. The review, announced in April 2019, was led by construction barrister Stephanie Barwise.

Persimmon chairman Roger Devlin said at the launch of the review: “Persimmon is committed to listening carefully and changing rapidly as we seek to improve our reputation among the key stakeholders in the business.”

The review report contains some uncomfortably reading for Persimmon but it has published it in full on its website and denied nothing.

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In short, if Persimmon aspires to be a quality builder, changes are needed, the review says.

Persimmon’s incompetent quality control meant that during the review it emerged that on one site Persimmon operatives and/or subcontractors retained to remedy any issues with cavity barriers had, on two separate visits to one property, claimed that all missing cavity barriers had been retrofitted when in fact they had not been. Persimmon’s own fire risk assessor ascertained that the relevant cavity barriers had not been retrofitted on either occasion, the report reveals.

“The cavity barrier problem is a manifestation of a lack of supervision and inspection of the way in which building work is carried out both by Persimmon’s own labour and Persimmon’s subcontractors,” it says.

The review recommended that Persimmon appoints a reputable fire engineer to ascertain the further steps Persimmon should take to fix its fire safety issues. “Although we understand the problem has to date only been identified in Persimmon’s timber frame properties, we suggest that a fire engineer should be asked to consider the different Persimmon construction types, given the severity of this problem and the intolerable risk it poses,” the report says. In response, Persimmon has appointed Arup Fire to advise how to make its future houses fire safe.

After studying the completed review report, chairman Roger Devlin said: “This is a very thorough and comprehensive review with clear conclusions and recommendations in nine key areas. The review found that Persimmon had focused on policies around inspections immediately before and after the sale of a home, rather than those governing build quality inspections. In my view, this is one of its central findings and I am encouraged that the company is already embracing the review’s recommendations in this area through significant operational investment and procedural change. Our Construction Working Group will focus on ensuring that our new policies and processes fully address this critical finding. “Persimmon has already taken positive steps in other important areas, such as being the first housebuilder to introduce a customer retention scheme, investing over £140m to date in additional work in progress and an additional £15m in annual quality and service costs. We’ve also invested in industry-leading digitalisation of existing construction and pre-completion procedures which will bring further valuable improvements.

“We have made solid progress in implementing a number of initiatives over the last year. Whilst the continuing improvement in the group’s rating in the latest HBF quarterly update is welcome independent evidence of progress made in terms of customer satisfaction, the review clearly shows that the surest route to improved customer satisfaction is through the delivery of consistent build quality and service and we acknowledge that we still have work to do. As we focus hard on the changes that we are making, I would like to take this opportunity to apologise once again to those Persimmon customers who have been affected in the past.

“This review - and the seriousness that we attach to its detailed findings - is an important moment for Persimmon as we continue to build a different business with an increased focus on our customers and wider stakeholders – becoming a business that prioritises purpose as well as profit.”

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