I am delighted to welcome you here today to the Home Builders Federation’s policy conference: “A new agenda for home building”. Many of you will no doubt feel that our industry – the home building industry – is undergoing a period of unprecedented change. You would be forgiven for clutching the sides of your chairs as you sit down at your desks each morning, in expectation of another Government announcement, a new Departmental consultation or a further policy review.
As one member put it to me not long ago: we seem to be in a state of perpetual revolution when it comes to regulatory and policy change. It reminds me of the conversation reported to have taken place between Henry Kissinger and the Chinese Prime Minister in the 1970s.
As the two statesmen discussed events that had defined world history, Kissinger asked his guest what he thought the impact of the French Revolution had been.
The Chinese Premier apparently mused on the question for quite some time… before replying that it was perhaps too early to tell. It is precisely because we don’t want to wait over two hundred years that we are holding this conference today – to examine what is going on, assess what impact it will have on the industry, and inform you of what we are doing to represent and advance the industry’s interests.
Barker – three years on
It seems very appropriate that we are holding this conference almost three years to the day since Kate Barker published her seminal review of housing supply. As you know, in 2005 and 2006 the HBF held specific Barker conferences to discuss the Barker agenda and developments within the industry.
More recently, of course, we have had the publication of Kate Barker’s report on land-use planning which we widely supported. We have now moved on. As you know, the Secretary of State for Communities and Local Government, Ruth Kelly, announced in December that John Callcutt will be “taking on a new role, working with industry, to improve housebuilding delivery in a low carbon environment.”
I am delighted that John Callcutt, who is leading the Callcutt Review, will be speaking this morning. The HBF will be playing a significant role supporting John’s work.
The transition from Barker to Callcutt marks something of a watershed for our industry, I believe. The challenges remain significant, but they are undeniably framed around two major objectives: the twin aims of increasing supply and attaining zero-carbon performance standards, while maintaining the primacy of design and customer satisfaction.
We should not forget that, just last week, the Government released figures showing us that the rate of new household formation in England is projected to be even higher than expected, leaving a shortfall of over 60,000 homes every year up until 2026.
Customer satisfaction strategy
Let us start by looking at the Barker Agenda three years ago, and how far things have changed;
As you know, Kate Barker’s first challenge to the industry – Recommendation 32 - focused on customer satisfaction.
Last year, we produced our inaugural survey assessing levels of customer satisfaction throughout the country, undertaken jointly with our partners at the NHBC. We have done the same again this year, and I am delighted to announce the un-audited headline industry results. They show that the industry has either maintained or improved the levels of customer satisfaction achieved in 2006:
o 76 per cent of respondents state that they are satisfied with the quality of their home.
o 77 per cent - state that they would recommend their builder to a friend.
o All other areas of questioning show that service levels either remain the same or show improvement.
o For example, well over three quarters – 78 per cent – of purchasers were either very or fairly satisfied with the service they received during the buying process – a percentage point higher than in the first survey.
o And further on in the home buying process, at the lower end of the satisfaction scale, 64 per cent of purchasers were very or fairly satisfied with the service they received after moving in - a two per cent increase on the previous year’s result.
Once the data have been finalised, we look forward to sending out the final results to members. These preliminary results show that progress is being made – not least when one considers that these figures represent a full calendar year rather than the six month snapshot captured in last year’s results.
They also, of course, show room for significant improvement. That said, I know how far customer standards have been integrated into the operations of home building companies; I know how much the culture of home building companies has changed.
I am therefore confident that we will show steady progress in the years ahead. Let us not forget that this process is less about achieving precise percentage numbers, and more about driving up service standards across the industry.
That is why HBF’s customer satisfaction strategy has also included the launch of a Customer Service Code of Conduct last year and a set of model contract terms, drawn up in consultation with the OFT.
It all represents a strong start. With these solid foundations, and with these tools in place, we now need to forge stronger progress – achieving better service levels and attaining higher levels of customer satisfaction. We must ensure that our continued commitment to raise standards deals conclusively with any residual concerns that may exist about our industry and its attitude to customers.
Modern methods of construction
As you know, Kate Barker also asked the industry to develop a strategy to address barriers to modern methods of construction in Recommendation 33 of her report.
HBF soon set up a cross-industry Steering Group to develop exactly that strategy. Reporting in February 2006, the Group proposed the establishment of a ‘legacy body’ to implement its recommendations.
I am delighted to announce today that the HBF - in association with the National Centre for Excellence in Housing - has formed the Housing Production Barriers Group.
For those who don’t know, the National Centre for Excellence in Housing was set up last December by the NHBC and the BRE. Under the experienced chairmanship of Rod MacEachrane, our Housing Production Barriers Group will train its sights beyond modern methods of construction, focusing on the production barriers to building at least 200,000 high quality, zero-carbon homes a year by 2016, and how to lower or remove those barriers.
In so doing, the cross-industry group will dove-tail its work with John Callcutt’s Review Group and also feed into the Task Force I am co-chairing with Housing Minister, Yvette Cooper, on the zero-carbon homes agenda.
Skills and design
Kate Barker also, of course, posed challenges on skills and design - recommendations 34 and 35 of her report.
As we announced last year, the HBF commissioned a major academic study of the skills implications of significantly raising housing output and we developed an industry skills strategy – Skills for Homes. Under the strategy, we are promoting the Qualified Workforce Initiative, are working to improve the structure of qualifications for residential site management, and have been in consultation with CITB to help develop new forms of apprenticeship to increase the number of apprentices entering the industry.
On design, we are continuing to promote good practice both through the Building for Life initiative and the new partnership with the Prince’s Foundation for the Built Environment.
Just last month, eleven new house building developments were personally commended by the Prince of Wales for their contribution to quality of life through design excellence.
The schemes will be the benchmark for creating an industry-wide programme of design education to be delivered by the HBF.
As I have said repeatedly before, we are fully committed to playing our part in the process… but let us not forget that it is a process; one that brings together a number of different stakeholders – not least local authorities and the Highways Agency.
In my view, design is too often dictated by compromises within the planning process rather than the singular pursuit of excellence. We need a concerted and co-ordinated approach in which design is accorded the status it deserves.
Beyond Barker
Three years on, we can see that the Barker Review laid the foundations for a raft of new policy approaches, and a new approach to policy thinking.
Kate Barker posed a number of specific challenges to the industry, and I believe that we have successfully taken them on.
Those challenges, of course, remain, and we will continue to build on our successes to date.
My central message today, however, is that as the policy agenda moves forward – encapsulating different issues and posing fresh challenges - there has been a silent but undeniable evolution in the way the HBF operates and the way the industry is perceived.
We are no longer simply reacting to political developments and expectations; we are actually leading the agenda.
When I addressed our Barker conference a year ago - having recently taken on the role of HBF’s Executive Chairman – I was at pains to stress two particular points:
The first was that we wanted not just to be heard in Whitehall and Westminster, but more crucially: to be listened to
I stated that we could best represent our industry and our members by having a place at the table, not by standing outside the room shouting.
The second was that the HBF represented a unique repository of information and knowledge, while also serving as a conduit to the finest industry expertise and talent.
I said that we wanted to inform and shape policy by using those advantages, by serving as a think tank that can propose policy solutions as readily as it can highlight policy problems.
Above all, we want to be consulted at the earliest possible stage – precisely because that is the optimum point at which we can influence policy.
The dividend
The Chancellor’s proposal to build all new homes to zero-carbon standards by 2016 serves as a useful and highly prescient example.
As you know, we had a choice in how to respond to the evolving environmental agenda: to turn away, muttering darkly all change is futile… or to approach the Government, putting forward our own positive and business-friendly ideas to shape a more effective policy and regulatory framework within which to increase housing output and build homes to higher environmental standards.
I don’t need to remind you of which route we took.
By ensuring we had a seat at the table when it came to policy formation, we were able to persuade CLG of the merits of resisting pressure for the unrealistically short timeframe proposed by many lobbying groups
By retaining a seat at the table when it comes to policy delivery - not least through the 2016 Task Force - we are in a position to exert maximum influence.
We are, for example, able to tell CLG candidly that a multiplicity of different performance targets promoted by different regions and local authorities simply will not allow the industry to achieve its twin objectives of higher output and higher standards.
We are, of course, only at the beginning of the journey, but I do believe that our enhanced relationship with the Government, the Opposition and other stakeholders in the policy community allows us to more effectively fight the industry corner and be taken seriously when we raise points of practical concern.
Zero-carbon challenge
Let me briefly just mention two important points on the zero-carbon challenge that are of central importance from a member perspective.
Some people have suggested that the zero-carbon objective constitutes an agenda for the major players. Smaller home builders, it is has been suggested, will somehow lose out.
I profoundly disagree.
We know that the key obstacles to achieving the Government’s objective centre on capacity and volume - which is why we fought and continue to fight for a sensible timeframe.
For smaller developers that want to take advantage of the changing market and take a lead, they have the ability to move faster and innovate quicker.
For those that do not want to move as rapidly, they have the reassurance of knowing that the larger players have little choice but to invest in new technology and find solutions.
The whole industry, of course, will benefit from the totality of their knowledge.
When Part E of the Building Regulations was introduced, for example, some of the largest home builders contributed funding to find an alternative solution to mandatory sound testing.
I have absolutely no doubt that every home builder in the country could have benefited as a result.
Others have suggested that the homes of the future will have to look so radically different to the homes of today that we will all be complicit in the aesthetic creation of a new Planet Zog.
Again, I disagree.
Let us not forget that the homes our forbears built a hundred years ago were six times less energy efficient than the homes of today. Achieving zero-carbon performance standards will require less of an advance that achieved to date.
I certainly do not know what the homes of 2016 will look like, but there is no reason to suppose that they will look radically different.
As we have said all along, it is critical consumers remain on this journey with us.
Conclusion
Tomorrow is, of course, Budget Day, and I know we will be keenly anticipating the Chancellor’s announcements.
Don’t forget that over the road, just a few feet away from us, the Chancellor’s speech-writing team will be furiously scribbling the latest draft of his Budget speech.
Their time, some might suggest, would perhaps be better spent sitting in on today’s session on the proposed Planning-gain Supplement.
As you know, after a year of exhaustive consultation, commissioned research and member deliberation, we have come out against it. We have made our views well known and, I am told, they have been noted at the most senior levels of the Treasury.
I have absolutely no idea what the Chancellor has planned on this, but it is certainly not too late to judiciously apply the red pen.
It leaves me with little more to do than to thank you for listening, and to state that I hope you have a very enjoyable – and informative – day with us today.
Together we can help the industry lead the debate rather than trailing in the wake of others.