Homes sweet homes

Sir Robert Kerslake

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Six months into his role as HCA chief, ex-Sheffield chief Sir Robert Kerslake has the challenge of increasing house building in the face of recession.

It was already a massive job when he agreed to take it. But, barely six months after being appointed as the first chief executive of the new Homes & Communities Agency (HCA), Sir Robert Kerslake finds himself charged with a vital role in reversing the UK's ever-deepening housing slump.

As Prime Minister Gordon Brown prepared to outline measures to tackle the housing crisis this week, LGC went to see Sir Robert.

"Looking back to when I got the job and where we are now, what is really striking is just the sheer pace of the change," he says.

Does he regret taking the job? Not a bit, he insists. "I could take it personally, but I won't, that we have had the most severe credit crunch since the Nineties," he replies, tongue planted in cheek.

He's certainly not slacking. While the UK house building industry is laying off thousands of workers, Sir Robert's diary is packed. First of all, his minders ask if we can meet at seven — am that is. Eventually, we settle on 8 o'clock in late August — when most of his counterparts are on holiday.

But Sir Robert, ex-chief executive of Hounslow LBC and Sheffield City Council, is aware of the limits of how much the new agency, even with its £2bn annual budget and planning powers, can achieve.

"The agency alone will not beat the credit crunch," says Sir Robert, who is preparing for January's launch of the new agency, which will have a £5bn annual budget. "We can help to mitigate the impact and prepare for the upturn. There are opportunities to invest resources in getting sites ready for the upturn. If you go back to the last major downturn and see what some of the more successful people were doing, they did their thinking and preparation — there are opportunities." But existing plans, which rely on uplifts in value to deliver new social housing, are often undeliverable in the current market conditions, Sir Robert suggests.

"They were ambitious in the good times. I can understand what they are trying to achieve, but I am not convinced that it is going to happen in the way they want it to. I can't see how the numbers are going to work."

However, if anyone can deliver tough messages to local government it will be Sir Robert. During just over a decade in charge of Sheffield, he built up a reputation as one of the sector's biggest hitters. Under Sir Robert, Sheffield won LGC's Council of the Year award in 2005. He was chair of the Society for Metropolitan Chief Executives, who gave him an emotional send-off at his final meeting earlier this year, reflecting the deep regard in which he was held by his peers.

Sir Robert explains how the relationship between the new agency and his erstwhile colleagues in local government will work.

"We cover a heck a lot of the ground. That gives us the capacity to talk with local authorities about the range of their housing and regeneration ambitions and between us fashion a programme of activity to enable those shared goals to be delivered. The big difference is that comprehensive approach to delivering those shared ambitions."

Sir Robert estimates that having the HCA in place could have shaved 18 months off the delivery of the project to regenerate Sheffield's grade II-listed Park Hill flats complex, in which he was closely involved.

"You could have had one conversation rather than four. You could have right-up-front identified the funding stream and committed it at the beginning."

Councils' plans will drive the HCA's investment plans, he insists. "We are not creating strategies. The authorities will already have their sense of local ambition. We will ask them what the challenges to delivering are, what their investment needs, are how can we together make this happen and how that fits with what I want to achieve my national targets," Sir Robert says.

But what will happen when the HCA's priorities clash with those of councils?

While the agency aims to accommodate councils' different needs, Sir Robert insists it won't be a soft touch. "We want the conversation to be very robust, it has to be a genuine dialogue. It's not asking them what you want to do and doing it."

"The extent to which we are engaged and invest has to be connected on whether I am delivering some of my personal targets. If we are in miles different places, that is going to impact on the extent of our investment."

"If the aggregate of local ambitions is way out of kilter with national targets, we shall have to talk to government."

One of local government's chief concerns about the HCA has been the government's decision to give it planning powers, which Sir Robert is clearly reluctant to exercise.

"I would use them only in exceptional circumstances. I say that genuinely. Coming from local government, the right place for planning powers to be in most if not every case is with local authorities."

"I would ask the question three or four times before I would be persuaded that we should use those powers."

That reluctance to sideline local planning authorities extends to where powers have already been handed over to urban development corporations (UDCs), three of which have been set up by the government to speed housing growth.

"There is a case for exploring whether even some of the existing UDCs should hold their planning powers indefinitely," he says. "It [the UDC] might have had its time and place in the Heseltine era, but we're living in a different world now."

He also takes a cautious line on one of the government's more recent innovations — the Local Housing Company (LHC) joint ventures, which the HCA will support.

"LHCs are right for some situations, but not for all. There are terrific opportunities from LHCs, but they are an intrinsically complex and high investment models. Sometimes a local housing partnership can do just as good a job and in a more straightforward way. It's horses for courses, I'm not saying that everybody could or should have a LHC," he says.

Part of the complexity stems from the LHCs' reliance on private partners. Councils say they could compensate for some of the lack of provision by house builders and associations by building themselves. But this can only work if the corporation increases its grant levels, because councils cannot borrow privately.

"I don't want to send a signal that all of the pressure on grant rates is gone, but of course we have to be realistic that the loss of some of the s106 benefits will impact on grant rates.

"So far, the corporation line suggests that they [grant rates] are holding up, but we are realistic that that may not hold going forward. We recognise that's going to be an issue and it would be foolish for us to doggedly hold on to figures when nothing is happening."

Sir Robert suggests the harsh market conditions will also have an impact on the delivery of the government's green building targets, which stipulate that homes should generate no emissions by 2016. He says there will be further discussions on the definition of a zero-carbon home. "Getting on site renewables is not easy," he says. This may mean more focus on existing stock, the chief executive adds.

"If we are committed to tackling carbon emissions, as we all know, the existing stock is where the biggest challenge lies," he says.

That is one reason why, amid the rush to increase new-build rates, Sir Robert is not going to forget the decent homes programme to bring social housing up to scratch.

On decent homes, he suggests the private finance initiative, which has delivered little so far in terms of refurbished or new homes, could have a bigger role to play. "I'm keen to promote PFI. I know that it's complex and challenging, but I think it provides an opportunity to go beyond decent homes in some places."

And with that, Sir Robert is off to continue his breakneck schedule.