Persimmon review lays bare culture of ‘poor workmanship’ and ‘potentially unsafe’ homes

An independent review into the effectiveness of customer care measures and processes at Persimmon has revealed issues with fire prevention measures and “poor workmanship” on its properties.

Persimmon review lays bare culture of ‘poor workmanship’ and ‘potentially unsafe’ homes

The UK’s second-largest housebuilder launched the review in April after it came under scrutiny over the quality of its work and an executive pay scandal.

The review, which was chaired by Stephanie Barwise, QC of commercial law firm Atkin Chambers, concluded that the firm’s corporate culture results in “poor workmanship” and “potentially unsafe” homes.

The findings, published in full on Persimmon’s website, cover nine key areas:

  1. Corporate Culture
  2. Structure of Persimmon
  3. Build Process
  4. Cavity Barriers
  5. Customer Service
  6. Human Resources and Employment Related Issues
  7. IT Systems and Infrastructure
  8. Board Effectiveness
  9. Remuneration

Among other things, it identified problems with cavity barriers – pieces of fire-stopping material that are fitted within building cavities in order to prevent the spread of fire.

It concluded that Persimmon has a “systemic nationwide problem” with missing and/or incorrectly installed cavity barriers in its timber frame properties.

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.

“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,” the report said.

Looking at the company’s corporate culture, the review said that if its board wants it to be “a builder of quality homes, meeting all relevant build and safety standards”, then it should reconsider Persimmon’s “purpose and ambition”.

The report concluded: “Persimmon’s culture must change: many of Persimmon’s employees, customers and stakeholders wish Persimmon to change, and in a changing regulatory environment, Persimmon cannot afford the stigma of a corporate culture which results in poor workmanship and a potentially unsafe product.”

Persimmon said it has recently begun to take urgent action to improve its build quality procedures through the introduction of independent quality inspectors and through the establishment of a Construction Working Group, comprising senior experienced construction professionals from across the company. The primary purpose of the Construction Working Group is to establish consistent, structured construction and quality processes.

The board intends that these will form the basis of group-wide standards, the “Persimmon Way” of building, which will be formalised and rolled out over the next year.

Roger Devlin, chairman of Persimmon, 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.”

Stephanie Barwise QC of Atkin Chambers and the leader of the review added: “The board of Persimmon deserve significant credit for commissioning this Review and publishing its findings. It demonstrates their willingness to confront some difficult truths as they focus the business on rapid change and improvement.

“The Independent Review Team has sought to be as thorough as possible in its consultation and review and I believe that we have given the Board a very honest assessment of the issues Persimmon needs to address. It is encouraging that during the period of Review as we shared initial findings that the company began to take various steps to respond to certain issues.

“I am grateful to the members of the Review Team for their work and expertise in delivering this report and would like to thank all those who participated in the extensive consultation.”

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