On 5 April 2019 the Board of Persimmon plc, led by Roger Devlin (Chairman), announced the commissioning of an independent review of Persimmon in order to assess the effectiveness of measures and processes instigated as part of its focus on rapid change and improvement of its customer care culture and operations, and on eliminating cases of poor workmanship. The purpose of the review, led by Stephanie Barwise QC of Atkin Chambers, was to assess the effectiveness of the new measures and to determine whether they went far enough and fast enough for the benefit of both customers and wider stakeholders in the business.
The review is now complete and has been delivered to the Board. In line with the undertaking given at the announcement of the review, the findings of the report are now being made public.
The findings cover nine key areas:
- Corporate Culture
- Structure of Persimmon
- Build Process
- Cavity Barriers
- Customer Service
- Human Resources and Employment Related Issues
- IT Systems and Infrastructure
- Board Effectiveness
- Remuneration
The full conclusions and recommendations from each section, together with Persimmon’s detailed responses, description of activity already initiated and comment on further planned actions, have been published on Persimmon’s website.
Persimmon has in parallel 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 precompletion 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 said: “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.”
FIS CEO Iain McIlwee said: “This really is a unique moment of honesty and clarity that again gives us some reassurance that the industry is changing for the better. There are some hard ground truths that cannot be ignored, not least the difference between optimising the value of land versus building quality homes and clear failings in the overall supervision and inspection regime. Are we surprised, no, but I am grateful to Persimmons for publishing and am sure that others in the wider sector will find points that resonate. As we turn a page on another decade of construction, we must recognise that the past ten years has not been our finest as a sector, but we must start to look forward and continue to work as a supply chain to improve the culture and deliver better results for our customers, our people and for the future of our economy.”
The full report can be viewed here: https://www.persimmonhomes.com/corporate/media/397416/findings-of-the-independent-review.pdf
