Independent report criticises Persimmon quality checks

An independent report commissioned by Persimmon after complaints from buyers about the quality of their homes has found that the company does not have group-wide build policy and criticised its approach to fire stopping.

The report, led by chair Stephanie Barwise QC, who is involved in the Grenfell Tower public inquiry, found that the lack of a group build policy increased the risk of build defects and that one manifestation of this was the lack of cavity barriers or their incorrect installation, which the report said was a “nationwide systemic problem”.

It also concluded that the housebuilder has no formal group-level procedures requiring supervision of its own employees’ or subcontractors’ work and that it was too reliant on warranty providers. “It is unrealistic to regard the warranty providers as being able to inspect all work stages or even all properties; they do not,” the report said.

Build process

And it questioned Persimmon’s pledge to inspect work at all stages of the build process, stating that it was not currently being met, although Persimmon has started the process of appointing new independent quality controllers and rolling out new training for site managers.

The report called on Persimmon to take time to formulate and embed a “Persimmon Way” of building with a comprehensive communications and training plan, as well as a group policy specifying the nature and level of supervision required. “Increased supervision will be in the long run cost effective since work will be less likely to require rectification at later stages,” it said.

Cavity barriers

When it came to the issue of cavity barriers, the report said Persimmon first discovered that it had a problem of missing or incorrectly installed cavity barriers in its timber frame properties in October 2018 and “reacted swiftly” by inspecting sites where the problem first occurred and extending them. But it added: “However, we note that the inspections to date have been limited to the eaves and have not checked for cavity barriers which should be present around doors and windows/in party walls.”

And it uncovered further problems with inspections when it found that subcontractors retained by Persimmon to remedy problems with cavity barriers on one site made two separate visits to one property and claimed that all missing cavity barriers had been retro-fitted when in fact they had not, which it warned was a “manifestation of a lack of supervision” and a clear demonstration of the disconnect between the award of stars via the Homebuilders Federation (HBF) survey and true build quality, since one of Persimmon’s five-star business "has the highest incidence of missing or incorrectly installed cavity barriers”. The report has called on Persimmon to appoint a fire engineer to identify the further steps it should take.

Company culture

Meanwhile, the report identified Persimmon’s company culture as a potential cause of quality issues, regarding itself more as a “land assembler and seller of houses than a housebuilder”. This led to Persimmon prioritising policies and procedures covering inspections immediately before and after the sale, at the expense of group policies governing the build process and quality assurance inspections, it found. It recommended that the board set out the company’s purpose and ambition in a clear statement, monitoring directors and management were fully engaged with the new ambition at least annually.

Persimmon’s response

Persimmon said it agreed with the review’s recommendation to instigate a group policy specifying how the nature and level of supervision needed to establish a “Persimmon Way” and that it had established a new construction working group to determine its new direction and a new senior construction champion role had been created.

It also “fully accepted” there had been a failing in its supervision relating to cavity barriers and that it implemented a “rigorous” customer engagement and inspection regime in 2018, with 16,000 inspections so far.

Barwise 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.

“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.”

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.”

To read the full report, click here.