‘That’s our job’: Homes England chief on MMC investment risks

Homes England chief executive Peter Denton has defended a doomed £60m investment into failed modular builder Ilke Homes, saying it is his agency's job to take financial risks.

Speaking to Construction News after a government-commissioned review encouraged Homes England to act more ambitiously, Denton said he thought his organisation's risk management was "perfectly fine".

He said: "We made an investment in Ilke Homes in good faith, because we were doing our job, which is to intervene when the market isn't providing."

In January, a House of Lords inquiry criticised the government for "undirected and nonstrategic" investment in modern methods of construction (MMC), specifically referencing the Ilke Homes investment.

Conservative peer Lord Moylan, who chaired the inquiry, told Construction News he was "unpersuaded Homes England knew what it was doing" when investing in Ilke Homes and Urban Splash's modular building arm, which entered administration in May 2022.

But Denton said: "We were completely aware of the risk levels we were taking on. It's not that we want to lose money, but it's expected that we will lose money, because that's our job – to take risks that the market won't take.

"We lost £60m. I don't enjoy that, but we took a risk in the full knowledge that there was a risk of loss."

He added that category two MMC – offsite frame construction – was "absolutely thriving at the moment".

Overall, Denton said he felt the review, by Tony Poulter,  a non-executive director of the Department for Transport, was a "call to arms" for the agency to make more ambitious interventions in regeneration and housebuilding.

He said: "I think when Tony is talking about taking more risk, it's not an abstract call to just do riskier things.

"It's about being more confident in taking on larger-scale, big, catalytic sites, and getting them going.

"We've got to take the risk of being the first to 20 per cent of something.

"The agency is taking more risk by intervening directly in large-scale urban regeneration that will require varying material amounts of economic activity, not least construction activity."

He said that he was very excited about the thrust of the report, which he said would lead to the agency driving "very material levels of [construction] activity for very extended periods of time".

In response to a recommendation that Homes England should encourage SMEs, Denton said he felt confident in supporting small housebuilders.

He said: "We already do a lot there, but we are looking at the moment at how we can do more to support the sector."

He added that Homes England's accounts for the year, which will be filed to Parliament in July, will show that the organisation has met or outperformed all its targets, including support for SMEs.

Denton also welcomed the report's recommendation to streamline funding programmes for housebuilding that are currently run by Homes England and the Department for Levelling Up, Housing and Communities.

He said a smaller number of more flexible programmes would allow the agency to better serve individual situations.

He pointed to Homes England's latest grant package – the Brownfield, Infrastructure and Land Fund, which supports the remediation of unviable land – as demonstrating this approach.

He said: "I think Tony is saying: can we think about doing that across the whole agency?"

Original source: 'That's our job': Homes England chief on MMC investment risks | Construction News

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