Interview: Peter Housden

With a brief that covers housing, regeneration, the English regions and community development, the Communities and Local Government department has – along with the Treasury, the Department of Work & Pensions (DWP) and the business department – found itself right at the sharp end of this very sharp recession. And CLG permanent secretary Peter Housden (pictured above) argues that, had it not been for his department’s work, the downturn would have been much more painful for both property markets and homeowners.

“In the response to the economic crisis, we moved more of our resources than any other [spending] department,” he says. “£1.5bn of our housing money was refocused into the stimulus, and into a completely new policy area: preventing repossessions.”

Working with the DWP, the business department and the Ministry of Justice, CLG intervened to support homeowners at risk of eviction. “If you look at the rate of repossessions in the 1990s [recession] compared to what we’re experiencing now, government policy has been significantly more effective this time,” Housden comments. “Yes, interest rates were higher then, but the key thing has been finding ways to get lender forbearance. In the ’90s there was no coordinated approach to all this; this time, the schemes that we’ve had underpinning this work have created a different climate around repossessions.”

As a whole, Housden says, the economic stimulus has “clearly had the effect of holding the fall in house prices. Householders should be grateful to the government for that.” But he’s under no illusions about CLG’s ability to prop up the housing market: “Where we go from here depends on a wide range of variables: employment, confidence, the availability of credit,” he says, noting that three quarters of bank lending goes into mortgages. CLG can do its bit, but ultimately the housing market’s fate is tied to that of the wider economy.

Good tools at a bad time
At least, Housden believes, the CLG now has the right tools for the job. Merging funder and regulator the Housing Corporation and regeneration agency English Partnerships into the Homes and Communities Agency (HCA) has provided councils with far more strategic, coordinated assistance – particularly important at a time when developers and funders are reassessing many regeneration schemes, while council receipts from planning gain agreements are in decline. “Creating that body – which we got up and running six months early – and the sheer competence of the outfit, have been critically important in the response to the recession,” Housden says.

However, the HCA has also suffered badly during the recession, with its income from land sales going into freefall; a recent select committee report raised concerns over the implications for CLG finances. “Quite a chunk of their budget was driven by capital receipts,” Housden comments; “That’s certainly slowed up.” Asked whether the cash-strapped HCA is currently missing an opportunity to buy up redevelopment land while prices are on the floor, he’s diplomatic: “The important thing is that the government’s priority was about building houses and stimulating the housing market, and that’s where we concentrated our resources,” he says. And he gets still more diplomatic when asked whether the department’s exposure to the property market should lead the Treasury to cut it some slack. “I’m sure the Treasury will be as benign and helpful to this department as they always are,” he says, with a broad grin.

The select committee report also criticised the rate at which CLG staff move between jobs within the department: the average tenure in a post is just nine months. But Housden says this too is a consequence of the recession: “As we’ve responded to the downturn, we’ve moved people about more quickly than we have in previous years,” he says. “There’s a huge amount of policy activity that requires the creation of new teams; that’s the big driver. This isn’t just about people following their own career development paths – it’s about a responsive department.” (See also news section.)

IT projects under fire
Another issue worrying the select committee is CLG’s fire control programme, a major IT and infrastructure project designed to replace England’s 46 fire and rescue command centres with a linked network of nine regional hubs. The existing system has “no interoperability, no resilience”, says Housden – but the select committee is critical of delays in the replacement programme, which have left the new control centres empty while fire departments struggle to maintain their ageing systems.

The supplier “has had a difficulty with one of their major subcontractors, which they’ve now resolved, and we’re moving forward strongly on this,” says Housden. “I’m confident that we’re going to get there at a reasonable price and in a reasonable time.” And he firmly rejects the idea that the civil service manages major IT projects less effectively than private businesses: he’s commissioned a consultancy to look into whether “there are problems in these projects that are particular to central government,” he says, “and they said: ‘Emphatically not. This is just what happens when the private sector procures; it’s endemic in large-scale procurement and contract management’. So I reject the notion that there’s a particular incapacity or mindset problem inside central government.”

Raising yet another of the select committee’s concerns, I ask how CLG is attempting to become a ‘big hitter’ in government – and Housden points to the department’s key role in managing relationships between the centre and local authorities. The new system of Local Area Agreements is a “much more disciplined, focused, professional arrangement” than the previous “ragbag of performance regimes”, he says. And then there’s Total Place.

This pilot programme, designed to examine the totality of public spending in local areas and to identify potential synergies, partnerships and cost savings, has “huge potential”, says Housden. What’s more, the approach should survive any change of government: “Total Place pilots span the political spectrum,” he says. “And although there are 13 official pilots, there are at least five times as many areas that are using the same philosophy. So you’re talking about something that really resonates on the ground; that gives me confidence that it has some shelf-life”.

Not just cheaper; better
Total Place is, says Housden, part of a new approach to efficiency; one that seeks to realise both service improvements and cost savings by changing processes. “It feels like a much richer and more lively and more policy-focused agenda than it would have been ten or 20 years ago,” he says. “It’s about meeting the needs of individuals and communities, redefining services on that basis, and driving efficiency and innovation in parallel.”

Already, he adds, councils in areas with two-tier local government structures are “sharing more services, premises, assets – staff, in some cases”. The need to drive down costs will provide a major boost for this kind of collaboration; but making it work will, Housden concedes, require a much less controlling approach on the part of government departments: “The pre-Budget report made commitments about the reduction in the complexity of the [council] performance framework; the amount of ring-fenced grants; all the sorts of things that local people say they need to deliver this flexibility.”

Over the years, Housden believes, central government’s target systems, ring-fencing and inspection regimes multiplied – and “while the individual regime for social care or education or planning might be reasonable, the overall cost of meeting all these different regimes was high”. This process was not driven entirely by the centre, he adds, recalling his years in local government. As a council chief executive, he often found that his own departmental heads would be “in Whitehall requesting indicators, guidance, ring-fenced grants, in order to protect his or her service within the county council”, he remembers. “Their favourite speech was: ‘We can’t do that, because government won’t allow us to’.”

Finding a middle way
Nowadays, the tide has turned, with a slimmed-down system of local authority indicators – and inspection regimes are also likely to shrink back. “Inspection has become much more developed in the years since I left local government,” he says. “That is perceived as a burden, and I think there’s a general view – ministers hold it currently – that it needs to be rationalised. So I don’t think there’s any complacency that we’re at the right point; everybody agrees that we’re in a process of trying to define smarter ways for national frameworks and priorities to be reflected at local level.”

Central departments, then, will have to accept less control over some of their delivery arms’ local operations, giving service providers the freedom to react to local conditions and align their work with that of their partners. But Housden is clear that some activities still require national uniformity and strong central control. “I’ve been involved in this debate for 20 or 30 years now, and it’s much more sophisticated nowadays; we’ve got away from stereotypes,” he says. “There used to be people from local government who’d argue that everything should be locally determined, and people from central government who hadn’t got any time for local creativity or flexibility. There’s a much more grown-up debate going on now.”

For example, he says, in delivery of benefits the priorities are speed, efficiency, and uniformity; but in helping the unemployed find work, local flexibility is crucial – “so there you want your individual departmental officers, from health, training, housing, whatever it might be, to be capable of mixing and matching services”. These days, Housden believes, “There’s a much more nuanced approach – horses for courses – and a better understanding of the sorts of things that ought to be shaped locally and the sorts of things where a more uniform national offer is required.”

There is, of course, a third level of governance in England – and Housden is clear that the regional dimension to strategy and policy is “critical”. Regional assemblies have gone and the Tories are threatening regional development agencies with abolition, but the CLG’s permanent secretary believes that we may be witnessing the birth of a new form of regional governance and coordination.

“The logic of Total Place, if you follow it through, needs political accountability – and not only at local government level,” he says. “If national government is becoming more nuanced, more flexible, more engaged in different spatial dimensions, then actually MPs and ministers will want to be engaged with it, to exercise political leadership.”

Regional ministers, Housden believes, could end up playing an important role in shaping policy by representing and championing regional agendas – both in the town halls, and in Whitehall. They may not have much in the way of budgets or executive powers, but they’re already wielding significant influence.

“It proved very hard to get the democratic accountability end of the regional agenda to fly – but we’re getting more into regional select committees now, and that type of activity, which I think is powerful,” Housden says. “When we look back at this Parliament, we may well find that one of the most significant things that started here is the stronger role for regional ministers.”

The word on everybody’s lips might be localism, but – at CLG, at least – the regional agenda is very far from dead.

Red letter days: opposing views on local government reorganisation
Civil servants tend to steer clear of the mainstream media limelight – but Peter Housden recently attracted excited coverage in the broadsheet press, when it became clear that the CLG permanent secretary had asked communities secretary John Denham to take full responsibility for a decision over the reorganisation of local government in East Anglia and the West Country.

In February, Denham decided to push ahead with the creation of unitary authorities in Exeter and Norwich – but Housden thought the decision conflicted with his responsibilities as the department’s accounting officer, and requested that Denham formally order him to execute the policy. “John Denham was making a decision that was outside the criteria that the Boundary Commission had used to consult upon and recommend their changes,” says Housden. “He understood and was being advised all the way through that the option he was choosing did not represent the best value for money, and because of the fact that it was at variance with the criteria that the commission had used, there was a high chance of a successful legal challenge. He had sound and clearly articulated reasons for making his decision – but given my responsibilities as accounting officer, these were circumstances in which I needed to seek a direction. We followed the established procedure, and we made the letters available to the public accounts committee (PAC) in the ordinary way.”

The correspondence quickly made it into the public domain – but, says Housden, “The idea that the letters were leaked is nonsense”; such letters are released by the PAC. Housden acknowledges that he sent a copy to Richard Bacon, the Tory MP for South Norfolk, who had written to him asking whether there was a direction. He adds, though, that because Bacon is a member of the PAC, he already had a copy of the letter.

Some critics, including former Norfolk MP Gillian Shephard and the Financial Times’ Whitehall correspondent Sue Cameron, have argued that ministers shouldn’t make such controversial decisions this close to an election. But Housden is having none of it: “There’s no problem about making this decision at this stage,” he says. “Until the election is called, they can make decisions in a perfectly ordinary way. There wasn’t a question of timing.”

Keen to downplay the episode, Housden points out that there has been a run of such ‘directions’ during the recession: the scrappage scheme required one, he says, as did Treasury action to save the banks. And did the clash damage Housden’s relationship with Denham? “It’s an established procedure. Ministers and officials are both aware of it,” he says, adroitly sidestepping the question. “John Denham is an experienced and capable politician, so he was absolutely clear about what he wanted to do and why he wanted to do it. As he says, now Parliament decides.”

CV Highlights
1973: Graduates from Essex University with a degree in sociology
1975: Becomes a teacher in a comprehensive school in
Telford, Shropshire
1979: Joins Humberside County Council’s education department, and embarks on jobs with a string of local authorities
1991: Appointed director of education at Nottinghamshire County Council
1994: Promoted to become chief executive
2000: Seconded to the Audit Commission to lead its work on the NHS national plan
2001: Moves to Department for Education and Skills as director-general for schools
2005: Made permanent secretary at the Office of the Deputy Prime Minister – which later becomes the CLG