Rok aims to double size of housing business

Rok wants to become the UK's no.1 player in social housing. Will Mann talks to the men behind the business, current housing director Gavin Fraser (pictured) who recently took over from Kevin Willetts, now group business development director.

Give us some context. How big is Rok's housing business now, and how much do you want to grow it?

Gavin Fraser (GF): We are currently at £230m, of which £130m is new build, the remainder RM&I [repair, maintenance and improvement]. Our forward orderbook is the highest in the country (the 12-month CJ50 Social Housing table has Rok with £877m-worth of wins from the last 12 months, more than double its nearest rival) and our plan is to double our turnover in these areas by 2012.

How would that break down by type of work?

GF: RM&I would be slightly over half, with new build accounting for the balance. So we expect more growth in RM&I, though we want to be market leader in both.

Decent Homes Standard work is going to start falling off, so where do you see the RM&I growth coming from?

Kevin Willetts (KW): The Decent Homes programme is admittedly about 80% complete, and we will see some fall-off in that kind of work, but even so, I'm seeing some OJEUs for kitchen and bathroom replacements on estates that were refurbished 15-20 years ago.

But we see the main growth in maintenance. We want to increase our market share of the rental-funded planned and responsive repairs market, which is worth around £3.5bn to £3.8bn. Because it's rental-funded, the revenue is guaranteed.

We reckon our responsive maintenance business can grow by 50%. We've already got the infrastructure in place for this kind of work with our Mansfield call centre, which handled 60,000 claims last year for our insurance business.

GF: One thing we're finding is that planned and responsive maintenance are being bundled together in OJEU notices, sometimes with improvements too.

How do you see new build shaping up - surely it's been badly hit by a fall-off in Section 106-funded developments?

KW: What we want to do is bring investment in from institutional investors such as pension funds, for new-build rental schemes. The demand for private and social rental is going up, and these investors will have long-term visibility of earnings from the rental stream. The HCA is also more likely to support these schemes because there is obviously a smaller grant required.

GF: We're also looking to 'buddy up' with development partners for private rental schemes, such as Carvill, who take the risk on speculative houses but employ Rok to build them.

Would you ever become a developer?

GF: No, it's not our intention to step outside our building and maintenance role.

However, one aspect we're developing for our housing customers is a 'landfinder' service. We do a profiling exercise to understand our customers' needs, then we search land against these criteria. We've recruited people who have background in land acquisition, though we also incentivise people outside the business to bring land opportunities to us.

KW: Our vision is to offer our housing customers a complete service, where we find them the land, build the homes, and then maintain them.

Are you planning any changes in your housing designs?

KW: We want to reinvent the image of social housing, give it what commercial house builders call 'kerb appeal'. These are well-built homes - the bricks we put in our social housing are more costly than those in private houses.

This is the thinking that goes into the Rok Home of Choice. We need to put back pride into the property, which means giving the tenants more input into their homes. Typically, tenants just get a palette of four or five colours to choose their kitchen designs from. Why not take them down to B&Q so they can choose from everything available, like a private home-owner would do?

GF: From a business perspective, the Rok Home of Choice also helps us to understand viability of any schemes, establishing supply chains. It's flexible in exterior appeal - we need to design in a bespoke manner for RSLs - but repetitious, so that, for example, the floor cassettes are always the same. That helps us to buy in volume and keep costs lower.

Kevin Willett CV

• Age 52
• 2009-present, group business development director, Rok
• 2003-2009, head of housing, Rok
• 2000-2003, head of social housing, Mansell
• 1992-2000, development director, Mercian Housing
• 1982-1992, various development roles, Coventry Churches Housing Association

Gavin Fraser CV

• Age 37
• 2009-present, housing director, Rok
• 2003-2009, various roles on frameworks team, Rok
• 1991-2003, various housing roles, North Tyneside council