20 January 2023

The inflation crisis is stopping us from building new homes, says Peabody chief

Ian McDermott’s housing association has had to refocus resources on warm banks and other initiatives to alleviate tenants’ hardship.

By Emma Haslett

Ian McDermott was just about to leave his offices in King’s Cross, London, for the weekend when he first heard that Sheila Seleoane had been found dead in her flat. In February 2022, two and a half years after her neighbours had first begun to report an unpleasant smell, and flies and maggots in the corridors of their block in Peckham, police had finally broken down the door of the apartment and discovered the body of Seleoane.

The incident prompted a public outpouring of emotion about isolation in modern society. Seleoane, 61, a South African medical secretary, appeared to have had few friends, no close family and not even colleagues who had missed her. Her rent and council tax had been unpaid for more than two years. Neighbours had made repeated requests to their landlord and the police to check on her; police had mistakenly reported to the landlord that she was “safe and well”.

For McDermott, Seleoane’s death was personal, because he was her landlord. Six months earlier, in October 2021, he had been appointed chief executive of Peabody, the housing association responsible for her block of flats, which had been propelled into the position of the second-largest housing association in the UK. A merger with Catalyst, which McDermott had run for the previous two years, had pushed the number of homes it managed to 104,000, primarily in London and the Home Counties, with 220,000 residents. For some, Seleoane’s lonely fate was regarded as the inevitable consequence of such massive scale among housing associations.

McDermott first heard of the incident when his personal assistant showed him a video that had been posted to social media, showing paramedics carrying Seleoane’s body out of the apartment complex. After that “it was all mobile phone calls”, says McDermott.

Early the following week McDermott visited the estate “just to see it and understand what had happened”. He also appeared alongside the estate’s local MP, Harriet Harman, on the Today programme to explain what had happened. “It will take a long time for me to forget [that] experience,” he says now.

In the weeks following the discovery of Seleoane’s body, Peabody commissioned an independent report that identified dozens of missed opportunities, including 89 attempts to contact her that had not been followed up. In short, it said, the housing association had failed to “join the dots” and had not lived up to its corporate ambition to be “human and kind”. McDermott says the report was “uncompromising”, and that the housing association has learned lessons from the episode.

“When something like that happens, it’s deeply personally upsetting,” says McDermott. “It’s a horrible experience for us as an organisation, for the people who lived in that in that block [and] I think it sent a shockwave through the whole of our organisation and customers, the residents that we support.

“Ultimately, I’m responsible for that. I’m still the chief executive of Peabody. Trust is the most important thing, and you need to think really carefully about how you generate trust.”

The Seleoane case had echoes of other recent deaths of housing association tenants, in that they came after residents’ complaints had been ignored. In the case of Grenfell Tower, the building’s residents had warned of a “future major disaster” because of poor safety, while in the more recent case of Awaab Ishak, the two-year-old boy who died as a result of black mould in Rochdale, his parents said that “we shouted out as loudly as we could”.

McDermott says Peabody’s response to its particular crisis has been to make sure people “are walking around with their eyes open… making sure that people are walking their patches, going back to some very old-school housing management”.

But he worries that as the cost-of-living crisis drags on the risk is that those working with the vulnerable become immune to their struggle. “I was talking to another [housing association] chief executive who dealt with a really appalling case of damp and mould. And she said the thing that really upset her was when she discovered that three or four members of her staff had gone in and witnessed it and walked away. They had become so immune to that that actually, she realised that there was a kind of systemic problem.”

Peabody has stepped in to help its residents weather the cost-of-living crisis, providing advice on switching energy tariffs, offering practical help to get people into employment (McDermott says the organisation has helped 500 people get jobs in the past year) and creating 70 warm spaces “where people can just go and sit and play games, read books, do whatever they want”.

“We know from our data that people are turning down their heating, we know that they’re making difficult decisions about heating and eating at the moment… and we need to be really sensitive about it. It’s one of the reasons we need to be particularly sensitive about damp and mould and the consequences of that.”

Does the crisis represent a failure of the government to discharge its duties properly? “It makes you angry, of course – it’s wrong. There’s lots of things that the government could do, fundamental things that they could do to help,” he says. Prepaid energy meters are at the top of his list of targets: “The expense associated with prepaid meters, where you have some of the poorest people in society paying a disproportionately high amount and having to pay for things in advance. That makes me really angry – you’re being punished in those circumstances for that.” He says Peabody has lobbied hard against prepaid meters “and will continue to do so”.

Part of his frustration, he says, is that the cost-of-living crisis is preventing his company from building much-needed affordable homes. According to research by Heriot-Watt University, the UK needs 100,000 new social rented homes a year: government figures show that in 2021-22 only 7,528 were completed. The crisis will make the situation worse, says McDermott. “It has an effect on the extent to which we can plough our resources into new homes rather than actually tackling the problems of our current client base. Tackling inequality in society is really the most important thing.”

Peabody – originally the Peabody Donation Fund – was founded in 1862 by George Peabody, the American philanthropist who helped, among other things, to establish the US banking giant now known as JP Morgan. Having grown up in poverty in Massachusetts and moved to London in his forties, Peabody’s aim was to “ameliorate the condition of the poor and needy of this great metropolis (London), and to promote their comfort and happiness”.

One hundred and sixty years later, does McDermott worry that we are returning to a Victorian model, where it is the responsibility of the rich, rather than the government, to improve the welfare of the poor? “I think that’s certainly true. It’s much more the American way than it is the European way, and I think that would be sad and regretful if we do go any further down there,” he says. “But yeah, I think that’s true.”