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Housing Corporation chair Baroness Dean gets around. In the past couple of months, she has been on a dive in a submarine off Plymouth, on a frigate off the Belize coast and on a minehunter off Scotland. These excursions were for one of her other jobs, as chair of the Armed Forces Pay Review Body. One wonders how she finds the time to lead the £1bn-plus-a-year funding body for social housing. Dubbed the quango queen, she is reported to sit on 10 committees. When she is finally tracked down to the Housing Corporation's Tottenham Court Road offices, she is totally focused on the business. Perched in an armchair, resplendent in a fuchsia and charcoal grey suit, she looks younger than her 57 years, and the strains of the past six months, when the Housing Corporation has been fighting for its life, do not show.

In the three years since she became chair of the corporation, Dean has sometimes been accused of being too hands-off, and spreading herself too thinly between her many roles. In the past half year, however, she has been forced to devote more than the statutory two-and-a-half days a week to Housing Corporation business, to fight for its survival. For the first half of 2000, its fate hung in the balance as the government carried out a five-yearly review of its performance as the regulator and funder of registered social landlords (RSLs). There was speculation that its power might pass to the new regional development agencies or to local authorities, while its regulatory function could merge with the the National Audit Office's housing inspectorate. Since February, when the corporation's dynamic chief executive Anthony Mayer left to chair the fledgeling Transport for London, it has been up to Dean to justify the corporation's existence. Thankfully, Dean, who made her name leading the print union SOGAT through the Wapping strikes, is used to fighting her corner.

"This year has been pivotal for the Housing Corporation," she says, in her soft Mancunian voice. She speaks with the poise, and the pianos and crescendos, of a politician used to the debating chamber. "Certainly, there were people on the five-year review panel who wanted to get rid of the corporation. But we were determined that we wanted to change. We saw it as a way of taking the corporation to the next stage of development", she says, judiciously.

In July, the government deemed that the Housing Corporation should stay, but that it needed to reorganise and modernise itself to meet the challenges set out in April's housing green paper. The draft policy proposed to deal with a £19bn backlog of social housing repairs within a decade. This was to be achieved by measures including a massive transfer of housing stock from local authority to housing association control and the creation of a more diverse range of social landlords. It also pledged increased support for low-cost home ownership. The policy was given legs by the Treasury in July, when it increased the corporation's annual budget from £762m in the current financial year to £1.2bn by 2003/4.

The DETR review panel said that if the Housing Corporation was to administer its extra funding, it needed to improve its financial acumen, efficiency and accountability. This effectively meant that the corporation would have to make its regulatory processes more transparent, increase the business and finance expertise of its regulators (in order to keep up with the increasing financial sophistication of housing associations), proactively stimulate improved performance from the housing associations, and involve tenants on the boards of housing associations. On the funding side, the review panel said it should make more strategic, less formula-driven investment decisions, consulting closely with local authorities to avoid investing in no-hope areas. It also stressed that the corporation should improve its use of IT in the assessment of funding bids.

After a summer of soul-searching, the corporation has come up with a package of reforms in response to the government's recommendations. "We are in the process of deconstructing the organisation in order to reconstruct it," says Dean. The reconstruction, or what some people have termed a reinvention, includes the recruitment of Norman Perry, a career civil servant with on-the-ground experience of urban regeneration and management. Perry, who has 11 years' experience at the DETR, is seen as the missing link between the quango and central government. Dean says of his appointment: "What Norman brings to the job are individual talents and experience that have been really welcomed in the sector. It is important that we are able to deliver and prove worthy of the confidence that the government has placed in us."

Other changes include a overhaul of the corporation's regional structure, with the separation of the regulation and investment functions, and the creation of three new assistant chief executives, responsible for "regulation and best value", "investment and regeneration" and "organisational effectiveness". This new structure will come into force in April 2001. Meanwhile, the corporation has created an RSL inspection service to ensure best value and continuous improvement and has transferred all grant-bidding and payment systems to the internet.

There is no doubt that some of the housing association stock you see is pretty boring, run-of-the-mill stuff

Dean goes into a crescendo over the internet project. "We got 8500 bids totalling £2.8bn in four weeks. To get that many bids from a standing start is absolutely phenomenal. Incredible," she gushes. A lot is riding on the success of this venture, which Dean sees as a symbol of the corporation's ability to modernise. Many housing associations reported difficulty in getting access to the internet bidding system when it was launched last month, but Dean brazens this out like a true politician. "Many of them thought that they could not access the system because it did not work. It did work, it's just that it was too successful. It is like making a phone call and finding the line is engaged."

Now the corporation has to get down to work. The budget increase is attached to targets to upgrade 500 000 homes and build 56 000 new ones in the next four years. Last month's rural white paper directed the Housing Corporation to double the affordable rural homes it funds from 800 to 1600 a year.

The government wants this new social housing concentrated in London and the South-east, where demand is greatest. And it wants it to be better quality than ever before. There is a view in the industry that many housing associations have learned to leap through the Housing Corporation's hoops to attain funding, but produce dull homes that nobody wants to live in. This problem has been made more acute in the South-east, where rocketing land values have driven down costs, resulting in unimaginative design-and-build schemes becoming the norm. This means that, rather than creating communities, the corporation creates staging posts. A source at Architects in Housing says: "The Housing Corporation has never worked out how to get glamour into social housing. They are sowing the seeds of decline for the developments they have just invested huge amounts of public money in."

Dean freely acknowledges this problem. "There is no doubt that some of the housing association stock you see is pretty boring, run-of-the-mill stuff. But there is a lot out there that is innovative and I'd personally like to see more of the modern architects, the household names, involved – as they are on the Continent."

The corporation has already set about addressing this problem. It has developed a "sustainability toolkit" – a set of 49 indicators by which RSLs can assess the long-term demand for a development as part of the bidding process for corporation funding. The corporation is also developing housing quality indicators for evaluating housing on the basis of location, design and performance, rather than cost. It will soon launch five pilot schemes for housing regeneration companies (local authorities, RSLs, co-operatives, private landlords and other agencies) aimed at devising innovative, cost-effective ways of providing and managing housing sustainably.

As part of the government's strategy to improve the design and construction quality of social housing, the Housing Corporation also has to meet tough government targets on promoting the Egan agenda among housing associations. It has to ensure Egan compliance from 10% of housing associations next year, 60% in 2003/4 and 100% in 2004/5. The corporation is using incentives, including the £80m Kickstart programme aimed at stimulating UK manufacturing capacity for off-site pre-assembled homes. It has named seven preferred suppliers of steel and timber-framed modular housing units to partner with RSLs bidding for the £80m. "We have received £90m of bids already, which shows that the sector has woken up and is responding to it." Dean says this Egan policy will soon apply across its development programme. "If they are coming up with really boring, old-fashioned design-and-build methods, they are less likely to get money from us than those using the best of the new methods and being innovative in their design."