The benefits of MMC housing are evident for the public sector – so why has take-up been so slow? Barriers to entry, from cost to standardisation need to be eradicated, says John Skivington, Group Director at LHC.
Despite a report calling for construction to ‘Modernise or Die’, the sector is yet to completely embrace modern methods of construction (MMC) as its modus operandi. Yes, interest has grown in recent years, but there are concerns among some parts of the social housing sector that the approach has stalled. I believe this can be attributed to a misunderstanding around the barriers to entry and complications with public sector procurement constraints. It’s vital as a sector that we dispel these myths: the country will benefit both economically and politically from widespread adoption.
The public sector could benefit from MMC to help meet the government’s ambitious target to build 300,000 homes a year to address growing demand. Statistics show that we are not even close to achieving this – the most recent figures show that just over 177,000 homes were completed in the 12 months to September 2019, with just 153,940 housing starts. With a need to accelerate local construction, MMC buildings can be delivered much quicker than traditional building methods, resulting in more homes with less disruption to the local area: it should be seen as the delivery method for public sector housing to rely on.
Alongside meeting these targets, the sector is currently addressing an overhaul of safety and accountability. With the revised building regulations, the focus will be on ensuring the safety of high-risk residential buildings through an emphasis on higher quality. As more of the process for MMC buildings is carried out in factory controlled conditions, the sector can benefit from a consistent quality of product. There are fewer snagging issues as a result in comparison with traditional construction methods. And as government seeks to meet daunting environmental targets, it is seeking to deliver greener homes. MMC’s higher quality products, produced in controlled conditions, can help to ensure that the gap between the ‘actual’ versus ‘designed’ performance is minimised.
The benefits are clear – even the government has been vocal in support of it in the recent planning white paper, so why do so many concerns remain for MMC? First, MMC is seen by many in my sector as an expensive luxury, particularly regarding a high initial project cost. Some feel that because of this, MMC is an unviable option for the public sector. In reality, however, MMC homes have lower overall lifecycle costs: project delivery is much faster so you’ll see the sales or rent revenue much earlier. The message still needs to get through to social landlords that MMC homes also benefit from reduced maintenance costs thanks to the build quality. And as more MMC homes are procured, the additional volume of work results in an economy of scale, so costs are likely to come down further as the market becomes more mature.
Secondly, there is a perception that public procurement constraints really limit a local authority’s ability to develop the right relationships required for MMC. The view is that because a consistent pipeline of work is required for the manufacturers, local authorities are not in a position to create that long-term demand for one supplier because of the way projects are procured. There is also the concern that MMC housing schemes are too complex to manage with more stakeholders and more technical areas to keep on top of. The truth, however, is that through framework agreements the contracting authorities will be able to manage this process much more easily, with a single point of contact and technical expertise across all RIBA Plan of Work 2020 stages, from the initial stages through to design, construction, handover and use. This is what LHC provides. Framework agreements allow these relationships to flourish over a longer-term period and helps set out an integrated supply chain. It’s a win-win.
At LHC, we found that some local authorities struggled to deal with the unique challenges associated with MMC, in particular understanding project risks and ensuring smooth delivery. This is why we developed our Offsite Project Integrator framework to provide this technical support at every stage, making available specialist consultants to help make the business case for MMC housing.
MMC would also support the government’s commitment to delivering greener homes of a higher quality – parts are less likely to be faulty due to the controlled factory conditions, and they can be manufactured with a lower carbon footprint. A recent report published by Cast Consultancy and HTA Design indicates that offsite technology can result in a 40% reduction in emissions when compared to traditional construction – in particular there is a dramatic improvement in embodied CO2 emissions.
We are seeing local authorities beginning to look past these barriers to entry to see the value MMC can bring. Our MMC framework has already led to a pipeline of nearly 5,000 MMC homes across 133 projects. The government’s push towards MMC in its policies and white papers should see this figure increase further. In order to implement this shift though, over-stretched local authorities need proper resourcing, technical and practical guidance, as well as help on where it can get best value for money locally. This is where LHC’s experience, local procurement expertise and MMC knowledge can certainly help. As local authorities continue to search for value for money, I believe that more and more will turn to MMC as a solution to their housing crisis.
For more information visit: www.lhc.gov.uk
