Not for the first time, offsite manufacturing – or modular building - is high on the agenda within the construction sector. In these challenging times, it is seen as a 'go to' solution for tackling the stormy waters ahead in terms of grappling with labour shortages, shrinking profit margins, the housing crisis and the pace of technological change.
Before the Budget, London Assembly members directly appealed to Philip Hammond for extra investment in modular housing. They warned that 'only a cutting-edge, digitally-led industry that combines both traditional construction and factory-based precision manufacturing can support the vast demands we as a nation now require'. The perceived benefits of offsite manufacturing include its attractiveness to younger, home-grown workers who are keen for a digitalised career path, its capacity for reducing our reliance on EU workers (who account for around a quarter of construction workers in London) and an ageing workforce, and its potential to improve Britain's technical capabilities and innovative edge. Within the housing sector, the perception of many is that the traditional bricks and mortar approach is no longer enough, and automation is essential to deliver the housing needed. Another major plus is the capacity for modular construction to create jobs and opportunities nationwide and not just in the South-east. For example, in relation to the proposed third runway at Heathrow, shortlisted offsite hubs – where components will be pre-assembled and consolidated - are located across the country, including in the North-east, Northern Ireland, Wales and the South-west.
Of course, offsite manufacturing is not new. In the post-Second World War era, a demand for housing was met to some degree by large panel residential systems adopted from Scandinavia. But poor durability and structural performance contributed to a perception of prefabricated construction as inferior to more traditional methods. In recent years, an incremental approach has seen successful use of modular construction – for example, bathroom pods and façade manufacture– increase. But a comprehensive willingness to engage and adopt has yet to occur, not least because of the ongoing perception of modular construction as a low quality option. Earlier this year, the CITB reported that offsite construction accounts for less than 10% of total output within the sector, with only 16% of clients currently using it.
Changing technology may facilitate an increasingly positive perception as modular building extends beyond low-rise, affordable housing into more ambitious schemes. Chancellor Philip Hammond's focus on offsite in the Autumn Budget may also be a game changer. Recognising the importance of modernisation and innovation to the future of the industry, Hammond stated that the government will drive adoption of modern methods of construction, such as offsite manufacturing. Governmental departments such as the Department of Transport and the Department of Health will 'adopt a presumption in favour of offsite construction by 2019 across suitable capital programmes, where it represents best value for money'.
Hammond's commitment in the Budget to the sector seems to have been met with cautious praise. It is widely hoped that his endorsement of offsite will increase confidence in and commitment to its use. But success is dependent on ensuring that trained personnel exist to implement it. The CITB identified the absence of a skilled workforce as one of the biggest challenges to offsite. In the Budget Hammond also assigned £34m specifically to developing construction skills and the Construction Sector Deal includes a further £170m of investment in innovation and skills. The strategic deployment of these funds will be critical.
