With its echo of Darwin’s immortal ‘adapt and survive’ precept, the title of the UK review by Mark Farmer, is a rallying cry for the offsite industry.
Author of the UK Government Review of the Construction Labour Market Model entitled ‘Modernise or Die’, also widely known as ‘The Farmer Review’, Mark Farmer has 30 years of experience in the construction and real estate sectors, and now runs a consultancy specialising in innovative delivery models.
As such he is eminently qualified to analyse the state of the offsite industry, primarily in the UK but also beyond. Speaking to Built Offsite, Farmer paints a compelling picture of the challenges ahead.
He describes the existent construction industry as one in which “the accepted delivery model is underpinned by competitive tendering of largely bespoke designs to contractors, using ad hoc supply chains that in turn are deploying antiquated and labour-intensive construction techniques.”
“Low levels of capitalisation in the supply chain, risks of economic cyclicality and an increased structural reliance on a casual, and migrant dependent labour force have all conspired to mean that new ways of working, including increased adoption of prefabrication, are viewed with suspicion, not just by the industry itself, but by clients and their advisors. This is something that has been a feature of the UK industry for many years, perhaps amplified by the legacy of technical problems left by previous post war ‘prefab’ initiatives that were not appropriately quality controlled.”
In the UK, recent developments are forcing change, he adds. “The UK now has Brexit to contend with, which has created a new burning platform for change, whereas Australia has perhaps a more free trade and labour policy, especially with the rest of Australasia. The US market also has strong similarities, with prefabrication being viewed as a marginalised part of construction, albeit it is clear that market disruption is starting to impact that market in pockets. Fallout from President Trump’s anti-Hispanic migration stance is likely to hit the US construction industry disproportionately meaning that in a way the US has its own version of Brexit to contend with, which might accelerate change as it is in the UK.”
Given the entrenched nature of the traditional construction industry, expecting any emergent offsite sector to “pull itself up by its own bootstraps” is a tough proposition, he says. Instead, what’s needed is a proactive policy framework to foster a robust industry.
“I am not surprised by the current state of maturity of the Australian prefab market. It has struggled with many of the barriers to growth that the UK market has. There has not been any evidence of a concerted government- or policy- side push to promote modern construction as part of a wider industrial strategy so in the absence of some form of market intervention of government initiation or ‘market making’ support, the construction sector will always struggle to modernise itself from within.”
THE UK IN DETAIL
The Farmer Review outlined “deep-seated structural issues” affecting the UK’s offsite market, which, Farmer contends, has to contend with considerable structural “change inertia.”
“[The UK market] has a strong desire to be flexible, with low levels of fixed costs, low discretionary spend on R&D and innovation, low levels of direct employment, and a high degree of sub-contracting which has created a fragmented and adversarial delivery model.”
“A very ‘linear’ traditional procurement model that splits design from tendering from construction from end asset occupier needs also acts as a blocker to the increased integration needed for manufacture-led thinking being injected early into design development.”
“In addition influential client side advisors, including designers, project managers and QSs often know little about the products and technology now available. In some instances they feel threatened by promoting more integrated procurement models and ultimately are as a result loath to promote different approaches to their clients.
On the other side of the coin, the offsite sector needs to
get much better at promoting its benefits case back the other way and also to
harness the combined economy of scale that could be released by improving inter
business collaboration and the inter-operability of different systems or
On the subject of collaboration, Farmer says one key area in which industry can help itself is by developing and adhering to a common language that reduces the risk of clients and their advisors thinking that choosing one particular system holds them hostage to one particular business, especially in the event of an insolvency.
“This has been a funding problem in the UK. Inter-operability and component level standardisation can hopefully be promoted through such mechanisms as the Modular Construction Codes Board and its handbook which was launched by prefabAUS / Monash University. I believe the launch of the Handbook on the Design of Modular Structures is a big step forward for the Australian prefab market. Anything that centrally unifies and drives conformity of approach as well as a general education about the offsite sector has to be a good thing. There are too many mistaken preconceived ideas that are in desperate need of correction through initiatives such as this.”
Meanwhile central and regional government intervention is vital, through public sector procurement or wider policy that actively looks to support the evolution of the prefab market as part of a construction capacity building initiative.
Overall Farmer says supportive government policy, promoting or incentivising innovation and R+D through fiscal measures or land and planning breaks might be the ‘carrot’ while a ‘stick’ of mandating certain commissioning behaviours can also be deployed.
“This has started in UK with a BIM level 2 mandate for certain public works and could progress to dictating minimum levels of pre-manufactured content on certain schemes, as Singapore currently does for its government land disposal programme. It is also critical that a move to offsite is accompanied with the confidence that it is a proxy for high quality and the consistency of that high standard. Ultimately, the funding market that finances developers / construction projects needs to buy into the long term investment or debt financing potential of the market.”