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The absence of a clear government strategy on MMC outline in report.
As first reported in Construction News, a House of Lords committee has been unable to identify the causes of recent failures in offsite construction projects. In 2019, Nick Walkley, the former chief executive of Homes England, announced a £30 million loan for modular builder Ilke Homes, citing “huge, untapped potential” in offsite manufacturing. However, following Ilke Homes’ collapse last summer, along with other modular construction firms such as Caledonian Modular and the modular divisions of Legal & General and Urban Splash, the investment was lost.
The House of Lords’ Built Environment Committee, led by Lord Daniel Moylan, aimed to investigate these failures. However, their report in January provided more questions than answers.
Government Strategy on MMC Lacking?
The report criticized Homes England and the Department for Levelling Up, Housing and Communities for not providing a clear strategy on MMC. Lord Moylan expressed concern to Construction News, stating, “We take this as meaning they don’t have a strategy.” Housing Secretary Michael Gove countered this by saying that the strategy exists across several documents. The reasons behind Homes England’s investment choices, particularly in Ilke Homes and House by Urban Splash, remain unclear, with the report unable to assess the government’s performance against its objectives.
Is Modular Construction More Expensive?
Lord Moylan questioned the claim that offsite construction cannot offer cost advantages over traditional methods. Testimonies during the inquiry suggested higher costs for modular construction, with Katie Gilmartin from Platform Housing Group noting MMC prices to be 30-50% higher than traditional builds. However, volumetric builder TopHat and Make UK Modular argued that costs would decrease over time as manufacturers benefit from economies of scale.
Will There Be Sufficient Demand for MMC?
The Chartered Institute of Housing pointed out that a lack of demand pipeline is a common factor in recent modular failures. The committee was unable to determine why the private sector is not meeting this demand, despite the advantages of faster build times and sustainability. Homes England’s Affordable Homes Programme mandates that 25% of homes delivered by housing associations use MMC, but it does not specify the use of volumetric modules or pre-made structural components. The report also noted the difficulty in assessing the success of this initiative, as the government has not published data on the types of MMC used, despite promising to do so in 2019.
