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We cannot make volumetric construction mainstream without a government strategy
Housing secretary Michael Gove offers warm words but no action on volumetric modular housebuilding, writes Carl Leaver, chair of TopHat
Carl Leaver is chair of TopHat
We cannot make volumetric construction mainstream without a government strategy #UKhousingHousing secretary Michael Gove offers warm words but no action on volumetric modular housebuilding, writes Carl Leaver, chair of TopHat #UKhousingIn January, the House of Lords Built Environment Committee shared the interim findings of its inquiry into modern methods of construction (MMC). Committee chair Lord Moylan’s letter to Michael Gove does not profess to have all the answers to the question of “what went wrong” in the volumetric sector. But it does diagnose some persistent issues that the government can no longer ignore.
The lack of a coherent plan to encourage the use of MMC is perhaps the most troubling issue identified by the committee. The observation that the government provides “information on its intentions in a piecemeal way, or indeed not at all”, and is therefore challenging to scrutinise, is intended to be addressed by way of a full strategy for MMC published by the end of March.
Provided the government stick to that date, officials have the best part of two months to develop a more comprehensive understanding of MMC. This was another area of concern raised by the committee: the government “appears to have made limited effort to understand and address” the challenges stunting the sector’s growth, which goes some way to explain its absence of leadership.
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Then, there are lingering misconceptions, many of which aired in the inquiry itself. The stand-out example is the entirely incorrect notion that volumetric modular is the beneficiary of large subsidies from the government. There is no subsidy provision for our sector that isn’t also available to traditional house builders through the Affordable Homes Programme (AHP).
The government is no stranger to involving itself in strategically important sectors. Consider the support that the car industry has received. Nissan alone has now received £800m of public money, starting in the 1980s when it brought highly automated vehicle manufacturing to the UK. Where would electric vehicles be without buyer subsidies and the huge sums paid to develop battery factories? It is highly unlikely that the car industry, left to its own devices, would have made the leaps necessary to modernise and become globally competitive.
“If the government listened to the sector, it would understand that barriers can be removed without cost”
The same is the case for housing. Houses today are built in largely the same way as they were centuries ago and methodologies are deeply entrenched – from the planning system through to delivery – with no incentive to change. Yet, everyone knows that we are heading down a blind alley, where rapidly dwindling skills will prevent the houses we need being built for anything like the cost that people can afford.
In the face of this common understanding, major house builders invest a pittance in research and development, industry commentators freely knock-down pioneering attempts to solve the problem, and the government lends warm words but no action.
In his evidence to the House of Lords Built Environment Committee on 6 February, it was reassuring to hear Mr Gove recognise the potential benefits of volumetric construction while suggesting that they will only accrue when there is sufficient volume going through the factories. Warm words, indeed. Yet, regrettably, when it comes to action, he was less forthcoming on how the government could support this necessary volume growth.
Specifically, Mr Gove was non-committal on applying the AHP in a more purposeful way – something that could be done very quickly. He also, rightly, said that it was important that the private sector generated its own demand, while neglecting to propose any solution to overcome industry inertia or “pattern books and ways of operation”, as he called it.
Aren’t these circumstances the very definition of a market failure and exactly the kind of situation when the government should play a more active role? Surely, building the houses we live in is as strategically important for the country as the cars we drive?
Volumetric construction is mainstream in many countries. But the housebuilding industry, dominated as it is by the short-term earnings cycle, will never change by itself. Just as the car industry needed an injection of impetus from the government, so does volumetric modular construction.
“Houses today are built in largely the same way as they were centuries ago and methodologies are deeply entrenched… with no incentive to change”
The good news is that, unlike the car industry, this is not about new money. If government listened to the sector, it would understand that barriers can be removed without cost, existing money can be utilised more purposefully, and the government’s own land and housing requirements can be brought to bear to catalyse the sector and put it on the path to playing a meaningful role in solving the country’s housing crisis.
There is zero chance the UK will ever deliver 300,000 new homes per annum, or 1.5 million homes over five years, without a thriving volumetric modular sector. Volumetric is the only form of construction that can add additional capacity as it doesn’t draw upon the traditional trades. Volumetric does not compete with traditional construction, as traditional construction is incapable of meeting the demand for housing.
The debate needs to shift from “what went wrong” to “what support is required”. Beautiful, high-quality, environmentally-friendly volumetric homes can be seen right across the country today, and the sector is thriving outside of the UK as an important part of housing delivery.
We are way beyond this being an experimental technology. All that is required is a joined-up strategy from the government and collective resolve.
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