Top Hat chair Carl Leaver spoke before the House of Lords on government plans for standardised MMC, housing targets and the skills shortage
The Department for Levelling Up, Housing and Communities appointed a consortium in May to create standards for modular parts and buildings, as a method of driving innovation and promoting MMC in UK construction.
Speaking on Tuesday 24 October, Top Hat chair Carl Leaver criticised the plans, saying that: “the government doesn’t build houses, it’s not the customer, so defining the design standards, how they’re built, how they’re transported… that’s a centrally controlled economy – it’s very surprising to be facing that.”
Contrary to government plans, he warned that standardised MMC could reduce the industry’s ability to evolve and innovate: “We need a vibrant industry, an innovative industry that’s able to move at pace and fix problems and seek out further opportunities because we have a crisis.”
“Zero chance” of meeting housing targets without modular construction
Leaver also warned that due to the chronic shortage of skilled construction workers in the UK, there was no chance that housing targets would be met without modular’s production process.
Category one MMC, which is where three-dimensional units are manufactured in a factory and transported and combined on site to create a home, was identified as being crucial to delivering housing.
“I would say that without category one modular there is absolutely zero chance of building 300,000 homes in this country – I mean zero,” Leaver said bluntly.
“Before the global financial crisis there were 2.6m employees in construction, today that is 400,000 less and of that, about 500,000 – so nearly 25% – are over 55….These downturns are utterly devastating for SMEs and contractors,” he continued.
More certainty is needed to actualise modular’s potential
Committee chair and Conservative peer Daniel Moylan asked about the lack of success in MMC, such as the high-profile failings of Ilke Homes and L&G, to which Leaver attributed to materials and groundworks costs.
“We can control everything in a factory, but when it hits sites, that’s when things can go deeply awry,” he said. “When the wheels came off post-Covid and then more recently with the downturn, maybe both businesses made decisions to price very tightly to fill up their factory, and they didn’t take account… of the period of super-inflation… which made the projects they were now committed to unprofitable.”
All these factors made firms more vulnerable to the challenging economic backdrop, he added.
“Critical to the success of modular is that we get to scale and we have highly automated facilities – neither Ilke nor L&G were highly automated, incidentally […] if you have got scale and automation that means that these are really quite heavy investment and to pay back on those investments you need consistent demand.”
The “frankly very slow and somewhat dysfunctional” planning system had proven problematic
Michael Stirrop, chief commercial officer at housebuilder and Category 2 MMC (2D structural systems) developer Vistry Group, agreed with Leaver that the planning system was a significant constraint, with the implementation of the planning process at a local level proving problematic.
“It’s very difficult for us to build standard-form houses across the UK on a consistent basis,” he said.
“There’s no impetus in the planning world to push forward MMC schemes over traditional brick and build… [and ] there isn’t enough reflection on the embedded carbon that is attached to the houses we construct on an open panel basis.”
The full committee meeting can be watched on parliamentlive.tv’s archive.
