Has MMC gone from an industry salvation to a pseudo solution?

During the early days of the pandemic, when the country desperately needed ventilators, vaccines and treatment units, one of the most impressive parts of the NHS response was the delivery of new medical facilities built quickly, efficiently and effectively offsite. Much of this was made possible because of the use of modern methods of construction (MMC) and modular construction techniques.

Since we returned to business as usual and the years have passed, however, the love affair with MMC appears to have faded – with those early investors pulling backing, licking their wounds and paring down manufacturing facilities. You would be forgiven for being a little perplexed about why.

Safer, greener, faster – it looked like the solution to all our productivity woes. A market report by my own firm Gleeds, published in 2020, found that 75% of contractors at the time were looking to incorporate greater use of MMC on projects in the wake of the pandemic. In the same year, Mark Farmer called for the government to set a target of delivering 75,000 modular homes per annum by 2030. So, what happened?

Some might argue that it was always a fad, highlighting that MMC is just the latest label for an idea that was first called for by the likes of the architect Walter Gropius in 1910

Despite a lot of positive rhetoric since then, it would appear that progress has been minimal. Some might argue that it was always a fad, highlighting that MMC is just the latest label for an idea that was first called for by the likes of the architect Walter Gropius in 1910.

He wanted to mass-produce standardised components that could be slotted together like a jigsaw in the years before the First World War. Given that the concept did not take off in the subsequent hundred years, are we so surprised that this latest construction revolution appears to have stalled?

According to Make UK Modular, just 3,300 modular homes were delivered in 2022 and a damning letter from the House of Lords built environment committee published recently said that the government’s approach to MMC had fallen into “disarray”, with millions of pounds wasted because of a lack of coherent strategy and measurable objectives.

Should we be surprised? When we have seen 16 housing ministers come and go since David Cameron became prime minister, the Conservatives should shoulder some of the blame themselves.

Apart from having no discernible commitment to construction as a whole, there have been warm words but no tangible backing and direction from No10 towards the adoption of MMC as a specific construction technique. Their own taskforce on the topic, set up in 2021, has no chair, has never met, and is yet to spend any of the £10m it was allocated… hardly actions in line with their claim that “supporting the MMC sector is a priority”.

In recent months we have seen the failure of a host of modular developers including former Make UK Modular member Ilke Homes, and the list of casualties continues to grow. Modulous is the latest firm to announce that it has gone into administration, while Laing O’Rourke also recently confirmed that it was axing 60 jobs from its offsite arm.

Unless we see a significant shift in approach and a real commitment from the government to understand the barriers for companies looking to enter the market, I cannot see how disaster can be averted for MMC in the UK

Factory overheads, a lack of secure pipelines, inflationary pressures and a shortage of skills and expertise have all been identified as contributing factors to the lack of progress in the MMC sector in the UK, alongside risk aversion on the part of warranty providers, insurance companies and insufficient clarity for building regulations.

Unless we see a significant shift in approach and a real commitment from the government to understand the barriers for companies looking to enter the market, I cannot see how disaster can be averted for MMC in the UK. Even the larger volumetric builders are struggling to stay afloat, and there is no sign of new money coming in to steady the ship.

The Lords built environment committee chair Lord Moylan rightly noted that large housebuilders in the UK have shown limited enthusiasm for embracing MMC, leaving its progression to an ever-decreasing number of small and medium-sized enterprises that are ill-equipped to shoulder the burden if investors get cold feet.

>> An alternative view: Industry transformation is complex and needs to be treated as such

Companies bold enough to enter the market find themselves in a chicken and egg scenario. If they were able to attract the investment needed to scale up production, they could maximise MMC’s potential – plugging the gap in the housing market, condensing project timelines across the board, reducing labour costs, improving efficiency. But no one wants to be the first to stump up the cash that would allow them to grow, so all too often these firms simply sink.

Sadly, without some transformative action from the government, MMC looks like it may have been just another pseudo solution from disinterested and ill-informed ministers and an industry not wanting to take the risk in uncertain times.

Richard Steer is chairman of Gleeds Worldwide