We are reaching a tipping point for off-site work

The old joke that everybody complains about the weather but nobody does anything about it could also have been applied to the lack of off-site manufacturing in construction.

We have been complaining about the slow progress for years and, while there have been many valuable investments in developing capacity, we have not been able to achieve the scale required to really move the productivity needle.

Not so anymore. There is real momentum building now, and this is attributable to several factors.

The publication in June of the Construction Leadership Council’s Roadmap to Recovery provided the strategy, articulating the need to increase off-site manufacturing and other modern methods of construction as part of the “Reinvent” phase of the plan.

The roadmap calls for a transformational adoption of digital and manufacturing technologies. This entails fully implementing a presumption of offsite, increasing the number of projects making use of off-site techniques, and increasing the proportion of pre-manufactured value within these projects.

We need to ingrain a manufacturing mentality – the assumption that work will be done off-site unless, for some compelling reason, it has to be done on-site

No objections there, but that requires some fundamental changes in the very culture of construction. We need construction firms to be involved early in the process so that the off-site elements can be integrated into the design, and designers need to adopt a more systematic approach to off-site early in the conceptual stage of their work.

Broadly, across the value chain, we need to ingrain a manufacturing mentality – the assumption that work will be done off-site unless, for some compelling reason, it has to be done on-site.

One significant aspect of culture is language, and we have got a whole new lexicon, including terms like MMC (modern methods of construction), DFMA (designed for manufacture and assembly) and PMV (pre-manufactured value), each potentially meaning something slightly different depending on your perspective.

Looking to the future, it would appear that PMV will be the main focus, but a standardised approach to defining it will be essential. We need to make sure we all mean the same thing when we use the term.

A key driver for the whole off-site movement is client demand, and public sector clients are increasingly showing leadership. For example, the Department for Heath recently confirmed that it will be working towards standardising the design of new hospitals to facilitate the use of modular methods. This means billions of pounds in the pipeline will be oriented towards increasing off-site construction.

Housing secretary Robert Jenrick announced that at least 20% of homes funded by a new £12bn affordable homes programme would need to be manufactured using modern methods. That off-site construction is being talked about at the secretary of state level is a very good sign, and the big investments needed to address the country’s housing shortage will provide valuable scale.

We at Wates have seen the benefits of public sector clients providing an impetus for more off-site. Having established our Prism off-site facility in Coventry, we sit on the government’s £3bn MMC framework and have delivered more than £900m of school projects over the past decade, now using our Adapt 3.0 “kit of parts” approach.

The requirement for 70% PMV does drive change, and I would expect to see the minimum PMV requirements for future public frameworks to increase, leaving behind those businesses that have not adapted to the new reality.

This evolving approach to public sector projects will be complemented by the introduction of the government’s “construction playbook”. This will build on the Cabinet Office’s broader outsourcing playbook, the latest version of which was released in June, which helps to clarify the working relationship between government as a client and its suppliers.

Signs are good for driving change, not just complaining about the lack of it

The construction playbook is likely to be made public in November and will effectively codify good practice in procuring construction, including incentivising the use of off-site. This is good, positive action, and I hope that we see consistent application of the construction playbook by clients across the public sector.

So signs are good for driving change, not just complaining about the lack of it – with client push, good procurement practice, and an emerging common framework all aligned. This will be particularly valuable for long-term planning and investing in the off-site supply chain. 

Joining up all the policy dots is key. In the context of the government’s commitment to build, build, build, we also have Project Speed and a significant pipeline for infrastructure and housing projects. Meanwhile, we also have ambitious net-zero carbon targets, and off-site will act as a catalyst by improving our understanding of, and accelerating the reduction of, whole-life carbon.

We also need to make sure that our investments in boosting off-site capabilities contribute to social value objectives as well. I would like to see more discussion about that and more ideas for how construction can support the “levelling-up” agenda.

For example, we could prioritise placing off-site facilities or temporary “pop-up” fabrication units near areas of social deprivation, to provide job opportunities where communities need them most. The government could incentivise such investments that have a levelling-up effect.

Even as the presumption of off-site becomes increasingly ingrained, we will need to be continually searching for better ways of doing it.

Sir James Wates CBE is chairman of Wates Group and the BRE