Where are all the techno-homes?

At first sight, the Challenge Fund has delivered. Launched in September 2002 in response to the South-east’s housing crisis, it offered hundreds of millions of pounds for schemes that could be delivered quickly and efficiently. A quarter of them had to use modern methods of construction such as off-site manufacture – a radical target designed to encourage use of the new techniques.

Housing associations were galvanised into starting 8400 homes within a year of the fund’s inception and, as hoped, more than a quarter of them were being built using modern methods of construction. And the way the fund encouraged associations to work with the Housing Corporation led directly to the development partner system of corporation funding introduced last year.

But this isn’t the full story. The Challenge Fund was supposed to – in the words of corporation deputy chief executive Neil Hadden – secure a “step change in the construction industry” with regards to modern methods. Almost two years on, however, off-site construction is still waiting to take centre-stage.

Modern methods are not yet cheaper or demonstrably quicker than traditional building, and there has been little take-up from the private housebuilders that control the bulk of development in the country – which would be the key factor in reaching the volume of homes that would start to get prices down. In the mean time, the affordable housing industry’s first genuine attempt to satisfy the deputy prime minister’s desire for modern methods – the Amphion off-site manufacturing consortium – failed because of lack of demand.

And although the Challenge Fund did appear to hit its target for 25% of schemes to use “modern methods”, anecdotal evidence suggests most of this was done by using pre-built open timber frame technology, a method that has existed for at least three decades. Hacas Chapman Hendy has been compiling a report on the Challenge Fund for the government.

A report published last month by the government’s design watchdog, the Commission for Architecture and the Built Environment, found the fund had not encouraged innovative use of modern methods, and found no examples of outstanding design.

It concluded that, although the Challenge Fund did raise awareness of modern methods in the social housing sector, the definition was interpreted very modestly. Of the 10 Challenge Fund sites CABE looked at, six used open timber frame systems and none used the more ambitious “volumetric” off-site systems such as those made by Space 4 and Yorkon, where entire homes are built in factories and transported to site fully formed.

A major reason for these disappointing results is that, from the start, the Challenge Fund’s twin aims of speed and innovation were incompatible.

When housing minister Lord Rooker launched the fund, it was a £200m pot designed to help along the building of 4000 homes, a fifth of them by March 2004. It mushroomed, though, ending up as a £300m scheme to be on site by 31 March this year.

From the outset, modern methods of construction were stated as a principle aim, but so was the stipulation that the projects should be done quickly.

By definition, these were mostly developments that were already underway – the wrong time to start insisting on using different building techniques.

CABE’s report said the objectives of the scheme, with its stress on speed of delivery, “encouraged RSLs to opt for systems that met the need for short-term speed gains – inevitably, systems requiring less research.” Crucially, these weren’t systems that would be likely to effect industry change.

“The way the fund was set up mitigated against design,” says Mairi Johnson, senior enabling adviser at CABE. “In fact, it set itself up in the most difficult situation to encourage modern methods.”

The way the fund was set up mitigated against design. It was set up in the most difficult situation to encourage modern methods.

Mairi Johnson, CABE

Although all the housing associations contacted by Housing Today welcomed the extra cash from the fund, their experience with modern methods was much more patchy.

Registered social landlord Catalyst Housing Group has already finished 96 of 229 units under the fund and group director of development Julia Moulder backs up what CABE’s Johnson says. “We were given a very tight delivery timetable,” says Moulder. “There was no advantage to us in switching to an off-site manufacturing solution; it would simply mean delay and more cost to re-do work already done, and for what purpose?”

Hyde Housing Association got £24m from the Challenge Fund but development director Mike Kirk says: “Very few schemes ended up being what I’d call genuine modern methods of construction. It was pretty clear we got funding for schemes because we had planning consent and could deliver, that was the main criterion in the end.”

The long-term gains from modern methods – in side-stepping the skills shortage and increasing quality – are still some way off.

But Joe Gonzalez, senior procurement officer at the Housing Corporation, says the sector should be using them anyway: “It’s like if you’re training for a marathon. If you want to get up to peak fitness, you’ve got to put the miles in while it still hurts.”

The other principal problem with the Challenge Fund was that many of its schemes are being delivered via planning gain agreements, where a council insists that a developer offers a proportion of the houses on a site to housing associations in return for granting planning permission.

This can mean the RSL has little control over the construction methods used, as Acton Housing Association found. It is building 360 homes with £17m Challenge Fund grant and has had to work under a planning gain agreement on three of the four sites, so it had little control over the methods used.

Assistant development director Danny Lynch explains: “Some developers might give us timber frame, but essentially we get what we’re given. We try to encourage them but the developer’s going to do what it’s always done.”

It looks as if the Housing Corporation, which distributes the Challenge Fund through its approved development programme, is willing to make the need for more, good quality homes a priority over the desire for modern building methods.

At the International Building Press summer dinner last Thursday, corporation chief executive Jon Rouse joked: “Is a builder wearing a Gucci t-shirt a modern method of construction? I don’t know but we’ll take it.” He was making a serious point – building much-needed homes is ultimately more important than getting hung up on artificial targets for new methods.

There are 8400 homes under construction, many of which would never have been built without the Challenge Fund. However, John Prescott should not ignore the strong message from the industry that modern methods are a long way from being the immediate answer to the housing crisis.