This last point is of particular worry; driven by Brexit and the pandemic, the labour supply has dropped 10% over the last three years. Furthermore, over 500,000 UK-born construction workers in are expected to be retiring in the next 10-15 years. This all raises the question: will we ever be able to get the capacity we so desperately need?

MMC can help address some of these challenges, but the adoption of these methods is hampered by a lack of awareness and understanding amongst developers. There is a general perception amongst some that MMC is synonymous with volumetric modular construction. This overlooks the six other ‘modern methods of construction’ such as pre-manufacturing of 2D structural systems, additive manufacturing (3D printing), and process-led improvements to productivity and quality assurance.

CAST generally utilise a “Pre-Manufactured Value” (PMV) scoring system for projects that helps to demonstrate the benefits of MMC to clients and the industry as a whole. Simply, the PMV is the value of works delivered offsite (including components) divided by total construction costs. Michelle explained that theoretically, a wholly manufacturing-based approach would deliver optimum value but due to site and project constraints it’s not always possible. Therefore, PMV should be optimised for a particular project, not maximised and CAST have developed a tool to analyse this.

Michelle demonstrated that for completed projects, there are strong negative correlations between cost movement and programme movement versus PMV. Equally, there strong positive correlations between productivity and speed versus PMV. To put it another way, projects with a higher Pre-Manufactured Value are quicker, more productive and more predictable.

One of the challenges for MMC is increasing buy-in from developers. CAST undertook a survey of developers and found that a quarter are aiming to deliver at least 50% of their future schemes using at least one modern method of construction. However, many also noted the barriers to adopting MMC including higher capital costs, procurement challenges and mortgageability issues.

Another major challenge is that – while we have seen a large amount of investment into the MMC sector in recent years – many new entrants are now moving away from MMC after failing to fully mature. At the same time, contractors are beginning to grasp the opportunities presented by MMC; 70% say that they are unable to find sufficient skill-based site operatives and partnerships with manufacturers offers an alternative route to delivery.

Michelle then presented a number of interesting case studies with medium and high PMVs, concluding that the opportunity is there for MMC to resolve many of construction’s biggest headaches, however MMC itself comes with a set of new challenges. This set the scene for a roundtable discussion, exploring these challenges in further detail.

One of the challenges faced by manufacturers is managing their order book to ensure a consistent pipeline. Unlike traditional methods of construction, it is not economical for manufacturing work to flex up or down depending on demand. Companies which are integrated manufacturers and contractors can mitigate this to a large extent as they create their own work, creating a greater degree of certainty over cost and labour.

Many developers currently prefer to package the whole works – i.e. including the groundworks – into a single instruction. This has historically been a barrier for manufacturers, but they are increasingly tailoring their offer to respond to this. They are taking on more risk and helping to grow the sector by alleviating this barrier.

Is there a minimum scale before volumetric becomes feasible?

Some schemes have been as low as 60-70 units. Ultimately, it comes down to the client and how much they are willing to spend. Generally speaking though, around 150 units is the threshold.

Standardisation is the key to efficiency. Even with a 150 unit scheme, it could be designed with 40 slightly different bathroom types. In a factory, slightly different is still different and that increases costs.

What are the policy challenges for MMC?

Using BTR as a yardstick, there are still not many policymakers that fully understand the concept of Build to Rent, even despite its growth over the past decade. There are still a lot of planning officers and elected members that do not understand the benefits of MMC as well. There is stigma around MMC and development in general – people think it is to save money and reduce quality when in fact it is the reverse.

One panellist noted that MMC needs to be acknowledged in the planning process. Jobs are contingent on continual receipt of orders and they suggested that there needs to be a taskforce or planning acceptance of MMC to deliver its potential as a major driver of economic growth.

It was also noted that at policy level, most politicians believe that the traditional, listed housebuilders are the answer to delivering targets. Unfortunately, housebuilders are the least adoptive of MMC. Meanwhile, there is still a stigma in the press and from politicians, perhaps most evocatively illustrated by the perception of MMC as synonymous with “pre-fab homes”.

What are some of the ESG benefits?

One of the panellist pointed to studies recently undertaken in collaboration with universities which illustrated a reduction in carbon of up to 40%, primarily driven by the reduction in concrete, reduction in steel and fewer vehicle movements.

In theory, it easier to maximise air tightness in the factory and improve construction quality, both of which assist with the reduction of operational carbon. There are also other benefits around moving construction jobs to factories rather than sites, including from a social, mental health, safety and work-life balance perspective.

Is it a risk for developers that manufacturers will go bust during the project?

It is always risk but a lot of manufacturers’ processes are very similar, with slight nuances. Where projects are under construction, this is a real risk because it is not easy to do this. For MMC to succeed, we can’t let manufacturers go bust and we need to invest in them.

What can we do to address challenges with system builds, particularly considering perceived to be risky solutions such as CLT?

Education is a key part. There is an NHBC process that will be available and, fundamentally, NHBC will need to get comfortable with it. Most BTR providers will also want flexibility to get a warranty and mortgage on to enable future sale.

How many homes could we build with MMC against the 300k target?

At current capacity, we are in the realms of tens of thousands rather than hundreds of thousands, to showing that we need a range of solutions rather than a silver bullet. We need creative consultants and architects to take this seriously.

Some housebuilders – notably Berkeley Homes – are starting to take this seriously as well primarily driven by labour shortages rather than cost control.

Roundtable Discussion 2

Following the first roundtable, the focus shifted to Canary Wharf and the creation of great places. Stephen Cherry of HCL Architects started by providing a fascinating insight into the challenges and successes encountered throughout the course of designing and building Newfoundland.

Simon Saint then moderated a discussion with: Liam Singh, Principal, Investments at Crosstree Real Estate Partners; Stephen Cherry, Managing Director at HCL Architects; and Freya Richard, Director of Leasing and Operations at Vertus.

Canary Wharf’s evolving role as a destination was discussed, as was the progression of Canary Wharf Group’s activation strategy over the years. Infrastructure changes, such as the installation of a new bridge across Middle Dock has helped to ‘unlock’ areas of the estate. However, CWG still face challenges when it comes to altering people’s perception of Canary Wharf as a “haven for bankers in suits” towards a mixed community and entertainment destination.

At a building level, community building also forms a large part of the focus for Vertus. This is delivered through a strong onsite team and careful consideration of the customer experience. One of the earliest decisions that the design team made was to use the bottom three floors of Newfoundland for amenities and community spaces.

The wider connection to the Canary Wharf estate is also a notable benefit as it allows for a joined-up approach to customer experience but also, Vertus encourage residents to engage with the experiential and retail uses across the estate