Lords committee says MMC failures due to ‘undirected’ government investment

A House of Lords committee has criticised the government for lacking a clear strategy on its investment in modern methods of construction. The Lords Built Environment Committee released its findings in an inquiry into what went wrong within the UK MMC sector, following the closure of L&G Modular and the collapse of House by Urban Splash, Ilke Homes, and Modulous. The inquiry launched in November 2023, was held in four sessions. Inquiry chair Lord Moylan has disclosed his findings in a letter to the secretary of state for Levelling Up, Housing and Communities. He said that, though millions of pounds of public money had been invested in MMC, it has “not been backed by a coherent strategy and set of measurable objectives”. The report said that barriers to MMC exist in the UK in the form of “resistance by planning officers and undue risk aversion on the part of warranty providers, insurance companies and banks”. However, the most compelling obstacle to MMC success was the lack of “clear strategy and a good understanding of how the industry operates” by the government. Moylan said: “We came away from our inquiry with the impression that the government had too easily accepted that undirected and nonstrategic investment of public money was the obvious way of providing this assistance. “We say that because the government has not set out clear objectives for the investments and funding it provided. Nor did Homes England give us any clear metrics as to how success (however defined) was to be measured and over what timescale.” The report did however find that modern methods of construction can have an important place in UK housebuilding, especially in the context of an ageing skilled workforce and the inefficiency of traditional housebuilding methods. Moylan stated this belief was based on the evidence the committee heard about its successful use in the non-housing construction sector, its widespread use in countries overseas and its potential to drive gains in efficiency and productivity identified by Homes England and others. The report suggested the government find ways to encourage successful modular housebuilders from overseas to establish themselves in the UK. Moylan said the government should publish its full strategy for MMC now or, if it requires updating, by no later than the end of March 2024, as the committee has limited confidence that a coherent plan to encourage the use of MMC is in place owing to the absence of its publication. The committee also called for the government to publish the data it has already committed to in the Homes England strategic plan, and in its response to the House of Commons’ Housing, Communities and Local Government Committee, by the end of March 2024. In particular, it said the government should publish data on the share of supported completions using MMC in the Affordable Homes Programme as soon as possible. Carl Leaver, chairman at modular housebuilder TopHat, said: “The conclusions of the Lords inquiry into modular construction are clear: it is a sector of importance and great value which has not had the support it needs. “Yes, there have been missteps in policy and some regrettable business failures, but innovation always carries uncertain outcomes and inevitably involves some risk. “The UK will never build 300,000 homes a year without volumetric modular and so it is critical that the government supports the sector strategically to allow investment to return and bring the sector to scale.” To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @AkankshaEG or @EGPropertyNews Photo © Tomas Anunziata/Pexels