Government’s plans for MMC in ‘disarray’, says Lords committee

The government’s attempts to promote the use of modern methods of construction (MMC) are “in disarray” and in need of a coherent strategy, according to the House of Lords built environment committee. 

In a letter to the Department of Levelling Up, Housing and Communities (DLUHC), committee chair Lord Daniel Moylan posed a series of questions about the government’s plans for the sector as well as some recommendations. 

The committee, which began its inquiry after the closure of L&G Modular and the collapse of House by Urban Splash and Ilke Homes, accused the department and its executive non-departmental body Homes England of lacking a strategy of any kind against which to measure success. 

Speaking yesterday in advance of the letter’s publication, Lord Moylan told Housing Today that when the committee asked Homes England for its strategy, it was told it was “distributed across a number of documents and would be hard to put together”. 

The committee called for the government to publish its strategy now or, if it requires updating, by no later than the end of February. 

It also recommended that MMC requirements within the Affordable Homes programme be more targeted at category one and two MMC and asked the government what had become of the government’s MMC taskforce. 

Announced in the March 2021 budget with the purpose of taking forward work on data and standards, no chair was ever appointed to the taskforce and it has never met or spent a penny of its allocated £10m. 

Lord Moylan told Housing Today that he had not given a view on whether the government should continue with its promotion of MMC, but that if it did it would need to provide an explanation of its reasons. 

“If [MMC] doesn’t fly off the shelf after 10 years, maybe it is not the right answer,” he said. The government needs to look at that […] sometimes persistent failure has an explanation, it’s not just because you haven’t tried enough.  

“But we do believe that once you’ve decided what your objective is, he government then has to look at what the barriers to it are. And they aren’t always necessarily financial.” 

Moylan said some of the obstacles mentioned by witnesses during the inquiry were risk aversion on the part of warranty providers, insurance companies and insufficient clarity for building regulations. 

During its inquiry, the committee was told by housebuilders that had worked successfully on MMC housebuilding elsewhere in Europe that there were barriers to entry to the UK market. The committee has asked the government whether it believes this is the case. 

“We think there should be more competition and that there should be more capital introduced to the industry,” said Lord Moylan, noting that this was unlikely to come from SMEs given the gradual consolidation of the sector over the past two decades. 

>>See also: What went wrong for Ilke Homes?

>>See also: ‘It’s been a torrid time’: Modulous boss Chris Bone on the offsite housing firm’s collapse

“New entrants would be a good thing and they’re no longer coming from small and medium enterprises growing, because they’re shrinking. 

“So one way in which you could both stimulate competition and grow the capacity of the industry to create new homes is by having more house builders with experience elsewhere coming into the UK market.” 

Moylan expressed scepticism about the enthusiasm of large housebuilders for MMC, saying it was “clear from their behaviour that they are not actually embracing it”. 

He noted that none of those invited had come to give evidence, with only Barratt provided evidence of any kind, in written form. 

“The question is what lessons should we learn from the fact that after 10 years, at least category one volumetric is in retreat, having not actually made very much of an advance in the first place,” said Moylan.  

“There is not sign of revival, there is no sign of new capital coming to pick it up where it has fallen off, so what are the lessons the government should we learn from that?” 

In its written evidence to the enquiry DLUHC and Homes England said they consider “supporting the MMC sector a priority”. They said: “The government believes the potential benefits of MMC have not yet been realised because the sector has not reached scale. We are focused on removing barriers to growth that will support the sector to increase demand, reduce cost and enable it to grow organically.”

A DLUHC spokesperson said today in response to the report: “We are committed to supporting the MMC sector and tackling the barriers to growth it faces.

“Our £11.5 billion Affordable Homes Programme is helping to deliver MMC homes, while the £1.5 billion Levelling Up Home Building Fund includes financial support for MMC manufacturers. We are also developing a Publicly Available Specification for MMC with the British Standards Institution.

“We will consider the Lord’s recommendations and respond in due course.”