MHCLG has recently announced a £8.6 billion funding package to build almost 120,000 new affordable homes in England as part of the £11.5 billion Affordable Homes Programme from 2021-2026.
The Programme's promotion of Modern Methods of Construction (MMC) in housebuilding is to be welcomed and its use of Pre-Manufactured Value (PMV) to calculate MMC credentials gives a clear framework for measuring progress. But is the seemingly weighted promotion of volumetric and panellised systems above other MMC methods a lost opportunity for boosting Platform construction?
Housing, Decarbonisation and MMC
The potential economic, social and environmental benefits of MMC are widely recognised. Yet perceived barriers (in particular, concerns around cost, skills, and fundability) continue to hinder take up of MMC at the volume and scale needed to really revolutionise the industry. Recent Government support for MMC could help turn the tide.
With the housing shortage and decarbonisation of the built environment still high on the political agenda and the deadline for all new homes to be “zero carbon ready” by 2025 edging closer, the Government is seeking ways in which housing policy can more actively promote or incentivise the adoption of MMC:
- In March 2021, the Government announced the launch of an MMC task force, with £10m seed funding and a remit to accelerate the use of MMC – Budget 2021: Will the new MMC Taskforce help solve the housing shortage?;
- the Construction Playbook launched last December encourages a focus on outcomes and MMC (particularly Platform solutions) in public procurement;
- Homes England’s study with Atkins is testing the performance of a range of MMC solutions over the long term;
- MHCLG's recent consultation on The Future of the New Homes Bonus scheme from 2022/2023 onwards considers incentivising homes built using MMC methods via an MMC condition on receipt of funding and a premium for MMC;
- the International Standards Organisation (ISO) is to develop standards for the adoption of prefabricated buildings in the UK; and
- the Affordable Homes Programme 2021-2026 has made adoption of MMC a condition of its strategic partnership grant programme.
This my all help drive developers and house builders to commit to MMC solutions but to keep momentum and ensure the whole industry can benefit we should not focus only on the big ticket wins of volumetric construction.
Affordable Homes Programme and MMC
The Affordable Homes Programme provides grant funding to support the capital costs of developing affordable housing for rent or sale (Apply for affordable housing funding - GOV.UK (www.gov.uk)). Outside London, funding will be delivered by Homes England, with the Greater London Authority responsible for delivery in London.
The Programme aims to boost the delivery of affordable housing supply by way of strategic partnerships and continuous market engagement (CME).
MMC is a key part of this Programme:
- Strategic partnerships appointed to deliver the Programme are expected to “focus on promoting significant use of Modern Methods of Construction (MMC), high-quality sustainable design and working closely with local small to medium-sized enterprises (SME) housebuilders.”. This includes a commitment from strategic partnerships to deliver a minimum of 25% of homes using MMC; and
- Where the CME route applies, MMC will be considered as a strategic priority in the assessment of bids.
To determine the proportion of homes being delivering using MMC, the Government has adopted Pre-Manufactured Value (PMV) as a key measurement metric of its Affordable Homes Programme. But was does this mean?
What is Pre-Manufactured Value (PMV)?
PMV calculates the proportion of a building’s construction that takes place offsite or near-site. It is a weighted calculation that rewards the proportion of a home that has been constructed offsite or near-site, measured as a percentage of the total.
Under the Affordable Homes Programme, homes will only meet the requirement of being delivered using MMC if they have a PMV score of 55% or more.
How is PMV measured?
PMV is calculated using any of the following seven categories of the MMC Definition Framework, measured as a percentage of the total:
|Categories of MMC|
|Pre-Manufacturing led approaches||Category 1||3D primary structural systems|
|Category 2||2D primary structural systems|
|Category 3||Non-systemised structural components (structural assemblies and sub-assemblies)|
|Category 4||Additive Manufacturing|
|Category 5||Non-structural assemblies and sub-assemblies|
|Site Process led approaches||Category 6||Traditional building product led site labour reduction / productivity improvements|
|Category 7||Site process led labour reduction / productivity improvements|
(Modern Methods of Construction working group: developing a definition framework - GOV.UK (www.gov.uk))
Whilst MMC categories 3 to 7 form part of the total PMV score, categories 1 and 2 (volumetric and panelised systems – e.g. structural systems such as timber frames, SIPS, panellised systems, or volumetric ‘pods’) offer the highest PMV.
The assumption then is that this weighting could incentivise the use of volumetric and panelised structural systems ahead of other MMC solutions.
But is this the correct approach?
Limitations of volumetric solutions
Whilst there is certainly a place for volumetric solutions, we should not overly rely upon volumetric solutions to deliver the full potential of MMC.
Volumetric MMC often raises a range of concerns around transport logistics (and associated NetZero concerns), supply chain capacity, high capital costs and 'up front' expenditure, the lack of flexibility in early design freeze, and notably the over-reliance on one manufacturer can cause solvency concerns for funders and insurers.
Platform P-DfMA overcomes a number of these issues.
The case for Platform P-DfMA and interoperability
The PMV weighting of volumetric and panellised systems above componetised systems could be a real lost opportunity for the uptake in a Platform approach.
The use of Platform P-DfMA systems – sets of standardised and interoperable products, components and assemblies from a variety of suppliers that can be assembled in different ways to create different building configurations at initial construction or over a building’s lifetime - can hugely improve a building’s sustainability credentials and maximise re-use (key to of the Government’s Construction Playbook and #Net Zero objectives), create economies of scale, and improve health and safety, build quality and whole lifetime cost and operational performance.
Notably, standardisation and interoperability can also help to build confidence of mortgage lenders and insurers by providing comfort that components can be swapped out as required without over-reliance upon one single manufacturer or supplier.
The Construction Innovation Hub is working in partnership with Government and industry to develop a platform construction system consisting of a standardised kit of parts to deliver social infrastructure buildings.
The huge benefits of the Platform approach in maximising the use of MMC by “harmonising, digitising and rationalising demand” and adopting a common approach across the public sector pipeline are recognised in the Construction Playbook.
The Construction Playbook envisages that the public sector will:
"look to procure constructions projects based on product platforms comprising of standardised and interoperable components and assemblies, the requirements of which will be part of a digital component catalogue" and that "future procurements and frameworks should support this with the development of a market and supply chain that can develop and deliver designs based on these platform approaches, manufacture and supply components, and innovate to improve and develop these over time."
The Affordable Homes Programme is a golden opportunity to support this approach and "build back better".
The Government’s promotion of MMC is to be welcomed and the use of PMV gives a clear framework for measuring progress. However, the real potential of MMC can only be fully realised through standardisation and interoperability - this should not be forgotten in the measurement of value.
"Housing Secretary Robert Jenrick said: “Creating more opportunities for home ownership is central to this Government. This £9 billion funding is a landmark moment for our affordable homes programme and will ensure good quality housing for all as we build back better after the pandemic."