Modern Methods of Construction – time for some honesty?
Synopsis
There is a growing body of experience of MMC in the social housing sector now, with a number of Registered Providers in the North having conducted pilot projects, large and small. LHC has worked on hundreds of projects for social landlords all around the UK, totalling more than 5,300 homes to date.
However, it’s hard to escape the unspoken political pressure to present success and ensure the MMC story is a wholly positive one. So are we at risk of missing out on the detailed learning about mistakes? Registered Providers want to know what worked well, but also what the MMC pioneers would not do again, so they can avoid the same problems.
Gary Cawley, director of CPC, says it’s time for a bit of straight-talking Northern honesty. He shares the top five ‘lessons learned’ from the aggregation of MMC projects managed by LHC to date, explains how working with CPC can overcome barriers for local social housing clients, and calls for continued collaboration by local housing groups to help reduce risk and build confidence in MMC housing in the North.
Modern Methods of Construction – time for some honesty?
Gary Cawley, Director, North & Central England, CPC
Let’s face it. If you’re a small or medium sized housing association or social landlord, you are not going to want to be an early adopter. Trailblazing in the North for all to see? No, I don’t think so, despite all the marketing blurb about ‘innovation to meet local need’.
Specifically, I’m talking here about MMC (Modern Methods of Construction, aka offsite construction, near-site pre-manufacturing, or their close cousin, Design for Manufacture and Assembly). Yes, social housing development directors, this piece is targeted straight at you.
Because, when it comes to trying new construction methods for your development programme, any sensible Social Housing Provider is going to let other, bigger players take a lead, incur the cost of innovation, make all the mistakes and establish a robust supply chain with plenty of experience and useful lessons that you can tap into later.
We all get that. But what happens when the Board keeps muttering about risk, political pressure to promote MMC and ‘falling behind the curve’? From their point of view, the market is changing beyond recognition, facing new pressures post-Brexit and post-Covid, and everywhere they look there is news of another MMC social housing project.
Each one is being celebrated as faster, cheaper, safer and more sustainable than the last. There is talk of setting up local housing factories and delivering shed loads of social value, and it all sounds so easy. MPs and Mayors line up in their hard hats to have their photos taken next to the latest MMC project, and everyone declares everything as a resounding success.
But sorry, I think it’s time to be brutally honest here. Nobody’s talking openly about the costly failures, and the lessons from the bigger providers and MMC pioneers are not being shared openly with other Social Housing Providers in the region.
What about that housing association project that started off as a MMC development of two bungalows on a small infill site, then got reconfigured as three houses and ended up as four flats, with 18 months spent going through planning three times and over £500K of abortive design fees?
What about the housing association that identified a wonderful city centre site for a MMC pilot, acquired the land and planning permission for a great design based on volumetric construction, only to find out too late that a couple of low railway bridges on the main route into town meant that no lorry load of beautifully shrink-wrapped pods was ever going to make it within a mile of the site?
I really do think it’s time that organisations like my own spilled the beans on what we know now, about what works and what doesn’t. So this is what I’d like to do here today.
CPC is a partnership between public sector procurement experts LHC and Northern Housing Consortium. LHC has a long heritage in MMC – it was formed over 50 years ago to coordinate industrialised building programmes across London.
Tracy Harrison, Chief Executive of NHC said “NHC has a similar commitment to MMC as we have consistently promoted modular construction matters in the north in order to ensure that our communities get levelled-up and that the region fully embraces all the technological and climate-led opportunities MMC has to offer. This is because now is the time to be ambitious and only we can help change housing for the better.”
We have more than 5,300 MMC-built social homes under our belt. Right now, we are working with 46 Social Housing Providers on projects with 12 MMC-specialist companies.
So we do have tales to tell and lessons to share, if you’re willing to hear them.
Here are my top five for starters:
- First, make sure you pick a MMC manufacturer who knows what they’re talking about. Unfortunately, the high-profile manufacturers the Board is always reading about are not always the best. You’re looking for a business that has got a solid track record and has been through proper technical checks and financial due diligence (ideally, someone who’s made it through the rigorous vetting process to get onto a LHC framework).
- Then tear up the old, single stage tender process for design and build. You are going to need a two-stage tender process, with an initial pre-contract service agreement with a MMC supplier who can help you with a proper site investigation, designs and budgeting, and with whom you can go through planning together. Through a better approach to sharing and minimising risk, you’ll reap significant benefits later on.
- Understand that you are going to need to work in a completely different way to before – it’s a re-education process for you as a client, as MMC requires a change in the way homes are designed, procured and delivered. This means getting your MMC supply chain involved at the very earliest stages, well before design and planning, even before Stage 1 of the RIBA Plan of Work. Stay open to the MMC manufacturer’s ideas on design. I heard a great example the other day, of a closed panel system manufacturer who saved one of our social landlord clients £200K a year, just simply by agreeing optimum floor to ceiling heights for walls, standardising designs in a way that hugely reduced plasterboard waste.
- Don’t pick that most difficult design / the most difficult site / the project that nobody else wants to do, and think that a MMC pilot on that site is going to solve everything for you. The truth is, you need clear advice tailored to you, built on trust and informed by third-party technical expertise from your suppliers and coordination by your procurement advisers. Start with small steps, and make sure each project manager passes on their knowledge to the next.
- Of course, carbon reduction and thermal performance targets are vital. But redefine your parameters for ‘sustainability’ to look beyond the environmental impacts, towards the economic and social sustainability that you can also build into a new, long-term relationship with a MMC supply chain which can grow with you and support you through the decades to come. Framework agreements allow these relationships to flourish over a longer-term period and help set out an integrated supply chain, without bumping up against any legal problems for your procurement team. And if you can’t find such a supply chain locally, then work with us to design a new framework that flushes out the best in the market for you to choose from.
MMC is still seen by many in this region as an expensive luxury, particularly regarding a high initial project cost. Some feel that because of this, MMC is an unviable option for the public sector.
However, in reality, we know it’s working well for our social housing clients and we are able to share their learning very openly. MMC homes have lower overall lifecycle costs; project delivery is much faster so you’ll see the sales or rent revenue much earlier. The message still needs to get through to social landlords that MMC homes also benefit from reduced maintenance costs thanks to the build quality. And as more MMC homes are procured, the additional volume of work results in an economy of scale; costs are likely to come down further as the market continues to mature.
My rallying call to social landlords in the North is to tap into the expertise and experience that CPC and NHC can provide you for free. It’s right here on your doorstep. And we will tell it as it is, so that you can dodge the risks, keep the Board happy and progress your development plans with confidence.
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NHC Construction Steering Group
MMC working group
