Chapter 2: The case for off-site manufacture for construction
Definition and scope
14.Off-site manufacture for construction (OSM)16 is an example of a modern method of construction or smart construction. Modern methods of construction and smart construction are used by the sector to describe manufacturing methods that harness digital techniques and Building Information Modelling (BIM), and encompass methods other than off-site manufacture. Off-site manufacture is not new: in 1624 Massachusetts settlers built homes out of prefabricated materials shipped from England.17 However, emerging digital technologies have the potential to transform off-site into a more viable alternative to on-site construction, where appropriate.
15.Off-site manufacture is an umbrella term encompassing many different systems. Tony Meggs, Chief Executive of the Infrastructure and Projects Authority, explained that “At some level, a brick is a piece of off-site construction, and we can mean different things when we talk about it”. For the Government’s “presumption in favour” of off-site construction to be understood clearly, we agree with Tony Meggs that “it would be helpful to introduce some real taxonomy here to clarify it”.18
16.Kier Construction Ltd defined off-site manufacture for construction as “the design, planning, manufacture and pre-assembly of construction elements or components in a factory environment prior to installation on-site at their intended, final location”.19 For the purposes of this report, we have defined off-site manufacture as any of the following methods (the list is not exhaustive):
- Components of the building manufactured off-site and then brought together onsite, such as columns, floor slabs and beams. This includes precast concrete.
- Two-dimensional panelised construction, where structures are designed and manufactured in wall and ceiling panels off-site then joined together onsite.
- Elements of buildings sub-assembled off-site. This is where essentials, such as plant-rooms or bathroom pods, are manufactured in a factory.
- Buildings manufactured volumetrically, or in modules, where whole segments of the buildings are manufactured three-dimensionally and assembled off-site then the completed modules are fitted together onsite.
These methods can also be applied to economic infrastructure projects, such as roads, bridges and utilities.
17.The common thread among these different OSM options is that they require everyone involved in the project to think in terms of Design for Manufacture and Assembly from the start of the project. While we have focused on off-site manufacture, these methods cannot be considered in isolation. They are part of the wider digitalisation and innovation agenda in the construction sector.
Benefits of off-site manufacture
Quality of buildings and infrastructure
18.Much of the evidence we received referred to the benefits of off-site manufacture in creating better-quality buildings and infrastructure, produced to more consistent and testable standards. Professor Jeremy Watson, Vice-Dean of Engineering Sciences and Professor of Engineering Systems at University College London, told us:
“In a visit we had the other day, visitors observed cracks in the traditionally built buildings after three months, but the ones that were made off-site fitted perfectly, exactly because the pieces were designed according to manufacturing techniques.”20
19.Low Carbon Journey explained that off-site manufacture leads to better-value buildings and infrastructure, where value is defined as a combination of:
“Product quality, ability to design and model performance including fabric, ventilation and climate risk, and including elements within the factory process that would be difficult or more expensive to install on a site due to traditional manual processes.”21
20.Standardisation of modules or components within buildings and infrastructure can improve the quality of those components through an iterative process of analysing performance data and making changes for future components. Dr Mark Bew, Chairman of PCSG Ltd, told us:
“We understand very little about how these assets perform, either physically or from a consumer point of view, and the more data that we can gather on that and the more analytics that we can do, the more we can learn.”22
21.For this iterative process to work, digitalisation is key. Andrew Wolstenholme, Co-Chair of the Construction Leadership Council, said, “Unless you digitalise at the front end, you lose the opportunity, first, to improve productivity through the delivery, and, secondly, to introduce smart technologies, monitoring and datasets to the life of that asset”.23 This requires the construction project to be approached as a whole system from start to finish, rather than as a set of discrete steps.
22.UK Research and Innovation told us that digitalisation is invaluable for improving the safety of buildings and infrastructure “through more robust certification of components and standardised systems of assembly, tracked through digital models”.24 The review commissioned by the Government following the Grenfell Tower tragedy, Building a Safer Future: Independent Review of Building Regulations and Fire Safety25 (the Hackitt review), made a similar point: “Over the longer term, it is expected that the changes set out in [the report] will lead to the greater use of more standard and better quality-assured systems being constructed off-site and less elemental construction on-site”.26
23.While evidence from Zurich Insurance27 and the Concrete Centre28 warned about the dangers of some materials used in off-site construction being less resilient to fire, water and physical damage, robust regulation and design considerations should be able to mitigate these risks.
Client experience
24.As well as enabling the manufacture of better-quality buildings and infrastructure, these processes provide direct benefits to the client. Better-quality components produced as part of a standardised design process reduce the time and cost for resolving snagging issues compared with traditional methods of construction. This means that clients have greater certainty over timescales and costs of a project.29
25.CCG OSM Ltd told us that some clients might be reluctant to use off-site manufacture because “multiple aspects” of a project “need to be finalised at an earlier stage” by the client than they do in traditional construction.30 Mark Enzer, Chief Technical Officer at Mott MacDonald, explained that “we have been used to being able to change things when we are on-site. There has been enough flexibility to redesign while we are building it. That … goes away with design for manufacture and assembly”.31 Volumetric design can also limit the flexibility and adaptability of a building once it has been built.32
26.However, the digital nature of off-site manufacture presents opportunities for clients. Low Carbon Journey told us that “Because OSM buildings are designed and constructed based on a digital model, the information relevant to the client can be handed over … on completion. This information is critical to cost-effective long term operational management”.33 Digitalisation allows a construction project to be viewed first as a digital model, at which point it is possible to resolve difficulties and flaws before the asset is manufactured and constructed in real life. It also enables the construction process to be carried out with greater precision and efficiency.
Labour patterns and the experience of construction workers
27.All witnesses who were asked about the construction workforce profile agreed that there is a current labour shortage which will only worsen in the coming years. Jamie Ratcliff, Assistant Director of the Greater London Authority, explained why:
“The Farmer review34 found that due to the age profile of the workforce, huge numbers are retiring and not being replaced and there was what he called a “burning platform”. That was before the referendum on leaving the European Union. … There is a massive challenge with the uncertainty of what is going to happen when we leave the European Union, and what that means for our construction workforce.”35
This is corroborated by the June 2018 official statistics on the migrant labour force within the construction industry36, which show that:
- In London, 28% of construction workers are EU27 nationals and 7% are non-EU nationals; this compares to 13% who are EU27 nationals and 10% non-EU nationals in all other industries in London (excluding construction).
- The construction workforce is ageing; there was a 13% increase in the numbers of workers aged 45 years and over in the construction industry between 1991 and 2011, but non-UK nationals are younger (18% aged 45 years and older) compared to UK nationals (47% aged 45 years and older).
28.This labour shortage, coupled with the fact that the UK already lags behind other countries in construction productivity (Mark Reynolds estimated the construction productivity gap as “15% to 25% less than [some other] countries”37), means that the UK must urgently find solutions.
29.Mr Reynolds estimated that the use of off-site methods could improve productivity by “up to 50% … and maybe higher”.38 Additionally, off-site manufacture requires fewer workers because many of the manufacturing processes are digitalised and completed by machines. While new skills are required for off-site manufacture (which we turn to in chapter 4), moving to an off-site model for construction may help to ameliorate the worsening labour shortage.
30.Increased productivity has been seen in the projects that have been undertaken off-site so far. Laing O’Rourke told us about their “70:60:30” approach, which means that “70% of a project’s construction [is] conducted off site, leading to a 60% improvement in productivity, and a 30% improvement in delivery schedule”.39
31.Off-site manufacture also creates “wider local economic growth away from London and the main congested conurbations”.40 Heathrow Airport explained how they have “invited communities from across Britain to showcase how their area could help to build expansion” which will enable them to “spread the benefits and the legacy of this national piece of infrastructure across the country”.41
Health and safety
32.Off-site manufacture has the potential to improve working conditions for construction workers. Heathrow Airport told us that “An average of 2.2 million working days were lost to work-related injuries and ill health in the construction sector each year between 2013/4 and 2015/16” with a cost of “around £1.2 billion a year” to the sector.42
33.Due to the controlled nature of the factory environment, benefits to health and safety include:
- “Reduced likelihood of work-related ill health;
- Efficiencies in process, which reduces exposure to hazards by process re-engineering;
- Reduced [musculoskeletal disorders] both on and offsite
- Reduced risk of injury and accidents;
- Reduced risk of developing latent health conditions.”43
Environmental factors and other externalities
34.We heard evidence that off-site manufacture has many environmental advantages over traditional methods of construction, both in the process of building the product and in the finished product.
35.Interserve, a multinational support services and construction company, listed some of the ways in which the process of manufacturing off-site leads to improved environmental outcomes, including:
- “Waste reduction through using standard material sizes (designing around standard component sizes)
- Reduced errors and damage leading to less production and waste
- Reduced travel to site through fewer personnel movements and fewer material deliveries (though operatives do travel to the factory environment)
- Greater standardisation leading to more energy efficient factories
- Better control of material suppliers—including chain of custody etc.”44
Materials wastage in the construction sector totals nearly 120 million tonnes of waste per year and accounts for almost a third of the UK total;45 more off-site manufacture could significantly lower this figure.
36.This is borne out in studies which have shown that “precast concrete manufacturing in the UK has reduced carbon emissions by 26%, mains water consumption by 31%, and waste to landfill by 95% over the period 2008 to 2016”.46
37.Moreover, the precision manufacturing of buildings and infrastructure can result in products that are more energy efficient. Currently, “Buildings account for an estimated 40% of UK energy consumption and 19% of UK greenhouse gas emissions”47, but Rosie Toogood, Chief Executive of Legal & General Modular Homes, told us:
“We believe the way in which we are designing and precision manufacturing these homes makes them more airtight and delivers homes of a higher quality and use of the fabric-first approach allows us to deliver homes which are more energy-efficient in the long term. That is driving up standards in the industry across the board. In terms of adopting new energy systems, the factory-manufactured environment allows us to look at innovations in the way in which energy is captured and stored to be able to take homes off grid and deliver new energy solutions.”48
38.WPI Economics referred to the benefits off-site manufacture provides to the local community at the site of the asset:
“By reducing time, headcount and the range of activities that need to be completed on site compared to traditional on-site methods, off-site construction leads to projects that are completed more quickly with less noise, less local air pollution and less traffic disruption, easing the concerns of local residents.”49
Architectural ambition
39.Despite the benefits of off-site manufacture for construction, uptake is limited, at least in part because of perceptions about the aesthetics of these buildings. These may stem from some of the early problems and poor aesthetics associated with pre-fabricated housing in the post-war era.50
40.Many of our witnesses argued that assumptions that pre-fabricated buildings must all look the same are misconceived. Buildoffsite explained:
“The paradigm that offsite will stifle aesthetics is as untrue in construction as it is in the fashion industry: There will always be an appetite for iconic ‘haut couture’ buildings but that should not mean that there is not a high quality aesthetic on the high street for mass scale housing, schools and infrastructure.”51
41.Several witnesses likened the customisation which is available with off-site building to the options available for customising cars.52
42.Swan Housing Association explained how they offer purchasers of their modular homes “up to 36,000 combinations of layouts and external and internal finishes … The customer can design their own home, much as they would a new car, seeing the price of each option reflected in the cost of the home with each choice made”.53
43.Off-site manufacture has enabled the construction of other types of innovative infrastructure and buildings over the last few years. Kier Construction Ltd highlighted the following projects:
“Crossrail Farringdon Station, Sainsbury Wellcome Centre, Kings Cross R7 (all delivered by Kier) or 1000 Museum (by Zaha Hadid) reaffirm that modern digital manufacturing methods can enable greater variation and complexity in components, without traditional increase in labour and costs. OSM has therefore become an enabler for complex geometries, and facilitated, not inhibited architectural ambition.”54
Conclusions and recommendations
44.There are clear and tangible benefits from off-site manufacture for construction which make a compelling case for its widespread use. These include:
- Better quality buildings and infrastructure;
- Enhanced client experience and faster delivery;
- Fewer labourers and increased productivity;
- Creating more regional jobs away from large conurbations;
- Improved health and safety for workers;
- Offering building safety advantages—making it easier to ensure buildings meet quality assurance standards;
- Improved sustainability of buildings and infrastructure; and
- Reduced disruption to the local community during construction.
The Government has a ‘presumption in favour’ of off-site manufacture and has affirmed its commitment to investing in off-site in the Construction Sector Deal; we strongly support this direction of travel.
45.In the light of the health and safety benefits arising from off-site manufacture for construction, the Health and Safety Executive should work to raise the profile of these techniques and to encourage wider uptake of them.
16 For a full glossary of terms used in this report, see Appendix 7.
17 ‘Assembling solutions to a home shortage’, The New York Times International Edition (9 June 2018)
25 Ministry of Communities, Housing and Local Government (MCHLG), Building a safer future: Independent review of building regulations and fire safety: final report (the Hackitt Review), Cm 9607, May 2018: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707785/Building_a_Safer_Future_-_web.pdf [accessed 14 June 2018]
26 Ibid., p 92
34 Mark Farmer, The Farmer Review of the UK Construction Labour Model: Modernise or Die (October 2016): http://www.constructionleadershipcouncil.co.uk/wp-content/uploads/2016/10/Farmer-Review.pdf [accessed 14 June 2018]
36 Office for National Statistics (ONS), Migrant labour force within the construction industry (19 June 2018): https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/articles/migrantlabourforcewithintheconstructionindustry/2018–06-19 [accessed 20 June 2018]
38 Ibid.
42 Ibid.
46 Written evidence from the University of Cambridge (OMC0064). Statistics taken from British Precast, ‘Sustainability Matters 2017’: https://www.britishprecast.org/Publications/Sustainability-Matters-2017.aspx [accessed 20 June 2018]