Off-site manufacture for construction: Building for change Contents

Summary of conclusions and recommendations

The case for off-site manufacture for construction

1.There are clear and tangible benefits from off-site manufacture for construction which make a compelling case for its widespread use. These include:

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. (Paragraph 44)

2.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. (Paragraph 45)

Infrastructure, building and housing

3.We recommend that the Government explore options for the accreditation of housing built using off-site manufacture, to ensure that mortgages are available to those who wish to purchase them. (Paragraph 52)

4.The Government must set out what conditions it will attach to the extra financial support for housing to drive the uptake of off-site manufacture and other innovative technologies. (Paragraph 55)

5.We recommend that the Government, through Homes England, put pressure on housing associations and local authorities to stipulate the use of off-site manufacture, where appropriate, when procuring new housing developments. It should also consider mandating a proportion of off-site manufacture for large regeneration projects. (Paragraph 56)

6.There is an opportunity for the UK to maintain its position at the forefront of off-site manufacture globally in the commercial and high-rise residential sectors. However, we are concerned that the UK lags significantly behind other countries in the low-rise residential sector. The Construction Leadership Council and the Government have an important role to play in encouraging the use of off-site manufacture in the low-rise residential sector. This can be done by the spreading of best practice and case studies by the CLC and by the Government providing incentives to house-builders. (Paragraph 60)


7.The Government must work with the construction sector to design new qualifications to close the current skills gap. This should be done primarily through the Construction Leadership Council as the industry lead body, but other industry bodies should be encouraged to engage in the process as well. (Paragraph 80)

8.The Government must ensure that young people entering the workplace are equipped with the digital skills needed for modern methods of construction, including off-site manufacture. It is important that this is reflected in post-school training provision, but also in the school curriculum so that the next generation have the basic skills necessary to undertake more specialist training. (Paragraph 81)

9.Perceptions of the types of jobs available in the construction sector are based on the skills needed for on-site construction. We welcome the creation of the single industry platform and portal announced in the Construction Sector Deal to support construction careers and promote the new types of careers in construction to the next generation. (Paragraph 82)

10.We support the Government’s plans to create new apprenticeship standards across the sector. (Paragraph 83)

11.Alongside this, the Government, with the construction sector, must re-assess the wider operation of the Apprenticeship Levy in the construction sector and make the necessary changes to ensure the money is best spent to benefit the long-term viability of the sector. (Paragraph 83)

Sector barriers to uptake

12.The construction sector needs to build trust and partnerships so that companies can work together to improve the uptake of off-site manufacture. We welcome initiatives such as the Construction Leadership Council and the Infrastructure Client Group’s Project 13 but more needs to be done by other industry groups to facilitate collaboration within the sector. (Paragraph 95)

13.The Construction Leadership Council should provide overarching, active and focussed leadership for the sector. They should gather and disseminate data including case histories, sign-post to resources and spread best practice around the sector. (Paragraph 96)

14.Designers, contractors and suppliers must all have early involvement in a project for off-site manufacture to be successful. This requires a change in business models in the sector and amongst clients, both private and public sector, as well as far greater collaboration. There is a need for a client’s professional team or advisers to adopt a different approach, as outlined by the Infrastructure Client Group’s Project 13 (see Figure 1), to enable off-site manufacture. We welcome moves in the construction Sector Deal to address business models in the sector and make them more effective. (Paragraph 104)

15.At present the upfront finance required to set up off-site manufacture appears greater than the finance required for conventional construction. We welcome the commitment in the Sector Deal to identify sources of funding available to the sector. (Paragraph 107)

16.Should this review highlight gaps in the availability of funding, we recommend that the Government work with the construction sector and the financial services sector to develop sources of funding to fill those gaps. (Paragraph 107)

17.We will follow with interest the success or otherwise of the new models developed through the Infrastructure Client Group’s Project 13. (Paragraph 113)

18.If they are successful in tackling some of the issues we have raised around risk and cash flow, the Construction Leadership Council should promote these models across the sector. (Paragraph 113)

19.Many of the barriers to the greater uptake of off-site manufacture for construction facing the construction sector, such as a lack of collaboration and attitudes to risk, are cultural and can only be dealt with by the sector. (Paragraph 120)

20.The sector must look at ways to reduce the barriers and this should be led by the Construction Leadership Council. (Paragraph 120)

Government actions to overcome barriers

21.The Construction Sector Deal is an important step forward for off-site manufacture and the wider construction sector. It is important that the Government and the Construction Leadership Council work together with the sector to make sure the Sector Deal is a success. The CLC must draw up a detailed implementation plan containing a timetable, objectives and metrics as soon as possible and hold those responsible for delivering the Sector Deal to account. This is particularly important considering the sector’s problems with collaborating and working together in the past. (Paragraph 123)

22.We recommend that the Government provides companies who want to bid for Government contracts with the information they need to comply with the BIM mandate. It is important that the Government enforces the mandate, as it is a significant enabler for off-site manufacture. (Paragraph 130)

23.We recommend that the Government develop and publish a series of Key Performance Indicators against which the success of the “presumption in favour” can be assessed. Furthermore, where the presumption in favour is set aside and a project goes ahead that does not use off-site manufacture, the Government should publish a statement explaining why it has not been used and justifying that decision. (Paragraph 135)

24.We recommend that the Government, using the levers we set out in Box 8, provides a steady pipeline of projects for the construction sector so that companies can plan and make the capital investments necessary for off-site manufacture. We welcome the Government’s commitment to the National Infrastructure and Construction Pipeline in the Construction Sector Deal. It is important that the Government adheres to the pipeline to provide certainty to the sector. The ‘presumption in favour’, if properly executed, will also help to do this. (Paragraph 140)

25.The use of national frameworks for procurement that include different suppliers should help maintain a visible and reliable pipeline. It should also ensure that there is no loss of learning between projects and that knowledge can easily be transferred from one project to the next, unlike the current system where learning is often lost as each project is re-tendered. Having different suppliers signed up to the frameworks will enable these benefits while also ensuring that there is still competition between suppliers. (Paragraph 149)

26.We welcome the commitment to develop a definition of value and for steps the Government has taken so far to embed procuring for value in the public sector. However, more needs to be done. The Government must consider what further action it can take to embed procurement for value in the public sector and the consideration of externalities, including environmental performance, reduction of waste and health and safety in all procurement processes. (Paragraph 150)

27.We recommend that the Government shares intelligent client best practice in relation to off-site manufacture between departments and with other public-sector clients, such as NHS trusts and local authorities. (Paragraph 152)

28.The Government should promote the adoption of recognised standards for off-site manufactured components within the industry by working with bodies such as the British Standards Institute and the Building Research Establishment. (Paragraph 155)

29.Her Majesty’s Revenue and Customs should work with the sector to foster greater understanding of how R&D tax credits work, what the benefits are and how to meet the criteria to receive them. (Paragraph 161)

30.We recommend that a portion of Government funding for research and development in the construction sector should focus on detailed performance data for the lifetime of buildings and infrastructure. Not only will this provide an important evidence base for improving future designs, it will also enable a comparison for whole-life cost can be made between manufactured and traditionally built buildings and infrastructure. (Paragraph 162)

31.The role of the Government and the wider public sector is pivotal in a move to greater use of off-site manufacture. We have set out actions that we think the Government should take including implementation of the Sector Deal, committed execution of the ‘presumption in favour’ of off-site manufacture and a greater move to procuring for value rather than cost. (Paragraph 163)

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