In July 2018 the Government published its response to a recognised need for innovative new ways of working and investment in technology to improve productivity in the construction industry.
The Construction Sector Deal was an ambitious response to widely held concerns that construction in the UK lacked the capacity to deliver the nation’s £600 billion infrastructure pipeline over the next ten years. Although criticised by some for being long on rhetoric and ambition but a little short on detail, the deal set out clear objectives that have a strong focus on productivity:
• a 33% reduction in the cost of construction and the whole life cost of assets
• a 50% reduction in the time taken from inception to completion of new build
• a 50% reduction in greenhouse gas emissions in the built environment
• a 50% reduction in the trade gap between total exports and total imports of construction products and materials.
Offsite manufacturing technology was identified as a key strategic area to achieve these targets, along with the use of digital technology and a shift to measuring whole life asset performance to the total building life cycle.
The deal recognises that offsite manufacturing technologies will help to minimise wastage, inefficiencies and delays that affect onsite construction and enable production to happen in parallel with site preparation – speeding up construction and reducing disruption.
The move towards increased use of offsite construction is supported by a number of reports over recent years. McKinsey reported that the biggest impact on productivity in construction would come from moving toward thinking about construction as a production system, where possible encouraging offsite manufacturing, minimizing onsite construction through the extensive use of pre-cast technology, assembling panels in factories and finishing units onsite.
A WPI Economics report in 2017 on the value of offsite construction suggested that increasing a proportion of the UK construction undertaken offsite could significantly boost UK productivity and growth. The report modelled data from the ONS to suggest that increasing offsite construction by 25% of all construction work undertaken would be associated with an increase in GVA (Gross Value Added) per job of 3.6% in the construction sector. In cumulative terms that represents over £30billion in growth up to 2025.
The Government’s own report “Offsite Manufacture for Construction: Building for Change” recognised the clear benefits of offsite technology and the importance of its role in achieving infrastructure programmes.
The case for offsite construction has been well made and understood across the industry. The Government has committed to changing its procurement models to promote the use of offsite methods and allow the public sector to procure for whole life value rather than upfront cost.
It’s still early days in terms of seeing that delivery on the ground but there some signs of implementation, with the announcement in the summer of a £3bn framework offsite to build secondary and primary schools. Offsite manufacturing is also increasingly being used to build new homes.
In its update one year on from the publication of the Construction Sector Deal the Government was once again a little short on detail. It says that it is consulting on how government departments can take a consistent approach to drive a new market for manufacturing in construction, taking advantage of economies of scale. In July 2019 it said that the response to the consultation is due for publication “shortly”.
There is no doubt that the use offsite construction is growing, but a lack of data on its proportion of total UK construction is still hard to come by, which is why there have been calls for an annual report from the Government to detail the proportion of public funded offsite construction.
What’s clear is that offsite is key to the success of the Construction Sector Deal and can deliver all of the targets for improved productivity and cost, and sustainability in UK construction projects.