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Housing: Modular Construction

Volume 830: debated on Thursday 8 June 2023


Asked by

To ask His Majesty’s Government whether they plan to improve the rates of home ownership by the use of modular construction techniques.

My Lords, the Government are committed to increasing the number of homes built using modern methods of construction—MMC—across all housing tenures. MMC offers a range of benefits, such as delivering high-quality energy-efficient homes more quickly, and the Government are supporting the sector with our £1.5 billion levelling up home building fund and providing funding for up to 40,000 MMC homes through the affordable homes programme to help deliver these benefits at scale.

I thank the Minister for her Answer. Does she agree that modern methods of construction are safer for employees, create less waste and avoid the corner-cutting of Friday afternoons on wet building sites? However, the technology requires a systematic pipeline: you cannot switch factories on and off. Are the Government taking action to ensure that mortgage providers are confident in modern technology and, above all, that planning departments, which have a prejudice that remains today, accept modern technology?

I know that the noble Lord has been interested in this sector for many years. I assure him that the Government are taking this very seriously. We are focusing on removing all the barriers to growth. These are about insurance, finance, warranties and, as he mentioned, mortgages. It is all about stimulating that pipeline so that these companies can invest and keep those factories going until this becomes a normality in our housing system.

My Lords, has my noble friend read the government publication Modern Methods of Construction, published in September last year? It says:

“The government is committed to using its position as the single largest construction client to support the adoption of a more productive and sustainable business model”,

and goes on to say that there is

“a presumption in favour of off-site construction for relevant departments”.

What progress have the Government been able to make in using MMC for the prison and hospital building programme? If there is success there, might it not encourage the housebuilding industry to take renewed interest in MMC for homes?

On my noble friend’s last point, that is exactly what we are doing: we are encouraging all the time through investment and support to help housebuilding. On other issues of building public buildings in particular, we want to encourage the take-up of MMC across the whole range of traditional building sites. We can do that by sharing across government. We have introduced a presumption in favour of MMC in our capital programmes, such as within the Department for Education’s school rebuilding programme and the Ministry of Defence accommodation programme. Significant progress has been made on schools and prisons programmes, and we are using those examples of best practice to help shape future policy for MMC.

My Lords, in the social housing sector, Legal & General stopped production on the basis that there was an insufficient pipeline of orders and it had had six years of losses. What discussions are the Government having with the social housing sector to see whether modular construction can contribute not just to owner occupation but to dealing with a very serious shortage of social housing?

As I have said, it is across all sectors. We need to support the MMC sector to increase the amount of housing across the board, whether that be private, affordable or social rented.

My Lords, in recent discussions in your Lordships’ House and in Grand Committee, noble Lords have expressed huge concern about the Government’s plans to lower the standards of licensing for houses in multiple occupation, specifically those to be used for asylum seekers. Local councils are now using modular construction to provide high-quality, low-cost, self-contained accommodation for the homeless. Has the Minister considered this method of housing asylum seekers?

I am not aware that we have looked at this for asylum seekers particularly, but if there is a requirement for high-quality housing to be delivered quickly then we will of course work across government, as I said we are doing, to ensure that all departments look at MMC as a method of delivering quickly and safely.

What conversations have there been across government departments on the environmental impact of introducing modular housing, particularly the use of shipping containers for modular homes, which are seen to be a more environmentally friendly way of avoiding waste and providing homes for the future?

One of the main things with modular homes is that they are more environmentally friendly: they are energy efficient and use more environmentally friendly products. We need to keep pushing this to get this sector to be a far more major part of our whole building industry.

My Lords, in 2019, the Science and Technology Select Committee produced a report on off-site construction. I am pleased to hear that the Government accepted the recommendation for procurement for government buildings to be on that basis. One of the other recommendations was on the skills gap that needs to be filled, particularly for the Government to work with the construction industry and the Construction Leadership Council to develop the skills that we require for off-site construction.

Skilling up in modern methods is extremely important for the whole construction industry. There are two ways that we are doing this. First, the Construction Industry Training Board levy applies to all employers engaged wholly or mainly in construction industry activities. Secondly, the Government’s apprenticeship levy funds slightly different activities, but these funds are ring-fenced to support apprenticeships across the whole construction industry, which is what we require to skill up the workforce to deliver what we want, particularly in MMC.

My Lords, today, 62% of the population owns a home of any kind in the UK, compared with 71% in 2003. The main reason for that is the government-backed wage freezes. The real average wage today is lower than in 2007 and workers’ share of GDP is at a 50-year low. People simply cannot afford to buy a home. Can the Minister explain what steps the Government will take to increase workers’ share of GDP, which necessarily requires a reduction in capital’s share of GDP as well?

The question is slightly off-piste and I could be standing here for quite a long time answering it, but I will certainly ask the Treasury. The noble Lord mentions home ownership, which is really important. Since spring 2010, as I think I said yesterday, 837,000 households have been helped to purchase a home through government-backed schemes. That is the important bit. Continually putting up the living wage for people and encouraging them to be homeowners is something that this Government have done, and done well.

My Lords, I totally support the view of the noble Lord, Lord Rooker. One of my previous companies, Bovis, can erect a modular home in six weeks flat. They are wonderful places to live and hugely energy efficient; planning is the major problem.

My noble friend is absolutely right. These homes can go up quickly but the long period of time is often in the planning system. That is why the levelling-up Bill is going through, through which we hope to make the planning system simpler and quicker for developers.

My Lords, I declare my interests as on the register. Is there any evidence to show that planning is actually a barrier to modern methods of construction?

My noble friend would ask that question. I suggest that it is a barrier not just to this method of construction, although the sector needs to consider how it sells itself to the public. There is all this talk about MMC not being proper housing, whereas if anybody goes to see it they can see that it is beautiful housing. It is not ugly and can look like any other traditionally built house. However, the planning system needs to be faster for all types of construction, including MMC.