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Infrastructure needs won’t be met unless sector undergoes radical overhaul, report says

A damning report has called on government and the construction sector to urgently find solutions to the sector’s lagging productivity levels amid claims the industry cannot meet the UK’s need for housing and may struggle to meet the need for infrastructure.

The report published today by the House of Lords Science and Technology Committee follows the launch of an inquiry into the sector back in March with peers listening to invested parties ever since in a quest for answers on why the industry continues to stagnate.

After hearing evidence from chief executives including Tony Meggs (Infrastructure and Projects Authority), Suzannah Nichol (Build UK), and Diana Montgomery (Construction Products Association) in recent months, peers have started to make conclusions on what could improve the sector’s poor productivity.

Those leading the inquiry have considered the potential benefits of off-site manufacture (OSM) for construction. OSM has been highlighted as a key element which can help to increase productivity while reducing labour demands, improving the quality and efficiency of buildings, and reducing the environmental impacts associated with traditional construction.

Tangible benefits of off-site manufacture for construction:

  • Better quality buildings and infrastructure
  • Enhanced client experience
  • Fewer labourers and increased productivity
  • Creating more regional jobs away from large conurbations
  • Improved health and safety for workers
  • Reduced disruption to the local community during construction

Despite requiring collaboration between clients, designers and contractors from an early stage for it to be effective, the committee has concluded that much of the construction sector is fragmented and lacking in trust. It is calling on the Construction Leadership Council for “strong leadership” in order for these barriers to be addressed.

Chairman of the committee, Lord Patel said: “There are clear and tangible benefits from off-site manufacture for construction which make a compelling case for its widespread use. We heard evidence that OSM could increase productivity in the sector by up to 70%. The construction sector’s business models are no longer appropriate and are not supporting the UK’s urgent need for new homes and infrastructure. The construction sector needs to build more trust and create partnerships so that companies can work together to improve the uptake of off-site manufacture, and the Construction Leadership Council should provide the necessary leadership. 

The inquiry into lagging productivity levels was launched to find reasons why the sector fell behind other sectors. The committee pointed to the fact that the construction was worth nearly £100bn to the UK economy in 2016, yet has failed to see improvements like in other areas. 

In relation to housing shortages across the UK, the report says ministers need to not only set ambitious targets and invest more but specify what conditions it might attach to this investment to drive the use of off-site manufacture. 

The committee heard evidence that if the government is to achieve its aim of building 300,000 houses a year by 2020, OSM would be the only way to meet this target, and that traditional construction methods do not have the capacity to build enough homes.

Another potential barrier put under the spotlight in the report is the industry’s ever-growing skills gap. If OSM is to be embedded into the inner workings of the industry, then the government must ensure that young people entering the workplace are equipped with the digital skills needed for modern methods of construction, according to the committee. 

“The role of the government and the wider public sector is pivotal in a move to greater use of off-site manufacture,” Lord Patel added. “The report sets out actions that the committee thinks the government should take including implementation of the Construction Sector Deal, committed execution of the ‘presumption in favour’ of off-site manufacture and a greater move to procuring for whole-life value rather than lowest cost.”