Housing Minister Says MMC Sector is a ‘Work in Progress’
The modular construction sector is currently undergoing a transformative phase. Recently appointed Housing Minister Lee Rowley has described it as a "work in progress". In a recent address to the House of Lords Built Environment Committee, Rowley acknowledged the not-unexpected collapses of several innovative modular building companies, emphasising the broader government commitment to bolstering modern methods of construction (MMC).
As the MP for North East Derbyshire, Rowley, who has been in his current post for just over a month, highlighted the sector's significance, which has been punctuated by the demise of notable players such as Ilke Homes, Urban Splash's modular spin-off, and Caledonian Modular. Even the ambitious L&G Modular Homes is in the process of winding down, contributing to an evolving narrative within the sector.
Rowley, who has previously held portfolios related to construction and building safety, expressed the government's persistent focus on advancing MMC. He acknowledged that the unexpected exits of certain players have marred the sector's progress. Yorkshire-based Ilke Homes entered administration during the summer after failing to secure a buyer, while Urban Splash's modular venture faced operating issues at its factory in Alfreton, leading to its administration in May 2022. Additionally, Caledonian Modular, a Midlands-based manufacturing specialist, collapsed in March 2022, only to be acquired by JRL a few weeks later.
The downturn in the sector also impacted the National House Building Council, which reported losses on its modular housebuilding warranty scheme, underscoring the broader implications of the challenges faced by MMC companies.
After briefly holding the position under Liz Truss, Rowley's return to a housing role in November signifies a renewed commitment to addressing the complexities surrounding MMC. Speaking before the House of Lords Built Environment Committee, Rowley traced the government's MMC policy outlined in 2019, which aimed to leverage innovative techniques for creating better homes. The objectives included diversifying construction methods, enhancing property quality, and achieving cost efficiencies.
However, Rowley candidly admitted that these objectives are still a "work in progress" and have not been seamlessly realised. The setbacks in the sector, marked by the exits of key players, have been, in Rowley's words, "not unexpected." He attributed these challenges to a combination of economic circumstances, particularly the impact of the COVID-19 pandemic and the ongoing quest to establish the long-term viability of MMC.
He stated that, "The intention was to broaden out the range of methods by which we could build properties, and within that to ensure that we were building better properties given that we all know that we have a challenge with quality in certain parts of the sector, and then hopefully to get... cost efficiencies. Do I think that has been achieved? Not yet… we are in a work-in-progress phase and that progress hasn’t been the smoothest in terms of the removal of some people from the market. But that isn't unexpected in a process where capitalism should support primarily most of what has been done."
The minister acknowledged that achieving a virtuous circle in the sector has proven elusive thus far. Despite the intended benefits outlined in the 2019 policy, the industry has faced hurdles in smoothly removing certain players from the market. Rowley emphasised that while the pandemic has played a role in the sector's setbacks, a more profound question looms concerning how to ensure MMC's sustained success in the long term.
As part of his commitment during his tenure, Rowley aims to address these fundamental questions and unpack the challenges hindering the sector's seamless evolution. While he recognises the ongoing nature of the "work in progress," the minister is resolute in his determination to navigate the complexities and propel the MMC sector towards a more resilient and prosperous future.
MMC offers many benefits compared to traditional methods of construction and has the potential to help the UK meet its net zero targets with more sustainable and eco-friendly buildings. In addition, increased adoption of MMC in the housing sector can assist with the housing crisis and achieving house-building targets more rapidly. With government backing, the MMC sector can surely overcome its challenges and emerge as a mainstream solution in the near future.