July 24, 2023

UK Government policy and frameworks - a bid to make MMC business as usual

by David Flynn
Example H2


The UK Government is a long-time backer of Modern Methods of Construction (MMC) and has strategized for its use since the turn of the century when the Egan Report underlined the need for construction to improve and innovate, with dedicated policies and billions of pounds worth of work being pushed through its various offsite frameworks

The early 2000s saw MMC acknowledged as a key catalyst for innovation and housing supply and Whitehall made it a requirement for a quarter of homes funded under the Affordable Homes Programme be built using MMC. By 2006 41% of new housing association houses were built this way. However, support slid away somewhat during the recession when many developers scaled back their use of off-site to cut costs.

Fast forward to the late 2010s and with housing affordability and supply issues more deeply entrenched and traditional construction facing major skills shortages, the political appetite for MMC returned with renewed fervour.

Support for it was enshrined in public policy. The 2019 Construction Sector Deal requires government departments to adopt a presumption in favour of offsite construction across capital programmes, where it represents best value for money. The Construction Playbook, the Government’s guide to procurement published in 2020, encourages the adoption of MMC for faster project delivery (the latest update includes a 22-page guidance note intended to promote the use of MMC on projects).

Homes England (HE), the government agency responsible for accelerating housing delivery in England, has invested millions in MMC in recent years. Its strategic plan for the period 2023-2028 pledges to “increase demand for MMC by incorporating requirements into programmes and contracts.” In a recent interview, CEO Peter Denton said the agency is “materially beyond” its own delivery targets for MMC.

Housing boost

Positive rhetoric around MMC is one thing but what about the brass tacks of government frameworks designed to encourage uptake?

HE oversees the Affordable Homes Programme, which under the current funding round (running until 2026) provides £7.4bn of grants to fund 130,000 affordable homes outside of London. Funding is available through two routes: the Continuous Market Engagement Route provides grants on a scheme by scheme basis. Meanwhile Strategic Partnerships provide long-term deals for multiple projects whereby partners commit to build at least 1,500 homes and must target for 25% of homes to be built using MMC.

The Affordable Homes Programme allows homes to be delivered using any of the seven categories of MMC defined by Cast Consultancy. However, HE has said it expects organisations to either use category 1, volumetric modular, and category 2, 2D primary structural systems, or adopt construction processes that achieve a pre-manufactured value (PMV) score of 55% or above.  PMV is measured according to the proportion of a building’s construction that takes place offsite or near-site.

Streamlined schools

The Department for Education (DfE) has long championed offsite construction and the transition towards a DfMA approach, having built over 100 schools to date via 7 different frameworks.

Its latest MMC1 framework has a pipeline of £3bn and is expected to deliver 30 schools per year by 2024. Following on from the previous modular A, B and C frameworks, it has generated significant market interest from offsite contractors and tier one contractors, with the likes of Bowmer & Kirkland, Elliott Group, Laing O’Rourke Construction and Wates Construction all involved in the largest schemes.

The framework is flexible to the use of modular volumetric, panelised, or componentised integrator techniques and a suite of standardised solutions for primary, secondary and SEND schools are designed to meet the needs of specific sites.

Contractors on the framework are measured against a set of KPIs, those that perform better gain a greater share of the work via direct allocation.

Buying power

The Crown Commercial Service (CCS) is the biggest public procurement organisation in the UK and forms a key plank in UK Government efforts to increase public and private sector confidence in MMC.

Its £1.2bn Modular Building Solutions Framework, which came to a close in April 2023, offered a rapid and compliant route to market covering a wide range of modular/pre-fabricated buildings for education, healthcare, housing, defence, commercial and retail. Keen to push the envelope even further, CCS announced a replacement mega offsite construction framework in 2022, set to be worth a total £10bn.

Running over seven years, it will be used for the design, delivery and commissioning of a range of offsite projects including social housing, new schools and hospital extensions.  The framework will cover a broader range of manufactured and prefabricated building systems and components, specifically 2D panelised structural systems and panelised external building retrofits. A total 29 firms are included on the list, spread across 6 lots, 18 (62%) of which are described as SMEs.

Hospitals and more

Offsite construction is now a prerequisite for virtually every business plan for new development on hospital sites, and it will be critical to the delivery of the 40 new hospitals planned to be built by 2030 under the government’s New Hospital Programme.

Full details of the programme and related selection criteria have yet to emerge with hospital trusts continuing to submit project proposals. However, the Department of Health and Social Care has confirmed that “selected” projects will be delivered “through a national model within a limited financial envelope, with a high degree of internal standardisation, using MMC.” It added that making the most of MMC will “support sustainable, greener and efficient design.”

The desire to make public buildings more sustainable and to reduce embodied carbon are fundamental to the Government target to reach net zero by 2050 and alongside benefits around rapid delivery and reduced labour requirements, should ensure MMC remains incredibly valid over the coming years.

Here at KOPE we understand the technology needs of these frameworks and their public targets. To enable MMC at scale, a digital platform is required. One able to work with a wide array of stakeholders and design requirements. We see frameworks as an area where KOPE will deliver tremendous value, considering the scale and need for repeatability across multiple building types.