A growing skills crisis in London’s construction sector is strengthening the case for the adoption of Modern Methods of Construction, a new Centre for London report has found.

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The report, Made for London: Realising the potential of Modern Methods of Construction, assessed how the speed, scale and quality of housing delivery could be increased using off-site housing construction and manufacturing.

Reviewing the challenges facing construction in London, Centre for London found that the sector has:

• An ageing workforce: 12 per cent of workers are estimated to leave the sector within the next 9 years (equivalent to 36,000 workers).
• A reliance on EU workers: Reduced migration resulting from Brexit is likely to be a compounding factor. Overseas workers born in the EU account for 33 per cent of the construction of buildings workforce, compared to 10 per cent in the rest of the UK.
• Low apprenticeship take up: The number of apprenticeship starts in construction, planning and the built environment in the capital has declined by almost 50 per cent (from 3,040 to 1,570) in the five years to 2016. There is also a wide gap in gender participation, with no women taking a high-level apprenticeship in construction in the capital in 2015/16.

The construction occupations facing the greatest skills shortage are all on-site trades, including plant mechanics, scaffolders and bricklayers, according to a 2017 report by the Greater London Authority. It indicated that demand in all three occupational areas in 2017 exceeded 300 per cent of 2015 employment levels.

In light of these pressures, the report finds that off-site housing construction and manufacturing could help to achieve faster delivery on-site than traditional construction – with schemes completed in about two-thirds of the time.

It also suggests that off-site construction could help to shift the workload from constrained construction sites to the more controlled, safer environment of factories, reduce local environmental impact, and help to diversify the workforce.

But the transition to widespread adoption of off-site construction and manufacturing has been slow. The report finds that a step change is required to ensure that Modern Methods of Construction can be part of the solution to London’s housing crisis. This includes the development of skills, improving supply chains, promoting the potential of new construction techniques, and ensuring supportive policy and financing structures.

To ensure workers develop the skills needed, the report calls on the Mayor of London to consider how to use devolved skills funding to help existing construction workers develop the skills needed to implement MMC, and on developers and industry bodies to invest in upskilling workers.

The report also argues that better collaboration within the construction sector is needed. It therefore recommends that local authorities and housing associations (with support from the Mayor of London and government) should pool expertise and purchasing power to form an MMC buying club. This would allow them to build at scale across multiple London boroughs, thereby helping sustain levels of factory production.

Victoria Pinoncely, Research Manager at Centre for London and co-author of the report, said:

“Innovation is urgently needed to increase the current levels of housing delivery within the capital. If Modern Methods of Construction are to be part of the solution, a step change is required.

“We need better collaboration within the construction sector, the development of standardised techniques and financing models, and a strong lead from both the GLA and national government.”

Jonathan Emery, Managing Director of Property, Europe, Lendlease, said:

“As an industry we’ve known for a while the potential issues facing us, we know that we risk losing a huge proportion of our workforce, and we now know that Modern Methods of Construction could – amongst other things – help resolve the issue and improve safety on site.

“It’s now time to put our knowledge in to action by sharing our research, working together and collectively engaging in practices that will strengthen our industry.”

Cllr Darren Rodwell, London Councils’ Executive Member for Housing and Planning, said:

“London faces a severe housing crisis. We need a major boost to housebuilding and – as this important report makes clear – innovation in construction methods can be a key part of achieving this.

“London boroughs are determined to deliver the homes our communities need and have proven themselves more than willing to try new approaches. I’m proud that we’re collaborating on the PLACE modular housing programme – the first time UK local authorities have come together to procure this sort of housing. Through pursuing innovative solutions, we can make faster progress in delivering more homes in the capital.”

ENDS

Notes to Editors:

About Centre for London

• Centre for London is the capital’s dedicated think tank. Politically independent and a registered charity, the Centre’s mission is to make London a fair and prosperous global capital. We publish research. We hold events. We collaborate and influence.
• This report was supported by Principal Sponsor, Lendlease.

About the data

• Ageing workforce: PwC and London First (2017). Facing Facts: The impact of migrants on London, its workforce and its economy.
• EU workers in construction: ONS Migrant labour force within the UK’s construction industry: August 2018
• Low apprentice take up: Department for Education and Education and Skills Funding Agency (2018). FE data library: apprenticeships.
• GLA report on construction site needs: Bennett, M., Forbes, D., & Hazelden, K. (2017). Construction Skills Gap Analysis for the Greater London Authority. Final Report. London: Construction Industry Training Board.

About PLACE

• PLACE (Pan-London Accommodation Collaborative Enterprise) is a new approach to tackling homelessness through acquiring modular temporary accommodation. London boroughs will use modular housing units to increase the supply of high-quality, temporary accommodation options for people needing a home. PLACE’s precision-manufactured homes will have the quality of permanent homes, meeting the London Plan’s space standards, and can be moved from one site to another as required. For more information, please visit: www.londoncouncils.gov.uk/place