Skills England has said the use of modern methods of construction (MMC) could be “expanded considerably” to help tackle labour shortages.
The government’s new quango, set up to bring together different parts of the “fractured” skills system, released a report this week that highlights challenges for construction, including delivering 1.5 million new homes by 2030 and low levels of productivity.
It noted that even before Labour’s housebuilding plans, the Construction Industry Training Board forecast that the sector needed an extra 252,000 workers between 2024-2028 to meet demand.
The housebuilding plans will also require construction of new transport and social infrastructure, commercial development, education and health facilities, at a time when the energy and water sectors need additional capacity delivered through specialist roles, the report added.
It said that MMC “has the potential to reduce construction’s reliance on skilled labour pools and drive productivity in the sector”.
“The use of MMC in a 430-home site in Birmingham improved efficiency by 50 per cent, and stakeholders across the sector note that workforce shortages are a key driver behind MMC adoption. However, due to its currently limited use in the sector, MMC adoption will need to be expanded considerably to bring a notable impact on our current skilled workforce requirements,” it added.
The previous government championed MMC, particularly offsite, telling public bodies to favour such bids in procurement from 2019.
However, the extent to which this took place was limited and in January 2024 the House of Lords Built Environment Committee criticised ministers for lacking a clear strategy on investing in MMC.
Its report followed the collapse of a number of offsite specialists including Ilke Homes, House by Urban Splash and Caledonian Modular.
Cast Consultancy chief executive Mark Farmer, whose 2016 Modernise or Die report called for a ramping up of the method, was then appointed ‘MMC champion’ under the previous government. He told Construction News that Skills England should be clear about what it means by the term.
He said that volumetric modular housing has struggled to gain a foothold in the market and would need huge government intervention to help deliver the government’s desired outcomes.
Hybrid pre-manufacturing, such as panellised and podded solutions within traditional projects, have been more successful, Farmer said. “This still requires reskilling of existing workers to deal with new interfaces, details and tolerances, but is the current direction of travel already being taken by the volume housebuilder market to address labour shortages and higher energy performance standards.
“The mission to build 1.5 million new homes in this parliament will not be delivered just through planning reforms, it will equally need a workforce skills, supply chain modernisation and funding model component.
“I think it is also important to not forget the latent opportunity of doing traditional homebuilding more productively, without necessarily any change in current techniques, to take pressure off the workforce.
“The easiest way to secure this would be embracing more standardised designs, which the mooted planning passport approach could achieve if linked to pattern books. Other countries like Australia are actively pursuing this to speed up planning but also to make design and construction easier,” he said.
The prime minister also announced at the Labour conference that Skills England will lead on reform of the apprenticeship levy, which is to be renamed the growth and skills levy. The reformed levy will allow funding for shorter apprenticeships, rather than the minimum 12 months they must run for under the current system.
Employers will also be asked to target their levy funding for apprenticeships on younger workers, rather than upskilling older personnel.
The apprenticeship levy was introduced in 2017, with all companies with a wage bill above £3m charged 0.5 per cent of their annual pay bill. Contractors soon reported problems with being able to draw down what they had contributed.
Full details of how the levy will function in future have not yet been released.
There were 22,310 apprentice starts in construction, planning and the built environment in England in 2023/24, down from 24,530 in 2022/23 and 26,060 in 2021/22.
