Written evidence submitted by Sir Robert McAlpine Ltd [MMC 042]
- Introduction
1.1 Sir Robert McAlpine welcomes the Housing, Communities and Local Government Select Committee inquiry into Modern Methods of Construction and is pleased to submit evidence. This is an important issue for the construction industry and has potential to unlock growth in the sector and the building of the new homes. Our submission will focus on the benefits of modern methods of construction (MMC), the challenges facing the construction industry in deploying these methods and steps that Government and Local Authorities can take to create a supportive environment for MMC.
1.2 As the construction industry and world markets are becoming increasingly competitive and with greater emphasis on efficiency and sustainability, the requirement for modern methods of construction has never been greater. At Sir Robert McAlpine, we have increased our focus on technology and creative digital innovation to improve efficiency within the industry and to better serve our clients. As one of the UK’s foremost construction companies, we are glad to be leading the way in modern methods of construction. We are constantly looking at ways we can use digital approaches in construction projects and we are proud to belong to a limited group of main contractors in the UK that are accredited by the British Standards Institute for our digital capabilities, notably, our in-house expertise in Building Information Modelling (BIM).
1.3 We welcome support from Government to encourage the use MMC and innovation in this area. We have welcomed the Government’s Construction Sector Deal, and its commitment of £420 million investment for digital and off-site manufacturing techniques. The Sector Deal’s particular emphasis on driving innovation and the recognition of skills within the construction industry are important.
1.4 Sir Robert McAlpine has been using modern methods of construction on our building sites for years. From deploying precast concrete for the Olympic Stadium’s terracing and stairs, precast cladding panels at Bristol’s Cabot Circus shopping centre, bathroom pods at the Chapel Wharf development in Salford, to the use of full volumetric module buildings assembled to deliver living accommodation for the Army at Colchester Garrison.
- About Sir Robert McAlpine
2.1 Sir Robert McAlpine (SRM) is a family-owned building and civil engineering company operating from 12 offices and employing over 1,600 people across the UK. Established in 1869, we have been a ubiquitous construction leader over two centuries. We are honoured to have worked on some of Britain’s most iconic buildings and projects, such as the Olympic Stadium, O2 Arena, Emirates Stadium, the Eden Project, Victoria Gate Shopping Centre in Leeds, the M74 Completion in Glasgow, and Victoria Square in Woking.
2.2 The values at the heart of our operations include a commitment to the highest standards of safety, quality, engineering excellence, sustainability, and an unswerving focus on the needs and aspirations of our clients. Our aim is to make a positive impact on the communities and the environment in which we operate. We believe being inclusive and nurturing a diversity of talent and skills will help us to continue our rich legacy of technical excellence to proudly build Britain’s future heritage.
- Digital construction and Building Modelling Information
3.1 Sir Robert McAlpine is proud to be driving innovation in digital construction and we are committed to being an industry leader in Building Modelling Information (BIM). Digital construction methodologies have revolutionised the way today’s building and civil engineering projects are procured, delivered and handed over. BIM has been an integral part of our project delivery for many years and as an increasingly digitally enabled contractor BIM is business as usual today on our projects.
3.2 We have significant ambitions when it comes to digital construction and understand that making sure our people have the skills and knowledge to unlock BIM’s potential to enhance project performance is key. We have invested in an in-house Digital Learning portal to ensure our teams in all project disciplines have quick and easy access to the training they need for their specific role. This commitment to the future reflects our aspiration to drive industry progress and continue the digital evolution of our industry.
- What are the benefits of MMC and how can they sustainably boost housing supply?
4.1 From our experience of using MMC, we believe there are significant benefits to its use, which we have set out below. It is important that each project is reviewed on its merits, with careful evaluation of the possible methods and systems available and their individual advantages and disadvantages for deploying MMC.
4.2 Markets where there has previously been a significant demand for highly-integrated Off-Site Manufacturing (OSM) include accommodation for students, military personnel, prisons and care homes. Affordable and key worker housing have also been important markets, as a high proportion of these are high-density living units. With further improvements in standardisation and cost parity, as outlined below, there will be greater opportunities to sustainably boost the UK’s housing supply.
Programme and Quality Certainty
4.3 Modern methods of construction have the potential to improve the quality of products and their installation, as well as provide greater predictability of the build-time and overall construction programme. As more work is done off-site in factory conditions, adopting manufacturing approaches to design and assembly, there is less chance of quality being compromised and quality can be delivered more economically. There is the opportunity to eliminate all snags and defects and provide greater consistency in the products, derived from standardised methods and the use of factory-controlled assembly processes. By doing more work off-site we are also able to reduce and simplify on-site operations and reduce defects due to interfacing with other trades and the potential for human error and damage. Other benefits to the quality of construction are realised in inspection processes, as all parties can inspect off-site, giving greater assurance on the achievement of the product, prior to elements being delivered to the construction site for installation.
4.4 There are also benefits to construction programme durations as by transferring work off-site and simplifying site operations, programme durations can be compressed and there is reduced exposure to weather dependency. Fully modular installation can be up to 90% quicker on site when compared to traditional installation. Additionally, off-site prefabrication can be taking place concurrent with traditional frame construction, increasing the certainty of completing a project on time. For example, in housing (non-high rise) we are able to construct roofs off-site whilst the main structure is going up, thereby completing two stages of construction concurrently, which would otherwise follow each other.
Sustainability
4.5 Aligned to the UK Government’s commitment to decarbonisation, building regulations set standards for energy performance in new and existing buildings. Off-site manufacturing techniques and prefabrication is delivering reductions in the energy use of buildings to support these regulations. The quality-controlled nature of factory-based fabrication typically provides solutions with better insulation values and air-tightness. Through employing MMC, improvements can be achieved in the insulation installed in walls, roofs and floors, as well as the precision given to permanently sealing the gaps around windows, doorframes and pipework. The same standards can be difficult to achieve on site, but new construction techniques have been developed to meet the changing technical standards set by regulation.
4.6 There are also considerable benefits to off-site manufacturing in that it creates more sustainable projects through the reduction in waste and the efficient use of materials. A reduction in waste will reduce the cost of finished product to the consumer. Additionally, greater off-site production reduces the potential disruption of construction activities neighbouring a site, which can negatively impact local communities, such as vehicle movements and noise.
Standardisation and Costs
4.7 The opportunities for standardisation of components, room sizing and materials which come from using modern methods of construction can deliver significant benefits in terms of quality, costs and sustainability. The use of standard layouts and components is fundamental to the achievement of economies of scale, and fundamental to the adoption of cost-effective manufacturing approaches. Standardisation can also increase the speed of which products can be delivered to the market, thereby bringing down overall project costs. If the product can be repeated and used on other construction projects, the industry can benefit from collective lessons learnt and economies of scale to reduce overall project costs. As such it can help contribute to both long term and immediate housing demand. The car industry has adopted this ethos by standardising as many components across ranges as possible, even sharing components across different brands.
4.8 Using MMC has the potential to generate savings overall due to less time and less skilled labour needed on site for assembly. Labour is significantly more productive in factory conditions. The use of standard components and pre-cut materials in areas of labour shortages such as London, means we can use semi-skilled labour for more tasks. Off-site manufacturing is particularly beneficial for small, inner city sites as less labour on site means less requirement for welfare space, for changing rooms, canteens and office space.
Safety
4.9 For Sir Robert McAlpine, a significant benefit to using MMC is that safety and working conditions are improved for our employees, contractors and the public. Health and safety is paramount to the ethos in SRM and how we deliver our projects as a business. Moving construction off-site and into a factory environment, means elements are constructed at an ideal safe height and not on ladders or access platforms on-site, leading to a safer and thus better build quality. We are using BIM technology to allow all our personnel on a project to view and utilise a 4D programme-linked model, which enables them to simulate and rehearse high-risk activities in a virtual environment before physical execution onsite, thereby achieving clearer understanding leading to better health and safety performance.
- What are the primary risks to increasing the use of MMC?
5.1 There are a number of risks to the increasing use of modern methods of construction, outlined below, which would need to be overcome before the wide spread adoption of MMC in the construction industry. We would welcome the Committee’s consideration of these issues and subsequent recommendations to Government on steps that can be taken to address them.
Growing confidence in MMC
5.2 As MMC is still an area of development for the construction industry, risks arise in the lack of confidence in off-site manufacturing and digital processes. The lack of experience in using these systems, expectations on long term performance, perceptions of pre-fabricated buildings and inherent resistance to change can lead to lack of confidence and a reduced take-up in MMC. The Government can take a leadership role in helping to grow confidence amongst clients and customers in the opportunities offered by employing modern methods of construction and demonstrate where it has been successfully used.
Lack of industry capability and capacity
5.3 As the supply chain for MMC continues to develop, the lack of industry capacity is a concern if demand outstrips supply. Construction companies are increasingly dependent on a new or different supply chain to provide products delivered to predictable quality and time. The construction industry would benefit from greater Government support being directed towards the UK’s MMC supply chain and funding for innovation. We would like to see the Government utilise the R&D tax credits system to incentivise organisations to innovate and trial new products and techniques. It will be important to find mechanisms to encourage better collaboration within the industry, and develop a sandbox approach where there is a safe space to innovate and test ideas.
5.4 As previously outlined, standardisation is fundamental to driving economies of scale and bringing down the overall costs of projects. If standardisation is not considered at the outset of the design process, MMC can become very costly with multiple size or product variations and it becomes harder to deliver efficiency and maintain quality in the production and assembly process.
Design, procurement and financial models
5.5 There are two specific issues relating to programming which pose potential risks in the use of MMC. Firstly, is the need for a “design freeze”. Using MMC means design production, co-ordination and approvals need to be completed prior to commencement of construction works, which is not the norm in traditional UK construction. This has considerable benefit by reducing risk across the project, but also means there is less room for change and flexibility later. There are time and cost implications if finalised designs need to be subsequently changed after fabrication has commenced, with significant impact if site modifications are required. Site preparation is the unknown factor in every building project and sometimes the rigid procurement and early design freeze within MMC can make changes because of live site issues problematic. A design freeze is essential for production line manufacturing and once prefabricated components come to site, the subsequent operation must be “installation only” and not “modify and install” to achieve maximum programme benefits.
5.6 The second issue relating to programming is the procurement and fabrication of modular elements. Like design, these parts of the process must be carried out at an earlier stage relative to construction works and could require substantial storage areas for extended periods of time. As an illustrative example, 200 pods are needed for a new housing development. With a rate of delivery at 5 per day, total delivery will be 8 weeks and will run from week 20 to week 28 in the overall construction programme. With a construction rate of 5 per week, total pod fabrication time will be 40 weeks. Last delivery is week 28 so pod fabrication needs to start at week 12, some 3 months before any work starts on site. Delivery starts at week 20 so off-site storage will be required for 160 pods for circa 30 weeks.
5.7 Both these issues challenge the traditional financial model and require more funds upfront. When using MMC, the financial model requires earlier spends in terms of design, procurement, fabrication and storage and as such requires earlier tenders. The supplier will be incurring costs at this stage, and clients must be prepared to pay for this work in advance. Concerns can also arise if during a construction project, delays require materials and fabrications to be retained in storage for longer than expected at a potentially significant additional cost.
Skills
5.8 The construction industry’s current skill shortage has an effect on the delivery of projects. However, the number of highly-trained and experienced construction personnel required to deliver a modular scheme is fewer than on a traditional build and this can be an opportunity to invest in a re-focused UK workforce. Many modular fabrication companies employ and re-skill semi-skilled labour from now redundant manufacturing and assembly plants such and those formerly provided by the car industry. The increasing move to modern methods of construction is requiring the development of new skills sets. It is important that attention is given to the requirement for new skills, and the shift to multi-skills and management of logistics, so that the sector does not experience a shortage in employees capable of these tasks. We welcome Government support for up-skilling employees in MMC and continuing to promote construction as a fulfilling career to students.
- How could the Government, Homes England and local authorities (a) increase demand for MMC to meet its homebuilding targets and (b) support the construction industry in increasing the use of MMC?
Standardisation
6.1 As previously outlined in this submission, standardisation is an important benefit resulting from MMC, which has the potential to reduce the costs involved in development. However, across the UK, space standards differ greatly as do specification standards, which is a potential barrier to increasing the use of MMC. The industry would benefit from standard elements and components capable of being assembled to deliver a variety of volume, a platform approach. The MMC market could respond with specific products, significantly supporting the supply chain. This would allow for greater improvement in the quality of the materials used and would ultimately be more sustainable, cutting down on waste.
6.2 It would also be beneficial to the construction industry and raise confidence in the deployment of MMC, if there were some common standards on options for fit out levels. In student accommodation, far more progress has been made using MMC as the expected fit-out levels are understood by all parties involved in the development and construction process. Having a range of housing types and exterior finishes, would be beneficial as it would allow for them to be tested in a controlled environment. Many building products are rarely tested together, in bigger build projects the contractor will build prototype sections to test the theories at design. MMC gives a real possibility to test the whole building as a completed product.
Improving awareness of MMC
6.3 The industry would benefit from greater education provided to Government and Local Authority procurement teams, planners and technical advisers, in the advantages of using MMC. We would like to see them actively and regularly encourage MMC as a solution in construction projects. Consistency in the approaches to procurement at all levels of government procurement - from central government, through departmental procurement, government agencies and local government – would be helpful.
6.4 A challenge for the industry is also to improve awareness of MMC amongst developers and support better education client side. This would in turn also benefit the developer, as an active and engaged client helps to driver performance and improves the overall quality of the project.
Support for the supply chain
6.5 We would welcome Government support for the supply chain in developing MMC solutions. We also believe Government could provide support for finance funding at favourable terms, to help developers overcome upfront costs on building projects to address the financing issues already established in 5.6. Adapting contracts to allow for upfront payments for offsite materials and stock would encourage the use of MMC. We would also request that the Government implements procurement models that enable better ways of working and collaboration in the industry, such as revisiting the Cabinet Office’s Trial Projects.
- How can small and medium sized housebuilders better utilise MMC, including to support innovation and competition in the construction industry?
7.1 Aligned to our earlier points about standardisation providing economies of scale and reducing project costs, we believe that this is again key to answering this question. As components are largely manufactured in a similar manner despite the developer’s budget (although the quality of materials changes), smaller house builders can benefit from the larger companies’ product development. There is potential for this across all the different aspects of MMC such as modular components, volumetric solutions, kits of parts and panels.
7.2 There is also an opportunity to learn from European housebuilding companies who have more experience in using MMC and off-site manufacturing techniques. For example, UK house builders could learn from their experiences of utilising Cross Laminated Timber type solutions.