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Off-site manufacturing: the right choice for UK construction.

Alaa Khattab investigates the potential for off-site construction to transform the fortunes of the UK construction industry.

By Alaa Khattab

In recent months, many column inches have been dedicated to the pressing need for productivity improvements and modernisation in the UK construction industry. Government and industry figures have prescribed a cocktail of remedies to arrest construction’s present malaise but one in particular has caught my attention – off-site construction.

To ensure that UK construction remains internationally competitive, the UK government have set out a plan for joint action by industry and the Department for Business, Energy and Industrial Strategy (BEIS).  The plan, known as Construction 2025 prioritises cost and time with an ambition to reduce the initial cost of the construction and the whole life cost of assets to 33%; as well as to reduce the time from inception to completion for new build and refurbished assets by 50%.

I believe that off-site construction offers a significant opportunity to achieve these objectives while simultaneously modernising construction and transforming the ailing financial fortunes of the industry. But first let me define what we mean by off-site construction. Put simply, off-site construction refers to structures, or modules, or significant components thereof built at a different location than the location of use.

It offers productivity, economic, social and environmental advantages over traditional construction methods. In housebuilding, off-site construction can reduce build time by 30% and cost by 25% compared to traditional construction methods. And this can be improved further by refinements and standardisation in the manufacturing process.

Off-site construction processes can also significantly reduce environmental and societal impacts. Pollution and traffic disruption are reduced when compared with the traditional approach as fewer vehicles are required to transport materials to and from the site. A comparative study conducted by academics at Virginia University has estimated that the metric tons of CO2 associated with transportation during construction are reduced by up to 20% where off-site techniques are used.

Then there is the elephant in the room – Brexit. The labour pool could shrink significantly under many Brexit scenarios.  Construction employers with five or more non-UK born staff are expected to face restrictions on migration that impacts their business post-Brexit. 80% of the sector in this scenario is expected to face an employment shortage ‘cliff edge’.

Offsite construction would reduce on-site labour by up to 75% relative to traditional construction methods. Yet, the sector, requires a wide range of off-site capabilities and skills. Including upskilling workers in design, manufacture, assembly, production engineering and project integration.

Off-site construction methods have proven their success in a wide range of countries in variety of settings, most notably in housebuilding and infrastructure development. A study suggested that over half of the new homes planned by 17 of the UK’s largest Housing Associations will be constructed using off-site methods. Moreover, off-site construction will be adopted by the Department of Transport, the Department of Health, the Department of Education, the Ministry of Justice, and the Ministry of Defence by 2019 as revealed in a recent budget document published by the Treasury.

Studies show that by increasing off-site construction from 7% to 25% the industry could improve overall productivity by 3.6%. But how do we accelerate adoption of off-site techniques? Like any new technology, kinks need to be ironed out and incremental improvements introduced to make the proposition more appealing. Of course, R&D underpins all of this, but R&D costs money, which isn’t always forthcoming.

Fortunately, the UK government will hand construction a £170m to fund to develop new technology as well as expand the existing R&D tax credit scheme. Which is where we come in – we are helping our innovative clients claim tax credits for off-site construction as well as innovative solutions in traditional construction. That is how we know that the construction industry has the talent and perseverance to make the most of this new and exciting technology and usher in a new era of higher margins and better buildings. We wish them well.

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