head of Offsite Expo, we spoke to Offsite Construction Week Advisory Group member Mike Ormesher to ask his thoughts on the new Labour government’s plans and offsite construction’s role.
Mike is a Project Director at the Off-Site Homes Alliance (OSHA), and has key insight into the steps needed to be taken in order to improve the quality of new homes constructed in the UK.
As reported in The King’s Speech, the new Labour government has promised to ‘get Britain building’. Do you think the new government can live up to this promise and address things like the UK housing shortfall?
We all hope that the Labour Government will uphold its core values and promises around political and social support for our multi-faceted housing needs. This has been a very encouraging start from Labour. They seem to be addressing the key issues and implementing new plans with the likes of the planning reform, a New Town Task Force chaired by Sir Michael Lyons, supported by Dame Kate Barker, and we now have a much-needed combined authority focus for devolved funding.
Focus on these increased areas and numbers of housing with this collaborative engagement is very positive. However, like any other strategy I think we need to focus on the detail and take stock of the situation as these measures alone won’t be enough to fix the significant housing crisis we are in.
We also hear from the Secretary of State of MHCLG, Angela Rayner, that this isn’t a short-term fix and could possibly take a considerable number of years.
We’ve heard from the National House Building Council and the Home Builders Federation that we have warnings from the first quarter 2024 statistics that we will probably build far less homes in 2024.
The number of 125,000 homes has been bandied about and this is a lot lower than we’ve had for many years. There are many areas of concern we still have from skills to labour availability. And this is going to add more significant pressure into the quality of homes and the performance of homes that we are supposed to be delivering.
Adding more housing into the process, as well as a very difficult performance-regulated industry, is going to be challenging. Things do have to change.
We can’t just have high-level political ambitions around new towns and devolved funding and wanting to push more houses out, we need to focus on the key critical areas as well.
We at OSHA estimated back in 2020 that we need around 340,000 new homes a year to catch up on our very transparent needs. That number has been trumped by a new figure of 370,000 homes by Angela Rayner, and we believe we have a housing deficit of around about 5 million homes in the UK.
And when we look back over history, we have no chance of delivering all of these houses, with better quality, better performance, etc, without the use of modern methods of construction.
And this isn’t just the technology, it’s the process of delivery. That means more social housing, involvement with landlords and developers, etc.
We need to move the very detailed and significant industry commitment from the reports we had back in the late 90s and early 2000s (Rethinking Construction and Accelerating Change) around rethinking construction. I think we’ve demonstrated that we have rethought construction.
As an industry we have innovated and without question we need now to focus on constructing the team and accelerating the change.
I think the problem here, 30 years on from that significant investment by the industry led by government funding, is that we have failed to engage to build the right teams and accelerate the change.
This is what we set up OSHA to do back in 2019. I believe that we can’t just focus on high level ambition and high-level strategy. We need to take a very close look at what we’ve been trying to do as an industry to support the many thousands of new homes that we need and really understand what that inertia looks like.
The new government is planning on introducing new powers to Metro Mayors and combined authorities to support local growth plans. How do you think this will impact the offsite construction sector over the next few years?
This is a significant step in the right direction because I don’t believe a central government can actually deal with all of the problems it has to face as a political team.
There are so many things that we have to consider now in the landscape and globally, so actually sorting out an issue around housing really does require local ambition, local focus, local collaboration, etc.
Devolved funding around combined authorities is an absolute necessity, so it’s a welcome thing.
Within OSHA we’ve been working with many combined authorities and in particular we’ve been working very closely with Greater Manchester Combined Authority, looking at how we’re going to deliver 75,000 homes in the next four years.
That’s Andy Burnham, the Mayor of Manchester’s new ambition with this devolved funding, so it’s a definite welcome situation for us at OSHA. But this will only come if we are getting again into the detail. It’s about understanding how houses are built, real performance monitoring measurement is crucial if we are to truly improve on our climate change promises.
The King’s Speech also said the new government recognises the urgency of the global climate challenge and will look at the development of new technology to tackle this. Where do you see offsite construction’s involvement in tackling this climate challenge?
We need government commitment to actually focus and to help us lead the pathway going forward and provide a clear, consistent message so that all of the manufacturers, contractors and many design professionals, cost consultants and engineers all understand where the future lies and where they can focus their efforts, and develop their own tactical and strategic plans as businesses.
This message has to be collated together and it has to be communicated so we know exactly what we need to do.
That could be working with clients like OSHA who can demonstrate not only the process management and ecosystems, but also data insights, because this gives confidence to projects around all of the things we want to see, from housing strategies to end client needs.
We are very focused at OSHA on more aggregated demand, a huge ingredient for the successful delivery of housing. The demand has to be there from the outset, chasing demand when you have a fantastic process isn’t going to cut it, you have to have visibility of the demand.
We need transparent case studies to demonstrate what success actually looks like across many sites, with many offsite technologies across many stakeholders.
The full housing process housing is very complex, from land management right through to regulatory control. But in the middle of all of that, you have to have a very well defined, robust, transparent DfMA process to be able to communicate where you are in that planning process.
We also need academic monitoring programmes. There is a gap in performance, no question, so we need to build into this academic monitoring and if we need to go backwards, we should go backwards and then we can move forward.
We need efficiency and better trust in engagement with the extremely innovative supply chain. If we can fully understand DfMA and bring all of the partners together to start learning how to work with that process, then we will make a big difference.
And then it’s just about getting lower cost for delivery, and we can do that with repetition in factories. We talk about offsite technology and and process being 20 per cent above traditional, but that’s not correct. It’s only that way because we are a niche industry at the moment and we’re not getting enough repeatability.
Once we get that repeatability and confidence in the markets, then we will really start to drive down costs, improve quality, improve performance, and see faster delivery of sites and homes.
Once we get the process right and we have all of the people around the table, we will then be able to develop as an industry with things like platforms, best-in-class software and access to experts.
Offsite firms have faced difficulties over the last few years with big names either going out of business altogether or having to make significant cuts to their workforce. What can the offsite construction sector do to ensure its stability in the future?
We’ve had very innovative organisations, but I think what they’ve tried to do is be all things to all people, rather than focusing on the manufacturing side and doing what they do best.
We have seen some areas where we’ve had investors coming into the UK thinking they can just set up a factory and run with it. Well, that’s not as easy as it looks, you need to have a leadership organisation driving volume driving control over the delivery process.
In my view, without a contractor or a developer at the helm, it’s going to be very difficult to sustain a growth of housing from a factory unless you fully understand and integrate the whole housing delivery process with the DfMA process.
I think we need more factories. In 30 years time I know we will see a significant growth in volumetric homes. I think even for house builders if they were honest they would say yes, this is the future.
We have severe lack of skills, and we have severe shortage in labour. And we don’t really understand what those skills need to be because we’re used to dealing on sites. How does that change in a factory?
We don’t have enough training and I know the sustainability schools have been working really hard on this, as have we within our own ecosystem, but there’s a long way to go to unite the industry as a fully operational sector, delivering high quality, low cost, high value homes.
What are your thoughts on Offsite Expo and what can the event do to support the offsite construction industry?
Offsite Expo is a significant opportunity. It has a significant amount of supporters and we have everybody there from suppliers, to clients, to governments and regulatory departments.
I think everybody that should be around the table will be at Offsite Expo, there’s no question about that.
I think because governments have a huge job to do across the UK and certainly worldwide, we have to keep the messages very succinct and clear if we are to get the support and leadership that we desperately need from government.
If we can get the message across that we are united in what we believe should happen, we can use Offsite Expo to demonstrate and communicate what those few messages are. Let’s not forget offsite construction. Let’s deliver housing to a better quality going forward.
Those messages need to be succinct and clear, they need to be tactical, they need to be strategic and they need to be then communicated to all of the right places around the country to the combined authorities.
Housing delivery should be focused and we’ve got organisations that really want to support us, like Homes England, the newly resurrected MHCLG and Angela Rayner, Secretary of State and Deputy Prime Minister.
We do need to deliver an extra 1.5 million homes, 370,000 a year, but we need to be very clear of how we’re going to do that and we’re not going do that solely by improving high level policy.
We need to tell the government what our messages are and I think Offsite Expo, with its significant amount of supporters and Advisory Group membership, is the perfect place to get this message across.
