UK government plans to revamp holiday pay calculation for part-year workers
Out-Law Analysis | 20 Dec 2021 | 3:37 pm | 5 min. read
The three key strands of modern methods of construction (MMC) – design and construction, manufacturing and smart homes – need to be brought closer together in order to industrialise building in the future.
That was the conclusion of participants at a recent roundtable forum on Accelerating Modern Methods of Construction hosted by Pinsent Masons. The forum focused on the role of technology and how construction can be industrialised, examining a platform approach to MMC as well as the key issues surrounding the insurability of MMC.
The UK government set out a long-term vision for a platform approach to construction in the National Infrastructure and Construction Pipeline and transforming infrastructure performance roadmap, both published in August 2021. A total of £78 billion of projects are set out in a 10-year investment pipeline where MMC could be used.
The government has said it will mandate a platform approach to design for manufacture and assembly (P-DfMA) for social infrastructure within two years.
The Internet of Things (IoT) is already well established within homes and the market is only going to grow, particularly as analogue systems are gradually switched off and the drive towards zero carbon continues.
The real estate sector could use data trusts which add a cyber physical layer into the development process and create a trusted digital environment
IoT data can be used to demonstrate how a building performs to environmental standards over time. It also enables defects to be identified early and rectified by contractors and suppliers.
Smart technology such as home management and surveillance will be of particular benefit to sectors such as later living and the care system, and connected homes will become part of the smart city.
There was consensus among participants at the Pinsent Masons roundtable that technology is evolving at a much faster rate than the market can keep pace with. This creates a challenge when deciding which technology to invest into, as there is a danger that it may become obsolete within a short space of time.
Embedded technology has many potential benefits such as healthcare and environmental assessment, as well as the contribution of data for the public good for the smart community.
However, it is important to consider the issues surrounding data such as ownership, privacy, and ethics. For example, sensors embedded in buildings gather data which falls under the General Data Privacy Regulation (GDPR), while the UK Information Commissioner’s Office recently announced a provisional intent to levy fines for misuse of facial recognition technology.
The Public Algorithm Bill recently introduced into the House of Lords shows that there are concerns in respect of these technologies at a high level.
It is important to have policies and frameworks in place regarding the use of data and transparency. The Cabinet Digital Office has recently published a transparency standard which encourages local authorities which use algorithms to support a decision to use a transparency tool to specify how the algorithm is being used and how any impacts have been mitigated.
The real estate sector could adopt a similar approach by using data trusts which add a cyber physical layer into the development process and create a trusted digital environment.
A platform approach to MMC offers the continuity of a visible pipeline and a consistent team, as well as creating economies of scale all the way through the supply chain.
However, achieving this approach requires a different mindset to traditional commercial construction, which is centred on low-priced tenders and keeping overheads as low as possible. A platform approach to construction can help standardise the design process, while still allowing customisation. The approach can also encourage a focus on continuous improvement rather than reinvention.
People, processes and tools are required to be able to develop at scale using MMC. One company participating in the roundtable is adopting a product-based platform approach as an operating system, looking at various outcomes and problems associated with traditional construction methods such as product performance, social impact, skills gaps, materials shortages, and embodied carbon to address all these different aspects. It is envisaged that a standardised approach will help to eliminate claims and defects.
Creating an efficient, capable manufacturing supply chain requires investment, but those providing development finance regard industrialised construction as risky. Roundtable participants said more government support was needed, ultimately through subsidies.
“The new homes bonus consultation which concluded in spring looks at the possibility of MMC homes being incentivised as part of the bonus – this is the direction of travel needed to help members of the industry overcome these challenges,” one participant said.
Another participant noted that there has been more of a shift towards MMC and new models of working due to the Covid-19 pandemic but agreed that for manufacturing at scale to take off, it needs policy oversight from the government – for example a stipulation that a certain percentage of homes on a development must be built using MMC.
Building information modelling (BIM) was introduced over a decade ago and there is now a drive to record information on the projects it is being used in and the creation of data standards. For example, the UK BIM Alliance has produced a plain language guide to product data for manufacturers, providing guidance on why structured data is important and implementing information management across the supply chain for products.
Meanwhile Innovate UK has looked at creating digital connectors between project elements to enable different components to become connected.
Roundtable participants said a holistic approach is required for BIM processes to be successfully embedded, with a need for committed leadership and management, digital transformation strategies, skilled suppliers and trust-based relationships with clients. Collaboration and data sharing is also key; data sharing agreements are becoming more commonly adopted and used to safely share data across the project ecosystem.
There was concern among roundtable participants that the challenge of insuring an MMC product is a barrier. There is a distinction between warranties and operational building insurance. Warranties that are accepted by mortgage lenders are essential for selling residential properties constructed using MMC.
The National House Building Council (NHBC) dominates the warranty market, accounting for around 60 to 70% of market share. Government frameworks in particular tend to have very traditional requirements for warranties, usually NHBC. However, NHBC has been slow to adopt certain MMC products; other providers can be more accepting of MMC
One participant commented that the insurance industry needed to look outside the UK to gain an understanding of the performance of MMC technologies, saying: “The insurance industry in the UK is still talking about the tech as if it’s new and inventive. However, these technologies are well established elsewhere in the world.”
The insurance industry is highly regulated, which restricts the ability of the insurer to take on a lot of risk, and relies on backwards-looking data to determine the performance of a building. However, for MMC products in the UK, the data is simply not available.
This shows that for MMC to be truly embraced in the UK, there is still much which needs to change – but the industry is taking steps in the right direction.
06 Aug 2021
05 Aug 2021
UK government plans to revamp holiday pay calculation for part-year workers