Out-Law Analysis 2 min. read
07 Nov 2022, 10:19 am
There is growing acknowledgment across government and industry of the opportunities modern methods of construction (MMC) offer for delivering infrastructure projects in a more efficient and sustainable way.
This has been reflected in the discussions Pinsent Masons has had with over 100 clients including experts from across government, construction, real estate and financial services that have explored how the use of MMC might be accelerated.
These discussions, together with work we have been involved in with clients, have given us a deep insight into the barriers to the use of MMC by organisations involved in delivering major residential, real estate and infrastructure projects.
The potential for MMC to revolutionise the way infrastructure projects are delivered, to the benefit of the construction industry, the economy, and the environment, makes the compelling case for tackling the remaining barriers to its adoption
MMC is a broad term that encompasses a range of alternative off-site and on-site manufacturing techniques. It is a means of delivering residential, commercial real estate and infrastructure projects that offers scope for greater standardisation and commoditisation in construction. Whilst the adoption of MMC will not be appropriate for every project, it has the potential to drive significant efficiencies, radically improve productivity, and help the construction sector align with net zero – if implemented correctly.
The adoption of MMC requires a move away from traditional contracting in construction to contracting models that are collaborative. This requires incentives, risk and liability to be addressed differently from the contractual norms developers and construction companies are used to, and it requires process and culture change to make the shift to a service provider business model work.
Many developers and construction companies have already made changes to the way they operate to embrace MMC, but there are still challenges to overcome.
While the UK government has put MMC at the heart of its Construction Playbook – a document that sets out the UK government's approach to, and expectations of, future public works projects including roads, railways, schools, hospitals, and prisons – there remains a lack of understanding of the concept within some local planning authorities and developers, and often different planning requirements to navigate in each planning authority area. Further problems exist in insuring MMC products, particularly given the insurance industry’s wariness to provide cover for what it perceives to be new and untested systems, processes and technologies.
There are funding challenges too, especially as lenders face pressures of their own to channel their support towards projects capable of demonstrating environmental sustainability amidst the wider drive to net zero. The challenge here is not that MMC does not align with the decarbonisation agenda; it is in proving that it does. Reliable carbon data, gathered and reported in accordance with accepted standards, would help significantly in this regard. The Net Zero Carbon Building Standard (NZCBS) is expected to provide a single agreed definition and methodology for the industry for verifying buildings as net zero.
The development of digital twins of infrastructure assets could help in respect of carbon data too. They also have a vital role to play in supporting compliance with building safety obligations. The digital skills shortage is an obstacle in this regard.
Ultimately, there has to be demand for MMC products and this means that there has to be a reliable pipeline of projects in place to scale up the market. Procurement policies and practices can help promote MMC too, but the supply-side of the market also needs to be sophisticated and robust enough to successfully deliver the projects.
The potential for MMC to revolutionise the way infrastructure projects are delivered, to the benefit of the construction industry, the economy, and the environment, makes the compelling case for tackling the remaining barriers to its adoption.
Together with its clients, as well as The Royal Institution of Chartered Surveyors and Constructing Excellence as well as Make UK Modular and the expertise of business, government and finance experts, Pinsent Masons is currently developing recommendations to government for targeted measures to accelerate the use of MMC. In doing so, it will aim to inform government policymaking to support greater productivity, economic growth and decarbonisation in the construction process.
Co-written by Iain Gilbey of Pinsent Masons.
20 Dec 2021
07 Jul 2021