Modern methods of construction

Modern methods of construction (MMC) is a term used mainly in the UK construction industry to refer to "smart construction" processes designed to improve upon traditional design and construction approaches by focusing on (among other things) component and process standardisation, design for manufacture and assembly (DfMA), prefabrication, preassembly, off-site manufacture (including modular building) and onsite innovations such as additive manufacture (3D printing). While such modern approaches may be applied to infrastructure works (bridges, tunnels, etc.) and to commercial or industrial buildings, MMC has become particularly associated with construction of residential housing. However, several specialist housing businesses established to target this market did not become commercially viable.

The MMC term started to enter common industry use in the early 2000s following the publication of the Egan Report, Rethinking Construction, in November 1998. An industry task force chaired by Sir John Egan, produced an influential report on the UK construction industry,^[1] which did much to drive efficiency improvements in UK construction industry practice during the early years of the 21st century,^[2] with its recommendations implemented through initiatives including the Movement for Innovation (M4I) and the Construction Best Practice Programme (CBBP).^[3] However, the emergence of some non-traditional methods substantially predated Egan's report; procurement of prefabricated homes, for example, was a UK government response to housing shortages after both World Wars, the CLASP created prefabricated schools in the late 1950s, and the 1964-1970 Labour government engaged in an "Industrialised Building Drive".^[3]

MMC has been repeatedly advocated in UK government construction strategy statements including the 2017 Transforming Infrastructure Performance from the Infrastructure and Projects Authority (IPA),^[4] the 2019 Construction Sector Deal,^[5] the Construction Playbook (2020, 2022),^[6] and the IPA's 2021 TIP Roadmap to 2030.^[7] The 2022 Playbook and TIP Roadmap also encouraged procurement of construction projects based on product 'platforms' ("Platform Design for Manufacture and Assembly, PDfMA") comprising kits of parts, production processes, knowledge, people and relationships required to deliver all or part of construction projects.

The UK Government has also invested in MMC initiatives and businesses. During the 2010s, as government backing (including via Homes England) for MMC grew, several UK companies (for example, Ilke Homes, L&G Modular Homes, House by Urban Splash, Modulous, Lighthouse and TopHat) were established to develop modular homes as an alternative to traditionally-built residences. From its Knaresborough, Yorkshire factory (opened in 2018, closed in 2023), Ilke Homes delivered two- and three-bedroom 'modular' homes that could be erected in 36 hours.^[8] Homes England invested £30m in Ilke Homes in November 2019,^[9] and a further £30m in September 2021.^[10] Despite a further fund-raising round, raising £100m in December 2022,^[11][12] Ilke Homes went into administration on 30 June 2023,^[13][14] with most of the company's 1,150 staff made redundant,^[15] and creditors owed £320m,^[16] including £68m owed to Homes England.^[17] L&G Modular Homes halted production in May 2023, blaming planning delays and the COVID-19 pandemic for its failure,^[18][19] with the enterprise incurring total losses over seven years of £295m.^[20]

In November 2023, Homes England loaned £15m to TopHat, another loss-making MMC housebuilder, to fund construction of a factory in Corby;^[21] in March 2024, the factory's opening was postponed^[22] and the company announced 70 redundancies.^[23] MD Andrew Shepherd left TopHat in May 2024.^[24] In August 2024, TopHat faced a winding-up hearing after a petition was filed by Harworth, a Yorkshire based property developer,^[25] but settled out of court.^[26] Also in August 2024, housebuilder Persimmon wrote off a £25m investment in TopHat it made in 2023, due to "a re-assessment of risks within the modular build sector".^[27] In October 2024, having accumulated a loss of around £87m since 2016, TopHat confirmed it was winding down its Derby factory operations, with most staff being made redundant.^[28]

In January 2024, following the high-profile failures of Ilke Homes, L&G Modular and House by Urban Splash during 2022 and 2023, the House of Lords Built Environment Committee highlighted that the UK Government needed to take a more coherent approach to addressing barriers affecting adoption of MMC: "If the Government wants the sector to be a success, it needs to take a step back, acquire a better understanding of how it works and the help that it needs, set achievable goals and develop a coherent strategy."^[29][30][31] Modulous and Lighthouse went into administration in January and March 2024 respectively.^[32][33] In late March 2024, housing minister Lee Rowley told the Lords Committee that the government would be reviewing its MMC policies in light of the crisis in the volumetric house-building sector. He promised "a full update in late spring once we have undertaken further detailed work with the sector".^[34] Following the July 2024 general election, a House of Lords Library report was published in August 2024 ahead of a scheduled debate in September 2024;^[35] it said the new Labour government would publish a new long-term housing strategy "in the coming months".^[35]

MMC refers to a variety of off-site construction methods:^[36]

• modular construction: three-dimensional units produced in a factory are transported to site and assembled and connected
• non-structural pods: for example, fitted kitchens or bathrooms that can be incorporated into load-bearing structures
• panelised systems: flat panel units typically used for walls, ceilings and floors, and made of timber, light steel or concrete, and
• sub-assemblies and components such as roof frames and floor cassettes.

During the early 2000s, the Housing Corporation classified a number of offsite manufacturing initiatives. Its classification included volumetric construction (e.g. bathroom and kitchen pods), panellised construction systems, hybrid construction (volumetric units integrated with panellised systems), sub-assemblies and components (e.g. floor and roof cassettes, wiring looms, pre-fabricated plumbing), and site-based MMC approaches.^[3]

In 2017, the IPA's Transforming Infrastructure Performance committed the government to "smart construction, using modern methods, including offsite manufacture". It said: "Smart construction (or 'modern methods of construction') offers the opportunity to transition from traditional construction to manufacturing, and unlock the benefits from standard, repeatable processes with components manufactured offsite."^[4]

Recognising that terms such as MMC, prefabrication and off-site construction were prone to different interpretations, a Modern Methods of Construction working group was established by the UK's Ministry for Housing, Communities and Local Government (MHCLG) to develop a definition framework. With inputs from Build Offsite, Homes England, National House Building Council (NHBC) and Royal Institute of Chartered Surveyors (RICS), the Modern Methods of Construction (MMC) framework definition was published in 2019.^[37] It was intended to regularise and refine the term MMC by defining the broad spectrum of innovative construction techniques being applied, enabling clients, advisors, lenders and investors, warranty providers, building insurers and valuers to all build a common understanding of the different forms of MMC use.^[37] It divides factory-produced systems into seven categories:

As previously mentioned, while MMC suggests a modern approach, some of its processes - notably prefabrication, but also standardisation of components - were extensively deployed during the 20th century. MMC, particularly in the UK, has been challenging to implement due to the volatility of the UK housing market,^[39] while the increasingly globalised nature of the supply chain for products such as panelised cladding systems also creates issues - for example, concerns about working conditions in remote off-site factories, and the de-skilling impacts on traditional capabilities in local communities.^[39] Moreover, re-classifying activities as manufacturing rather than construction would also materially impact the headline labour productivity of the construction sector.^[39] Also "Off-site factories are essentially transient entities. There is hence no guarantee they will be able to supply replacement components in the future. And the more that manufactured components rely on 'high-precision engineering' the less malleable they are in terms of future adaptation."^[39]