Using modular, offsite construction thousands of new homes will be built in factories, rather than on-site. Sekisui House delivered 43,735 homes last year, close to 5 per cent of Japan’s total and during its 59 years of operation, the company has built more than 2.4m dwellings. The British government has set a target to build 300,000 new homes a year by the mid-2020s. With current delivery at about 200,000, policymakers are seeking new avenues to stimulate building. “By helping bring one of the world’s largest and most innovative housebuilders to UK shores, we’re putting our money where our mouth is,” said Sir Edward Lister, chair of Homes England, quoted in the FT. Urban Splash will invest £37.5m equity into the new venture. A further £21.9m will come from Sekisui, while Homes England will supply £3.1m in equity and £26.9m in debt funding.

The fact that this stimulus to quality has come from Japan will not be lost on historians of UK manufacturing. The ailing British car industry was revivified in the 1980s by Japanese ownership and manufacturing techniques as poor quality “Friday afternoon specials” were replaced by the kaizen approach. Right first time became a watchword that the UK construction sector would do well to learn from now. And this is a sector where contractors work on an average margin of just 1.5% according to the Construction Index and its products don’t enjoy the best of reputations – when the government surveyed the general population 60% of respondents said that, given the choice, they would rather live in an old than a newly built house.

The opening provocation came from Keith Waller, a seasoned player in the UK construction world. Waller is programme director at the Construction Innovation Hub (CIH) and has 30 years work in major construction and infrastructure under his belt.

Waller explained that the CIH was born out of the government’s Industrial Strategy published in 2017. £170 million will be invested over four years to attempt to transform the sector and £72 million of that will go to the Construction Innovation Hub, a tripartite venture between The Manufacturing Technology Centre, BRE and the Cambridge Centre for Digital Built Britain. Waller said that the development of rules, standards and assurance for products was important and that heed would be made of the report by Dame Judith Hackitt. Information management and the sharing of data was also important.

“But”, he said, “If we do all those things over the next four years and produce all the outputs that we need to produce without proper engagement from government and industry then nothing will change. Why? Well digitally enabling manufacture isn’t our end goal at all. As a nation we invest around £65 billion each year in our economic and social infrastructure and that’s schools, prisons, hospitals, railways, airports, utility airports.  That’s excluding housing, that’s excluding commercial, industrial. And that is procured from a multitude of public sector departments, agencies and bodies and through regulated utilities and some private sector companies.

“So £65 billion a year, but the question we should be asking ourselves is not how we manufacture more, or how we use data more.  We should be asking ourselves how do we deliver better social, economic and environmental outcomes from that investment. How does that investment support driving productive growth and rebalancing the economy and de-carbonising infrastructure and reducing the amount of waste, and reducing the harm that we do to people through the construction process, reduce the impact that we have on local communities and support businesses to develop and grow.

So our focus then should be how do we deliver better outcomes. So our challenge at the moment is most procuring authorities tend to value through the lens of initial capital cost, and actually what we need to be doing is understanding value through a different lens.

“One of the things that construction does, very, very well, is it describes what it does.  It doesn’t describe what people get from it particularly well.  So actually we need to start changing the debate from how cheap can we build it, and how much risk as a business are we willing to take in a very fragmented and non-productive industry, and start trying to value things in a slightly different way.

“When people talk about design for manufactural assembly, or modern methods of construction or off-site construction, they are all terms that excite people – even ministers –  but actually all they are is a way of describing the capital phase of a project and not the outcomes, not the through-life performance, not how these things can help people’s lives and build a better society.”

Damini Sharma the managing director of OM group said:

“Industrial Strategy makes hard reading and it’s not for Joe Bloggs. I wouldn’t say there is a huge amount of trust in central government and its strategies at the moment.  We are a consultancy practice to the construction sector and we work from SMEs all the way up to your big corporates and large construction companies. But one fundamental thing missing is that sharing of knowledge, information and forward thinking from the top level all the way through the supply chain so that everybody from your guys at the bottom of the supply chain and supplying the bare, basic raw materials upwards has the same knowledge and information and can see the future in the same way.  That’s how we’ll convince the mass market. It’s got to be at grass roots level, so it can really make a difference”.

“But one fundamental thing that is missing is that sharing of knowledge, information and forward thinking from the top level all the way through the supply chain so that everybody, from your guys at the bottom of the supply chain and supplying the bare, basic raw materials upwards has the same knowledge and information and can see the future in the same way.  That’s how we’ll convince the mass market. It’s got to be at grass roots level, so it can really make a difference”.

Just how tough things can be at ground level on a building site was brought home by Richard Duxbury a senior design and build manager at Deeley Construction. “In my experience it’s always money that leads conversation. So the projects that we tender for and win – a lot of my work is negotiated but we do tender work as well – the first question that we always get asked when we submit any bids is ‘can you reduce the price down, it’s over budget?’ So something has to give. It’s simple. The products have to be reduced down in specification in some way, shape or form”.

“There is a quality issue in the industry, without a shadow of a doubt, that’s down to labour forces.  We are struggling with the major bricklaying, plastering and painting contractors in delivering, because there is such a vast amount of work and they’ll take anybody on these days. You’ll get people who get dropped off in the morning and they haven’t painted before…”  So the person paying for construction is paying to train the workforce as well, effectively? “That’s what we’re finding at the moment. We’re having to manage everybody down to the nth degree. Because the resource isn’t there to do it anymore.”

A powerful reason, one might think, to get construction done by machines in factory. Many around the table thought that radical and enduring change in construction wasn’t ever going to come from the UK domestic housing sector. “It’s likely to be driven by social infrastructure because government is such a big investor and should be taking a long term vie”, noted one participant.

“Housing is a difficult one. 60% of owners saying they don’t want a new house is a kind of red herring. In Japan they re-build houses every generation and that’s utterly not sustainable. We have to think about the sector as doing maintenance as well as doing new-build. Rather than trying to persuade everybody that they should be buying a new house like they buy a new car, it should be more about how do we create the outcomes that people want out of the built environment.  Some of that is going to be about maintaining the existing environment, and getting the sector involved in doing that, and some of it’s about building new things. I would agree that the social housing element is easier to do as modular, because people have long term commitments to the properties.  They’re not building them for sale, and so we have seen the rise of off-site in things like student accommodation and in social housing. That’s where the examples are and we’ve got the world’s tallest modular building, residential building being constructed in the South of London at the moment”.

Martin Ganley of BRE was also interested in the role government might play in open standards which would assist the SME sector. Others felt SMEs were potentially vulnerable to increased power that the big house builders would garner with offsite, modular processes because their mass and scale would squeeze everyone else out. At the same time the serious fragmentation of the industry was accepted as a problem with all the lack of economies of scale that implied. What happens to the trades if robots lay bricks and put plaster on walls? If it’s true, said one participant, that inefficiencies in construction meant that every piece of material that is delivered to a UK building site is moved four times around that site before being put to use and for every house in the UK we send seven tonnes of waste to landfill then roll on factory fabrication. Others were concerned that automation and off site might lead to such an increase in supply that too much product on the market could depress prices.

“There’s a huge generational gap in this industry. It was largely the young behind the Extinction Rebellion protests and it’s not difficult to see where they are coming from. I now take a good wage from what I do and I can’t buy a two-bedroomed flat in Kidbrooke in South East London. And I’m the founder of a multinational company, and what that says is that there is a huge gap in housing that needs to be filled. We have a duty of care and responsibility as a country and as a people to push these new methods, but also we have to make sure that the timber frame systems aren’t just being thrown out there and maximised on with everyone being told it’s the best thing since sliced-bread when it’s been around for a while.  Let’s be real about the situation and at least even talk about how concrete gets stronger over time.  Let’s give them the facts.  By giving them the facts that should hopefully allow people to interpret that easier”.

“We have gone from a generation that used to send mail to being a generation where I can call over Skype anywhere in the world immediately.  The problem in construction is that the policy makers, as wise and knowledgeable as they are, probably aren’t as adapted to change.  I’m speaking with MIT and Ori about moveable walls and a walk-in closet that changes, and your bedroom goes in to your ceiling. In the 50s and 60s you had 50 draughtsmen to a building. Now you can create a 20 storey building in Sketch Up in less than three and a half hours. Actually making more smaller spaces more flexibly is happening in places like India and places like Hong Kong and Japan. We need to introduce this here because it’s critical for space when you’re building high rises.  Unless we make that change I feel that the industry is still going to stagnate and none of us will be able to innovate effectively because it won’t be accepted and I think it’s re-writing that on how we innovate these two areas together”.

Niall Trafford of BRE closed the discussion: “The interesting thing for me about the debate that we’re having today and it’s been echoed around the country is that we talk about innovation, we talk about the vital need to do things well  and differently and that how that will provide greater quality, comfort, sustainability and wellbeing …but then all too often it becomes a conversation about cost.  I find that really, really interesting, because the reason that we started to do this was because of Grenfell because it shocked everyone to the core, there was a real quality issue there related to cost and that quality issue continued to exist around the country now.  The driver has to be, who’s asking the right question in the right place. So it’s not a question of whether or not you shilly-shally around the edges and what you can get around, for what margin.  I know people mean have got businesses to run, but the core question if it comes down to what kind of Britain are we building is precisely that. Making a stand for doing it right”.