Agenda item

– Initial Finding and Recommendations

A report was received to introduce the emerging initial findings from the ‘SCR MMC Audit: Eco-System and Opportunity Report’, for the Board’s discussion.

Members were reminded that, at the Housing Board meeting on the 29th August 2019 the Board agreed with the need to promote Modern Methods of Construction (MMC) for housing within the City Region to meet the SCRs strategic objectives.

Three strands of work were discussed at this meeting, which had been further developed:

·           Working with neighbouring Local Enterprise Partnership (LEP) areas with similar MMC aspirations, to understand and explore matters of mutual interest.

·            Working with Housing Directors to explore the opportunities and benefits for creating a SCR MMC aggregated pipeline of schemes to support the promotion of MMC at scale.

·           Developing a meaningful and informed shared ‘model local authority policy for MMC’ across the SCR.

The Board noted that, in order to scope the regional MMC position, the consultants Cast and Arcadis were commissioned in March 2020 to prepare a report on the SCR MMC Eco-System and Opportunities.

This report explores:

·            The potential size of the future MMC market;

·            The existing supply-chain and manufacturers;

·            Research and development / innovation opportunities; and

·            Skills – what is required, and could it be delivered through our existing further Educational providers?

The Board received a presentation from Cast and Arcadis which provided a summary of the initial findings and emerging recommendations contained within the draft report. 

In summary, the following key points were noted:-

·           Manufacturing in construction is key to the post-Covid-19 recovery and there is broad Government support for MMC growth. 

·           27,000 MMC homes were delivered in 2019, estimated to support 6,400 jobs across the UK.

·           Based on cautious assumptions, the MMC sector could double in size over a decade, directly creating: 7,000 jobs and more than £1bn of GVA nationwide.

·           The SCR benefits from a strong contingent of construction supply chain businesses, a number of which are supplying the MMC sector nationally and have expanded to meet demand.

Members noted and supported the emerging eight recommendations, recognising that these were still in the early stages of development. 

D Gillespie stated that in comparison to the current capital costs, an uplift was required on the MMC provision.  She considered that as the project could be delivered much more quickly, it had the potential to provide some of the housing association partners and PRS operators with the ability to bring in rental yields more quickly, particularly where developed at scale on larger sites.  She referred to the interventions specifically within the Homes England’s portfolio, whilst acknowledging that it would not be possible for them to act on their own in relation to the leverage of shift within the market.  If it was agreed to progress with the project, then Homes England would be keen for collaborative working in the short term on the practical opportunities together with the longer-term pipeline as part of the recovery plan.

Councillor Cheetham referred to the visit made to Kelham Island to observe the MMC housing scheme developer there.  He considered that it had been difficult to discern the real gains to be achieved, whilst acknowledging from a regional perspective, that a whole raft of gains could be achieved by establishing a manufacturing facility within the area.

B Guthrie referred to the current number of underutilised MMC factories highlighted in the report, and the need to undertake aggregate standardisation in order to achieve better long term outcomes.  Homes for the North, which consisted of 17 registered providers, are currently undertaking a similar piece of work as they had recognised the need to drive demand.   SCR are at the beginning of an aggregation project which aims to deliver c150-200 units between participating local authorities. The next Board meeting scheduled for September 2020 would provide an opportunity to consider the final SCR MMC Audit report recommendations in greater detail together with the next steps for future work.

RESOLVED – That Board Members:-

1.      Noted the initial findings and emerging recommendations of the SCR MMC Audit: EcoSystem and Opportunity Report.

2.      Noted the timescale for completing the Report and the associated work being undertaken to explore the opportunities for MMC in supporting the ambitions of the new emerging SCR Strategic Economic Plan.