Construction sector deal is not a government handout

Faced with low productivity and a growing skills shortage, we need to urgently reform the way we build if we’re to deliver new homes, infrastructure and commercial real estate to support the UK’s economic growth.

But we need to remember that this is a deal, not a handout from government. Nor is it just the concern of contractors. Delivering better construction requires commitment from developers and asset owners too.

Kickstarting investment in modern methods of construction (MMC) is key. To date, MMC in the UK has been limited to a relatively small number of large trailblazers with the funds and pipeline to justify the large capital outlay required. The deal needs to deliver direct investment in offsite manufacturing hubs so we can move towards true component-led design.

Commitment from industry

At the same time, we need the digital skills to maximise the potential of these techniques. The property sector has a vested interest in these changes, which will see quicker delivery with greater certainty of cost and programme, but also better long-term performance and management of assets under occupation.

Developers therefore need to work with their supply chains and the government to make this deal a success.

Direct investment of £170m is being supplied from government in return for £250m match funding from industry, but long-term success will depend on a commitment to use these new techniques and skills in development. Only then will they become fully commercialised and ultimately self-funding.

The fragmented and cyclical nature of the property and construction industries has historically hindered investment in new tools and techniques. This deal is a mandate to establish a different dynamic whereby greater construction productivity supports better real estate performance.