To solve the housing crisis, plan ahead for materials supply
Michael Gove has returned to Government, and the target of building 300,000 new homes per year by the mid-2020s has returned with him.
Housing is one of many areas where ministers hope to build their way out of Britain’s socioeconomic challenges. New offshore wind and nuclear power plants are touted as a way of achieving net zero while bolstering energy security. New roads, railways, and upgrades to existing transport infrastructure form part of Gove’s levelling up agenda.
Part of the economic benefit of these ambitions is the demand they generate in construction supply chains, including for building materials such as aggregates – the crushed rock, sand, and gravel from which we make concrete, cement, and asphalt. As a product of the mining and quarrying industry, aggregates are essential for housebuilding and infrastructure, underpinning the delivery of the Government’s strategy for levelling up, the energy transition, climate mitigation and adaptation, and net zero.
Britain is fortunate to have all these materials in abundant geological supply, and the industry remains largely domestic, supporting local jobs and growth. In fact, over 90% of aggregates, concrete, and asphalt used in the UK is extracted or produced here; while 74% of UK cement is also produced domestically.
However, this does not mean the future supply of these materials can be guaranteed, especially if the Government wants a housebuilding boom and numerous major infrastructure projects on the horizon. The supply of essential and strategic minerals, including aggregates, has to be managed, monitored, and facilitated in the planning and permitting system.
Recent research by the Mineral Products Association (MPA) found that aggregates demand is projected to increase by 70 million tonnes per year by 2035, increasing from 253 million tonnes in 2021, to 323 million tonnes by 2035. Over the next 14 years, between 3.8 and 4.1 billion tonnes of aggregates will be needed to supply our construction needs. This compares to 3.2 billion tonnes of aggregates used in the previous 14-year period.
Whilst there is no shortage of rock, sand, and gravel available in the ground, it is becoming increasingly difficult to get permission to extract it. In fact, a key factor influencing the supply of aggregates is the operation of the mineral planning and regulatory systems. For the past decade, statistics collected by the MPA show that for every 100 tonnes of land-based sand and gravel consumed, only 63 tonnes is being replaced with new permitted reserves. This low replenishment rate of 63% means the tonnage of permitted reserves is falling by over a third every decade.
Alongside its demand projections, the MPA also set out a number of scenarios for how this future demand could potentially be met, particularly if the declining trend in permitted reserves of land-based sand and gravel is not reversed. These scenarios highlight how a continuing decline in permissions for land-based sand and gravel is likely to increase pressure on the supply of local aggregates, with greater dependence on larger crushed rock quarries and marine sand and gravel.
Sources of aggregates derived from the recycling of hard construction and demolition waste, and other industrial processes, already play a key role in meeting our aggregates needs and will continue to do so, but their potential to increase much further is limited – the overwhelming majority of hard construction and demolition waste is already recycled, for example. Primary aggregates are expected, therefore, to continue to meet over two-thirds of overall demand for the next 15 years.
It will be a challenge for the supply to adapt. The replenishment rate for crushed rock reserves is 76% over the last decade due to similar planning and regulatory issues, and this decline will need to be slowed and reversed. There is also a clear issue of speed and scale, especially related to the infrastructure needed to transport materials from where they are extracted to where they are needed. This will include rail depots, marine wharves, and the skills necessary to operate this infrastructure.
In one scenario, which focusses on increasing marine sand and gravel supplies to replace land-based sources, marine sand and gravel extraction would need to quadruple in just 15 years, which would require an explosion of infrastructure – wharves, transport connections, and dredging vessels.
This, of course, would require a significant level of private sector investment. Against a backdrop of unclear construction material needs associated with infrastructure and housebuilding plans, a lack of strategic approach to assessing future aggregates demand at all levels of government, repeated delays and U-turns on major projects, and challenging forecasts for the wider economy, this too will be a substantial ask.
Due to these challenges, meeting our growing demand for aggregates will become increasingly difficult as we enter the 2030s, if we continue on our current trajectory. But the Government can take action to avoid potential headaches in the future.
Future availability and supply of aggregates needs to be planned, monitored, and managed – not simply assumed. Greater transparency about construction material needs for major infrastructure projects would be helpful, providing businesses and planners alike with some much-needed clarity. A more strategic, long-term approach to inform the Managed Aggregates Supply System (MASS) would also allow businesses and planners to respond in a timely manner to ensure the right materials are available in the right place, at the right time.
More broadly, mineral planning should be reformed and planners better resourced in order to make the system more accessible and more consistent. This will help cut out the delays, costs and uncertainty for industry, and boost business confidence in applying for new crushed rock and land-won sand and gravel extraction. Ultimately, more permitted reserves of primary aggregates will need to be unlocked to ensure demand can be met; because imports, recycled and secondary materials will not be able to fill the anticipated gap and fulfil all the demands created by our future construction needs.
Aggregates extraction is an important part of our rural economy in its own right, and a necessary component of the construction and infrastructure projects that ministers hope will make housing more affordable, our energy supply more secure, and our communities better connected.
In fact, aggregates-based products are so ubiquitous that it’s easy to take them for granted. It is time ministers heed the warning from this recent research and recognise that the need for a long-term, strategic approach to the supply of mineral resources, which are so essential for the housebuilding and infrastructure projects of the future.
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