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By Dr Simon Kaye
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Off-site manufacture has the potential to transform the construction industry

Off-site manufacture has the potential to transform the construction industry
4 min read

New technologies such as off-site manufacture could considerably improve the productivity of the construction industry, says Lord Mair.

On 12 December there will be a House of Lords debate taking note of the Report from the Science and Technology Committee Off-site Manufacture in Construction – Building for change, published in July. The construction industry is worth around £100 billion per annum to the UK economy; the sector contributes 6% to the UK’s GDP. It is also vital to solving some of the pressing problems facing us: there is a lack of affordable housing, and we have ageing infrastructure that needs replacing or increasing in capacity. However the construction industry suffers from poor productivity. New technologies such as offsite manufacture could considerably improve the productivity of the construction industry. 

The Government announced the Construction Sector Deal in November 2017 as part of its Industrial Strategy White Paper. This aims to transform the productivity of the sector, focusing on the building of houses, schools, hospitals and major transport projects. A key innovation contained in the Sector Deal is the development and commercialisation of offsite manufacturing technologies, which have the potential to transform the construction of infrastructure.  

This is particularly significant for housing: to address the housing crisis at least 300,000 new homes are needed annually for the foreseeable future. Offsite manufacture can lead to lower costs and faster delivery, as well as increased quality.

Preconceptions about what has in the past been referred to as ‘pre-fab’ construction need to be dispelled. Bringing a manufacturing mindset to the design and construction of infrastructure, especially buildings, offers huge opportunities for harnessing the benefits of standardisation and factory manufacture without hampering architectural ambition. There is a need for new thinking at all levels: from clients, through to architects and engineering design consultants, contractors and the supply chain.

Our inquiry explored whether manufacturing buildings and infrastructure (or components of them) off-site could improve productivity in the construction sector. We examined the potential benefits and drawbacks of the wider uptake of off-site manufacture, as well as how Government policy, particularly around public procurement, might need to change to facilitate it. We also explored the skills required.

We concluded that there are clear and tangible benefits from off-site manufacture for construction which make a compelling case for its widespread use. These include better quality buildings and infrastructure; enhanced client experience; fewer labourers and increased productivity; creating more regional jobs away from large conurbations; improved health and safety for workers; improved sustainability of buildings and infrastructure; and reduced disruption to the local community during construction. But its use is by no means widespread. What then are the barriers? Why has off-site manufacture not been more widely adopted?

The principal barrier has been the fragmentation and lack of collaboration in the construction industry. The fragmentation of the industry makes it difficult for all parties—client, designer and contractors—to be involved from the beginning of a project. Lack of trust, and therefore a lack of collaboration, and attitudes to risk are cultural within the whole sector. This often leads to disputes which are part and parcel of the construction industry. It was clear to our committee that the construction sector needs to build trust and partnerships so that companies can work together to improve the uptake of off-site manufacture. New business models are needed: designers, contractors and suppliers must all have early involvement in a project for off-site manufacture to be successful.

In the Autumn Budget of 2017 the Government stated a “presumption in favour” of offsite manufacture by 2019 across five departments responsible for construction of buildings and infrastructure: the Departments of Transport, Health, Education, Defence and the Ministry of Justice. Clarity is needed on how the “presumption in favour” will be given more teeth by the Government. This will have a very important influence on the uptake of off-site manufacture, which has the potential to transform the construction industry.


Lord Mair is a Crossbench member of the House of Lords.


PoliticsHome Member, National Federation of Builders has responded to Lord Mair, saying "Construction SMEs are being left behind by off-site solutions". Read the full response here.

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