As a pioneering innovation to social value investment, Kier announces its partnership with specialists Social Profit Calculator (SPC), consultant Rider Levett Bucknall, framework specialists Pagabo and modern methods of construction (MMC) experts Akerlof, to develop a social value calculator dedicated to MMC.
John Handscomb is procurement lead at Kier and oversees the business’ modern methods of construction strategy. Here, he explains how the increased use of MMC can help drive social and economic prosperity in the most deprived areas of the UK, using the Modern Methods Social Value Calculator as a tool to assist with holistic decision-making at project level.
“As the construction industry continues to wrestle with the ‘productivity challenge’ at a macro scale, the Government has sought to improve national economic growth through improving wellbeing in poorer areas and narrowing productivity gaps regionally. Data analysis shows regional imbalances, with disparity in employment, investment and quality of life. To address this, the new catchphrase in Prime Minister Boris Johnson’s government is ‘levelling up’ – raising the economic performance in all parts of the UK.
By using MMC – effectively moving elements of the construction process beyond the confines of the site hoarding – we bring investment to deprived areas and sustainable jobs to their communities. The Government recognises this, reinforcing its ‘presumption in favour of’ offsite through the appointment of Mark Farmer, CEO of Cast Consultancy, as ‘champion of MMC in housebuilding’. Mark is “charged with developing the ‘construction corridor’ in the North,” starting with £30m Homes England investment to the area, announced pre-Christmas.
MMC comes with significant benefits, but recent research has shown that just 7% of UK construction is currently undertaken in this way. By increasing this proportion to 25%, the WPI Economics report for Heathrow shows that productivity in the sector could increase by 3.6% with much of this growth coming in areas of the country that would most welcome it.
The report also concludes that significant expertise and experience of offsite manufacture currently sits outside of the capital and, coupled with lower land and labour costs, this means that increased offsite manufacture will provide significant economic benefits to regions outside of the major cities and particularly London. Modelling in this report shows that, by boosting employment and utilising skills and expertise outside of the Capital spur to growth outside of London could be worth some £15 billion.
Our map below illustrates the location of offsite manufacturing facilities mapped against areas of deprivation. It demonstrates how an increase in MMC provides the opportunity to address construction skills shortages in London and the South East by moving activities from these regions and creating sustainable employment in other parts of the UK.
Our Modern Methods Social Value Calculator enables the assessment and visualisation of social value to identify the holistic impact of construction, not just on site, but also at manufacturing locations through the supply chain.
Whilst the promise of ‘levelling up’ sounds attractive, the ability to import holistic economic considerations into a ‘Procuring for Value’ agenda at a project level remains a challenge. Our calculator looks to addresses this hurdle. Underpinned by Industry and Office of National Statistics data, it enables the evaluation of MMC options on a broader basis than direct capital cost; quantifying the benefit of the social value investment and productivity-enhancing potential.
In simple terms, offsite manufacture is often routed in the former industrial heartlands of the Midlands and North, providing the opportunity to help rebalance the UK economy, improve national productivity and support a regionally-balanced, safer, and more sustainable construction industry.”