Councils often want a guarantee that construction projects will create local jobs, but Mark Bolger argues for a whole life value approach when considering the benefits of MMC
From the Construction Playbook to the Homes England MMC study, the industry is being called on to embrace modern methods of construction (MMC). For the most part, the response has been a resounding yes as MMC is seen to provide huge benefits in terms of efficiency and environmental impact.
Where the positive element of MMC is less clear is in terms of social value. With traditional construction, a project can be designed, constructed and built all in the same location. So, if you are looking to sell a local council on the impact of an infrastructure scheme to their local community, you can quite clearly show the number of new jobs created locally and investment in the local supply chain.
However, if you are using MMC, while the scheme may be designed locally, a varying proportion of the works will take place in other locations. So, what would have been hundreds of jobs created in the local community now becomes hundreds of jobs created in a MMC factories in other parts of the country.
So, can MMC and social value work hand in hand? I firmly believe that yes, they can, but only if we look at whole life value. Whole life value looks beyond the construction phase and is the key to unlocking sustainable social, economic and environmental outcomes when projects are operational. Since the introduction of the Social Value Act in 2012, we have focused on procurement as the vehicle for delivering social value but that social value ends when the construction phase ends and the project is handed over to the client.
If our aim is to create long-term sustainable jobs, arguably these are better created in permanent MMC factories rather than on transient, short-term construction sites
MMC provides a vehicle for delivering social value in the context of whole life value as it enables us to think beyond construction and local value. Once a project is handed over to the client, that is when the real social value and legacy is created.
MMC has the potential to deal with multiple social, economic and environmental inequalities at a UK plc level by encouraging suppliers to invest in manufacturing and production factories in areas of deprivation. MMC can create sustainable manufacturing jobs and digital skills opportunities for the next generation, supporting economic productivity in the areas that need it most.
MMC can also create an intrinsic social and economic uplift of up to 36% higher compared with traditional construction methods as the social and economic multipliers for manufacturing are higher than construction, particularly if future MMC investment take place in areas of deprivation. The drive for net zero is also bolstered through MMC as the use of low carbon technology and sustainable materials can also reduce lifetime operational costs, balancing out the costs of MMC construction.
So, if the government wants to push industry to use MMC on projects, it is essential that they look at social value in terms of whole life value creation. MMC providers by their nature will be based only in specific locations across the country. You simply cannot guarantee you will only use the local supply chain if MMC expertise and capacity does not already exist locally. Particularly for projects in rural areas, a 40% MMC spend locally at the construction phase is just not achievable.
Focusing on whole life value encourages consideration of long-term social, economic and environmental impacts during operational phase rather than just procurement. So, opting for MMC may appear to create less jobs locally, but it can significantly reduce social and economic inequality while lessening the impact on the environment and operational costs year on year.
One approach might be creating a “Local Credit for National Spend”, the idea that a local authority will be credited back – perhaps into their social fund or apprenticeship fund – for project value that is picked up by a MMC supplier elsewhere in the country where the industrial infrastructure may be better or may be needed.
If our aim is to create long-term sustainable jobs, arguably these are better created in permanent MMC factories rather than on transient, short-term construction sites. The implementation of MMC also breaks down the construction process into smaller component delivery and creates greater opportunities for SMEs.
If we want to see an increase in both MMC and social value, then the traditional approach of creating social value in the construction phase needs to change. Despite the move to encourage MMC and other innovations, the way we view social value is still very rooted in the traditional view of construction jobs and methods. If we focus on whole life value, we can tackle not only MMC and social value, but the wider agenda of covid recovery, build back better and the levelling up agenda.
Mark Bolger is social value director at Atkins