4. What consideration does the Minister give to the funding of prefabricated housing when allocating the Welsh Government's budget? OAQ53918

More than £1.7 billion is being invested this Assembly term towards our 20,000 affordable homes target. The Minister for Housing and Local Government supports modular and prefabricated housing projects through the innovative housing, three-year, £90 million programme, currently in its third year and on track to deliver 2,000 new homes.

Minister, you may have seen that last week it was announced that Japan's biggest house builder will move into the UK housing market with immediate effect after striking a multi-million pound deal that will see it work with Homes England and Urban Splash to deliver thousands of new homes across England. The £90 million deal comprises of total new investment of £55 million into regeneration company Urban Splash's house development business. And it provides a significant boost to the UK's modular housing industry and will help to speed up production of much needed new homes. I just give this as an example of how government and the private sector can work together, and I just wonder if you are looking at some of these innovative ways, and perhaps you could have discussions with the Japanese provider as well, because I think Wales would be a great place to do business too. 

Well, the affordable housing supply review, which I announced in my previous portfolio, has recently reported. And, of course, it had a specific workstream looking at the potential of off-site manufacturing and modern methods of construction. And as a result of that, the off-site manufactured social homes for rent strategy will be formally consulted on shortly, and that's been developed in tandem with the Welsh housing sector and commercial providers. It will set out ministerial expectations for the design and the standard of manufactured homes. So, we're certainly keen to be working across the sectors in order to promote this particular agenda, because we believe that the investment that we're making through our innovative housing programme will help us to pinpoint potentially two or three types of modular housing and types of off-site manufacturing that will work best for the Welsh context, and then which we can scale up because, clearly, we want to see this kind of housing become mainstream, rather than a novelty project that we all get very excited about.

Not as far as Japan, but actually much more locally, I was very pleased, David, on Monday, to join housing Minister Julie James on a visit to a project led by Valleys to Coast and the modular building specialists Wernick Buildings, delivering eight new modular homes in Sarn and Tondu, after being awarded funding from Welsh Government's £90 million innovative housing grant and supported by Bridgend County Borough Council.

These homes, as David was saying, are made up of individual modules, pre-manufactured at Wernick's factory at Kenfig industrial estate—so, local jobs, local economic benefits—before being combined on site to make a whole house. It took at little as three weeks to produce these modules, arriving on site fully fixed with appliances, heating, electrics, substantially increasing the speed of housing delivery.

So, my question to the finance Minister is: with those 50 per cent faster production times, reducing costs, environmental impacts and disruption to local residents, how do we upscale that, beyond the innovation grants and so on? How do we get it to a scale where this is the mainstream normal pattern of housing construction?

I think part of the answer is in taking forward the recommendations of the affordable housing review and the work that I've just outlined to David Melding. There's work to do, I think, in terms of consumer expectations and consumer understanding of the benefits of modern methods of construction, and there's also work to do with the financial industry as well in terms of giving the certainty that they require in terms of being able to issue mortgages for these kinds of properties and so on, which will certainly stand the test of time.

You've given one great example of what's been achieved through the innovative housing programme. I was able to go and visit Wernick myself. I would advise or encourage any colleagues who have yet to see modern methods of construction in action to go along and see for themselves what's being achieved.

Just a couple more examples: we've got the extra-care facility in Aberaman that is being built using modular components being manufactured in Newtown, and that obviously saves time and cost over traditional on-site construction, and it allows construction year-round and so on. Also, we've got a number of schemes being built to the Tŷ Solar, homes as power stations and passive standards, and they all demonstrate very high energy efficiency in the building fabric. And also, there's smart integration of renewable energy and heat, reducing carbon emissions and reducing the energy bills of their occupiers. There are so many benefits to be realised from this exciting piece of work.