Part of the debate – in the Senedd at 4:10 pm on 25 February 2020.
Thank you, Deputy Presiding Officer. I'm very pleased to provide Members with an update on Welsh Government's modern methods of construction strategy, 'Re-imagining social house building in Wales', and how it will support our ambition to deliver more high-quality social and affordable homes across Wales.
Unlike other parts of the UK, this Government has continued to invest in affordable housing, providing £2 billion-worth of funding in this term of office, but we want to build more and we want to build better. Welsh social homes will be built to high space and beauty standards, embrace sound place-making principles, and, of course, be near-zero carbon in terms of emissions. Producing homes using modern methods of construction will play a vital role in making this happen.
The strategy I share with you today was produced in response to recommendations following the affordable housing supply review, which identified modern methods of construction, or MMC as it is known, as a way of more quickly increasing housing supply. Over the past year, we engaged with a range of key stakeholders and leading experts in the housing sector, construction industry and academia to co-produce and test the approach of our MMC strategy. We received overwhelming support for our proposed direction and I would like to thank everyone who contributed. Your invaluable input has helped ensure that our strategy is robust, well-supported and gives us the best chance of maximising the opportunity MMC presents for social house building and for our economy in Wales.
Although still in its infancy, there is recognition in Wales and across the UK that use of MMC can help us build better quality homes faster than traditional methods to meet housing need. We see MMC as an umbrella term that includes various construction methods, from new materials and technologies to off-site manufacturing, which either replace or complement traditional methods of construction.
Whilst some types of MMC may be more advanced than others, what is clear is that innovation in this field has advanced in leaps and bounds over the years. We have certainly moved from pre-fab to ab-fab. Gone are the days of association with poor-quality, temporary pre-fabricated housing; MMC now produces high-quality, desirable and energy-efficient affordable homes that tenants can be proud of.
Our approach to MMC aligns directly with other recommendations of the affordable housing review. It will support councils to build at scale and pace. Our grant system will ensure MMC schemes are not disadvantaged compared to traditional ones, and proposed new space standards ensure traditional and MMC buildings are treated with parity.
We recognise the need to cultivate a consistent approach to MMC adoption with our neighbours. This includes aligning to the UK-wide approach to warranties and accreditation of MMC homes to bolster lender and consumer confidence and utilising recognised definitions.
MMC opportunities go beyond house building. The strategy supports our ambitions to move to a circular economy, as building with MMC could reduce construction waste by as much as 70 to 90 per cent. Reducing emissions from the housing sector is a key element of our climate change emergency mitigation.
We are exploring how best to identify the new skills required to accommodate greater use of MMC, which represents a sea change in the construction industry. We need to ensure that the existing construction workforce is upskilled to meet our ambitions, attract new and diverse entrants and marginalised groups such as offenders, to explore employment and training opportunities.
Our plans provide real opportunity for Welsh MMC producers, many of which are SMEs and family-run, supporting Welsh businesses in finding a home-grown solution and strengthening Welsh suppliers. Linked to this is the longer term use of Welsh timber in house building.
As part of this approach, we have commenced an exercise to engage with all Welsh MMC providers to understand their capability, expertise and contribution to our social housing goals in Wales. We are fortunate to have a wealth of experienced MMC producers in Wales already supplying high-quality products to homes and commercial developments across the UK. The combination of their product, experienced workforce and indigenous supply chain means they are ideally placed and ready to respond to the increase in demand for MMC homes. We want to support these businesses to reap the rewards of increased order books and harness the economic and social benefits increased MMC production brings. Welsh Government wants to drive forward the use of MMC in social housing, and next month we are hosting a summit to bring together MMC producers and social landlords across Wales in order to share knowledge and broker new relationships and opportunities.
In many ways, we are already ahead of the game due to the success of our £90 million innovative housing programme that includes a number of MMC projects that are already under way. Nonetheless, to further accelerate the programme, I am making £20 million available for MMC businesses, who, in partnership with Welsh social landlords, want to build the next generation of social housing. I am making a further £25 million available for IHP round 4, focused on an MMC special.
Translating the strategy into tangible benefits is not solely about financial investment. Over the coming months, we will shape these aims into an implementation plan that will provide more detail on how we deliver the objectives of the MMC strategy. I will provide an update for Members before summer recess, but work has already begun in earnest. Greater adoption of MMC presents some challenges, however these are not insurmountable, and I am confident that we have identified the right approach and partners to work with to address them. Our strategy keeps us at the vanguard of new and innovative developments, ensuring that social housing leads the way in driving up standards for all housing in Wales. Diolch.