Ben's blog: why Eric Pickles needs to look beyond just prefab to tackle the nation’s housing crisis
This year, the subject for the annual debate organised by Countryside Properties that honours the memory of Alan Cherry was, ‘The supply of (affordable) housing in London and the South East – how can we increase it?’ Eric Pickles gave a keynote address in which he impressed his three top priorities upon the assembled company; 1) Build, 2) Build, 3) Build - and please do so using off-site manufacture.
Building magazine – which also runs the event – reported my ‘astonishment’ at this. To be clear, I was actually pleasantly surprised at the Secretary of State’s positive attitude to technical innovation in construction. Of course off-site manufacture has a role to play in meeting the demand for more homes. We have wide experience of this at HTA and there is no doubt that without pre-fabricated techniques the traditional supply chain will struggle to achieve the numbers that are being talked about in London. But I was fairly aghast about the things Eric Pickles did NOT say about measures to meet the demand for homes - in particular measures that will increase the supply of land and stimulate increased investment in housing and infrastructure!
In the end it all comes down to measures that will stimulate a sustained and substantial increase in supply. It is widely understood that we need to double the output of new homes to head off serious social and economic damage to the nation.
If we succeed in this, we might then begin to see real growth in high quality prefabricated housing development because volume is what the capital intensive manufacturing processes need to make them operate economically. To put it another way, some of us have been around long enough to have seen the sad legacy of closed factories and neglected prototypes; the broken dreams of off-site entrepreneurs caused by boom and bust in the homebuilding industry.
So, in my book, it is for Government to create the right circumstances for a supply of land and investment finance that will give rise to a healthy off-site industry thriving on predictably high volumes of production. The means of production follows demand, in other words, and off-site manufacture will be a consequence of high volume, not a cause of it.
I’m reminded of John Prescott’s ‘Design for Manufacture’ initiative, subsequently and unwisely saddled with the ‘£60K House’ moniker. We entered this competition for sites using the Barratt/Terrapin Advance system that came out of a wondrous factory making prefabricated homes, all type-approved for Building Regulations and ready to occupy off the back of a lorry, so to speak. Our proposition was an offer Prescott could not refuse, because the factory needed the throughput from the English Partnerships sites to break even and to raise volumes to the point that unit costs were cheaper, not more expensive than traditional.
But it was not enough. The credit crunch killed it and the factory was sold off anyway. I believe Prescott’s motivation was unimpeachable - it was to improve working conditions in the housebuilding industry at the same time as providing better living conditions.
So if Pickles wishes to take up where Prescott left off, and if we are serious about a future which combines elements of an industrial strategy with a housing programme – and I think we should be – conditions for investment in both will require commitments that will transcend political boundaries, outlast terms of government and have built-in countercyclical mechanisms to overcome bear markets.
We are almost there with a cross party consensus for doubling housing supply. In a way, I suppose I’m most astonished we have not managed to make it clear to Ministers what’s really needed to pull this off.
Ben Derbyshire is managing partner of HTA Design LLP
This article first appeared in Building Magazine, 29.05.14