Planning Committee report into offsite manufacturing and the Mayor's Housing Strategy

MQT on 2017-09-14
Session date: 
September 14, 2017
Question By: 
Nicky Gavron
Labour Group
Asked Of: 
The Mayor


What role do you see for offsite manufactured (OSM) homes contributing to the objectives identified in the Housing Strategy and wider strategic objectives?


Answer for Planning Committee report into offsite manufacturing and the Mayor's Housing Strategy

Answer for Planning Committee report into offsite manufacturing and the Mayor's Housing Strategy

Answered By: 
The Mayor

Sadiq Khan (Mayor of London):  Can I, Deputy Chairman, through you, congratulate the Planning Committee for producing such a timely and important report?  I agree that we need to support greater housing delivery in London through additional housing construction activity that takes place in factories, which is what we mean by offsite or precision-manufactured housing.  We cannot deliver the number of new homes we need using traditional methods of construction alone.  That is why alongside our work to boost construction skills in London and to secure access to the single market after Brexit, we need to support a greater role for precision manufacturing in home building.  This has the benefit of boosting overall capacity in the construction sector and offers the potential of greater consistency and quality control, alongside additional benefits in terms of speed, delivery and cost efficiencies.


In my new draft London Housing Strategy, I set out how I will support precision-manufactured homes.  I will do this by providing direct funding for these homes through my Affordable Housing programme, particularly through the Innovation Fund and my strategic partnership with housing associations. The first round of my Innovation Fund received a large number of bids, many of which were related to precision-manufactured homes.  I recently announced the first Innovation Fund contract with Pocket Living, securing a deal under which at least a third of the 1,000 homes will be precision manufactured.  I hope to announce further deals on an ongoing basis.


Alongside this, I am negotiating with Government to secure a London share of the National Accelerated Construction Fund in order to further support precision-manufactured housing in the capital.  My new London Development Panel, which I am currently procuring, will include experts on precision manufacturing to support the public sector and housing associations to bring forward housing development.


My team is working also at how we can further support manufacturers and developers in working together to aggregate demand and build more homes through precision‑manufactured housing.  Precision‑manufactured housing not only has the potential to have a positive impact on the pace, scale and quality of home‑building but also to contribute positively to wider objectives.  A more pleasant, safe and high-tech working environment has the potential to increase the attractiveness of the construction industry to a new pool of workers.  It also provides an opportunity for London’s growth to contribute even more to the prosperity of the whole of the country through the location of manufacturing facilities across the wider South East and beyond. 


Nicky Gavron AM:  Thank you very much for that very comprehensive response.  Given that you are clearly seeing that offsite manufactured homes meet a whole range of your objectives and that you are consulting currently on your Strategies ‑ Transport, Environment, Housing, and Economic Development to come ‑ and then of course the London Plan, will you consider including policies and mechanisms to galvanise the sector when you come out with your final Strategies?


Sadiq Khan (Mayor of London):  We have to.  We have to find ways to support the sector.  It is a new sector.  One of the things that really attracted me to it when I was reading about the sector after reading your report was how we can use the sector to help other parts of the country, actually.  Precision manufacturing will not just help London but will help the rest of the southeast and the UK as well.  Not only are we going to use the various Strategies we have, we are going to use the bully pulpit of City Hall to persuade others to use this as well. 


Nicky Gavron AM:  That is very exciting.  Then you clearly see that London’s demand could stimulate factories outside London and help us progress this new industrial sector.  London could be leading that. 


Sadiq Khan (Mayor of London):  Absolutely.  It is a good example of an interventionist industrial strategy, helping a sector, and I have not seen any downsides.  Making the sector more attractive to a certain pool of workers, creating jobs, meeting the demand for more homes, helping employers outside of London, while being environmentally sustainable and value for money; the upsides are very persuasive. 


Nicky Gavron AM:  Can I just raise one more thing?  I agree that the Housing Strategy is very strong in terms of how offsite manufactured homes can address the skills challenge that the construction industry faces ‑ you have talked a lot about Brexit in that ‑ but without supply, skills will not really fly, and in order to get the supply, you need demand.  The industry has told me that they are poised to deliver but they need you to catalyse that change.  You have believers.  They are very interested in how you might help certainty of demand with your land.  You have been talking too about how you are going to land assembly.  Could you just say a little bit about how you can use your land assembly strategic partnership?


Sadiq Khan (Mayor of London):  Sure.  One of the representations made to me is, and I am paraphrasing, “Why would we invest in this sector when we are not sure of the demand going forward?  We need the certainty of demand to make sure we invest in this and skill up people”.  We want to provide that reassurance and there are a number of ways we are going to provide that reassurance.  The Innovation Fund shows there is money there to help.  The deal we have done with Pocket [Living] is an example of a supplier we know uses this fund. 


In relation to the assembly of land, sometimes that is used to give potential developers the certainty of knowing they can use the land but it has to be commercially viable in relation to the revolving fund.  The revolving fund works to make sure we can get the money back.  There are other pieces of land we have access to as well.  We are happy to talk to members in the sector, whether it is those who are the manufacturers or other builders, about how we can give them the reassurance they need, bearing in mind of course we have TfL land we are bringing forward.  We are hoping to do a deal with the Government around the London Estates Board on the NHS.  I am happy to talk with the sector through my Deputy Mayors, if not through me, about how we can give them the reassurance they need.  We want this sector to thrive and flourish.  We want this to be a centre of excellence going forward.