The Built Environment Committee has published a letter to the Government following its inquiry into the future of modern methods of construction (MMC) in housing.

The Government’s approach to MMC is in disarray. Millions of pounds of public money has been invested, but the money has not been backed by a coherent strategy and set of measurable objectives. Some Category 1 (modular) MMC firms have failed financially, though with the right approach it could still play an important role in the building of much-needed housing.

There is evidence of real barriers to MMC, such as risk aversion on the part of warranty providers, insurance companies and insufficient clarity for building regulations. However, the Government appears to have made limited effort to understand and address these challenges.

If the Government wants the sector to be a success, it needs to take a step back, acquire a better understanding of how it works and the help that it needs, set achievable goals and develop a coherent strategy.

These are some of the findings and recommendations published today by the House of Lords Built Environment Committee following its inquiry on the future of modern methods of construction. The inquiry was established following the collapse and closure of several Category 1 MMC companies during 2022 and 2023.

Lord Moylan, Chair of the Built Environment Committee, said: “Moderns methods of construction are successfully used to construct homes abroad and build high-rise and non-residential buildings in the UK, but this success has thus far eluded the building of MMC homes in meaningful numbers.

“In the context of an ageing skilled workforce and the need for greater building sustainability, MMC has shown some promise. We heard evidence that the Government couldn’t achieve its housebuilding targets without a sizeable contribution from the MMC sector.

“Our inquiry found that the Government has not set out clear objectives for the funding it provided the MMC sector. Homes England has not given any clear metrics as to how success is to be measured and over what timescale.

“The Government needs to change tack. Simply throwing money at the sector hasn’t worked. If it wants to encourage MMC it must acquire a much deeper understanding of how it works, develop a clear strategy, and demonstrate leadership.”

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