The government will favour offsite manufacturing on all publicly funded construction projects from 2019.
As part of the Budget, the Treasury said the government would use its purchasing power to drive modern methods of construction across capital projects in areas such as education, transport, defence and health.
The industry has broadly welcomed the news. Cast Consultancy CEO Mark Farmer took to Twitter to laud the decision as “extremely significant”, adding that it showed the government had “listened to the call for leadership of the construction modernisation challenge.”
The document said: “Building on progress made to date, the Department for Transport, the Department of Health, the Department for Education, the Ministry of Justice and the Ministry of Defence will adopt a presumption in favour of offsite construction by 2019 across suitable capital programmes, where it represents best value for money.”
The Budget documents also revealed that the government will hand construction £170m as part of a “sector deal” to fund innovation and research and development to boost productivity in the sector.
Further details of the components of construction’s sector deal will be unveiled as part of the Department for Business, Energy and Industrial strategy’s white paper, which is due out on Monday.
Construction News understands that the £170m will be supplemented by a mechanism that will see construction firms match fund the money put in by government.
Firms will then put forward business cases to access funding for certain R&D projects.
In September, the Construction Leadership Council chairman Andrew Wolstenholme said construction had about a 50:50 chance of landing a sector deal.
The sector deal is aimed at tackling low productivity levels. Research carried out by McKinsey found that productivity in the construction sector was far lower than the UK average and costing the sector more than £15bn a year.
Other areas that are expected to benefit from the sector deals will be the creative and digital industries and those involving artificial intelligence and machine-learning targeted at the services sector.