examining the impact of government spending on social housing construction

Impact of Government Spending on Social Housing Construction

Quantity Surveying, ESBE of 96

London South Bank University

Faculty of Engineering, Science and Built Environment

Department of Built Environment

Examining the Impact of Government Spending on Social Housing Construction in London

2012

Jorg Holter

MSc Quantity Surveying



Examining the Impact of Government Spending on Social Housing Construction in London

Submitted by Jorg Holter

For the MSc Quantity Surveying

Unit Co-ordinator: Shamil Naoum

London July, 2012



Declaration This dissertation may be made available for consultation within South Bank University and may be photocopied or lent to other libraries for the purposes of the consultation. Jorg Holter July 2012 I declare that this dissertation is my own unaided work except where specifically referenced to the work of others. Jorg Holter July 2012



Acknowledgements

I would like to express my special thanks to everyone who has supported me in the

completion of this study. Special thanks also to my project supervisor Professor Dr.

Herbert Robinson, Dr. Mahtab Farshchi and Korinne Louison who have been very

supportive throughout my course and this dissertation.

My sincere thanks to the BCIS especially Joe Martin, Andrew Thompson, Alan Carter,

Cosmas Kamasho and Lindsay Pullen for all the support through the duration of this

course as well as the anonymous professionals, who shared their expertise in the

interviews and have been so kind with their time and knowledge.

Dedicated to my mother Katharina Hölter and in loving memory to my dad, Franz-Josef

Hölter.

July 2012



Abstract

The recent economic crisis has placed added pressure on an already struggling

social housing sector. While housing supply has been falling, demand has been

increasing throughout the UK and specifically in London where the number of

households continues to grow. While seeking to meet targets, the coalition government

has made significant policy changes to prevent waste and reduce bureaucracy in the

social housing sector.

This thesis used a mixed method approach (including literature review,

interviews, and statistical analyses) to examine how changes in government policy have

affected social housing delivery. The thesis investigated the delivery structure,

spending, efficiency, costs, and the construction programme. Also the thesis looked at

the extent to which alternative methods of construction are used in the social housing

industry and how it compares to traditional methods in terms of cost, quality of design,

and efficiency.

Overall the content analysis of themes revealed little impact of the new delivery

structure on efficiency. Some positives about reduced government spending regarded

the emergence of the LAs as a prominent agency in social housing delivery. Among the

negatives were increased uncertainty and decreased risk taking. Some of the new

government measures were argued to carry up the cost of social housing. The biggest

point of worry is the overall impact of the governmental austerity measures of reducing

the number of housing schemes by at least a half. Results of the study did not support

arguments in favour of the use of MMC to improve design quality, costs or efficiency in

these times. Recommendations and limitations of the study were also discussed.



TABLE OF CONTENTS PAGE Title Page 2 Declaration 3 Acknowledgements 4 Abstract 5 Chapter 1: Context and Rationale 1.1 Introduction 12 1.2 Key Issues 13 1.2.1 The Delivery Chain 14 1.2.2 Funding 15 1.2.3 Housing Design 15 1.2.4 Modern Method of Construction (MMC) 16 1.3 Aim and Objectives – Research Questions 17 1.4 Structure of the thesis 17 Chapter 2: Literature Review 2.1 Introduction 20 2.2 Definition of Social Housing 20 2.3 Government Housing Policy and Social Housing 1945 – 2008 20 2.4 Recent Issues in UK Social Housing 2008 – present 26 2.4.1 Physical condition of existing stock and Housing Gap 26 2.5 Social Housing Delivery Structure 27 2.5.1 Present Housing Delivery Structure 29 2.6 Government Spending to present 30 2.7 Concluding Remarks 32 Chapter 3: Design Standards and Cost of Social Housing 3.1 Introduction 34 3.2 Space, Dwelling Types and Design Standards over the years 35 3.2.1 Code for Sustainable Homes 39 3.2.2 External Environment 40 3.3 Affordable Housing Trends in London 41 3.3.1 Dwelling Mix 41 3.3.2 Density 41 3.3.3 Brownfield vs. Greenbelt 43 3.4 Costs of Schemes 45 3.5 Impact of Modern Method of Construction (MMC) 47 3.5.1 Volumetric Construction 48 3.5.2 Panellized Construction 48 3.5.3 Off Site Manufactured 49 3.6 Design Quality and Costs 49 3.6 Concluding Remarks 49



Chapter 4: Methodology (Findings from the Case Study Interviews) PAGE 4.1 Introduction 51 4.2 Research Design and Approach 51 4.3 Research Method chosen 52 4.3.1 Literature Review 52 4.3.2 Case Study Interview 53 4.3.3 Structured Interview 53 4.3.4 Semi-Structured Interview 53 4.3.5 Unstructured Interview 53 4.4 Respondents 53 4.4.1 Housing Association 54 4.4.2 Developer 55 4.4.3 Quantity Surveyor 55 4.5 Data Analysis 56 Chapter 5: Findings from Case Study Interviews 5.1 Introduction 58 5.2 Housing Association 58 5.2.1 Delivery Structure 59 5.2.2 Government Spending and Cost 60 5.2.3 Design and Cost 61 5.2.4 Modern Method of Construction 62 5.3 Developer 63 5.3.1 Delivery Structure 63 5.3.2 Government Spending and Cost 64 5.3.3 Design and Cost 65 5.3.4 Modern Method of Construction 66 5.4 Quantity Surveyor 67 5.4.1 Delivery Structure 67 5.4.2 Government Spending and Cost 67 5.4.3 Design and Cost 67 5.4.4 Modern Method of Construction 68 Chapter 6: Analysis and Discussion 6.1 Introduction 69 6.2 Deliver Structure 69 6.3 Government Spending 74 6.4 Factors influencing costs 74 6.5 The Project Duration 75 6.6 Modern Method of Construction (MMC) 76 6.7 Concluding Remarks 77 Chapter 7: Conclusion 7.1 Introduction 78 7.2 Key Findings 78 7.2.1 Objective 78 7.2.2 Objective 79 7.2.3 Objective 79 7.3 Conclusions 80



Chapter 7: Conclusion (continued) Page 7.4 Industry Recommendations 80 7.5 Limitations of the Research 81 7.6 Further Study Recommendations 81

REFERENCES AND BIBLIOGRAPHY 82 APPENDICES 96



LIST OF TABLES PAGE Table 1: Household Projections. 22

Source: Department for Communities and Local Government, 2010.

Table 2: Comparison of GIA and its changes since 1949. 37

Source: CABE, 2010a. Mapping space standards for the home.

Table 3: Dwelling Space Standards. 39

Source: London Development Agency, 2011. Design for London.

Table:4: Baseline Construction Cost. 45

Source: CLA; 2010.

Table 5: Summary of extra-over costs of building to each level of the Code 46

in each of the dwelling types and for a range of development scenarios.

Source: CLA, 2010.

LIST OF FIGURES

Figure 1: Right to Buy and Preserved Right to Buy sales 1980/81 to 2010/11 24

Source: CLG, Reinvigorating Right to Buy and One for One.

Replacement Impact Assessment, 2012.

Figure 2: Number of Social Housing Dwellings in the UK 1981 – 2007 25

Source: Beever and Struthers, 2011. Annual Review of Social

Housing.

Figure 3: Flow of funding for affordable housing. 28

Source: National Audit Office, 2005a.

Figure 4: Housing completions in 2010; lowest peacetime level since 1923. 30

Source: Hill, R., Comes and Community Agencies, 2011.

Figure 5: The ‘deepest’ recession since the Second World War. 31

Source: Allen, G., Recesssion and Revovery, 2010.

Figure.6: Household Size Projections. 34

Source: GLA (2006) Household Size 1991 – 2026.

Figure 7: Growth in Population. 42

Source: The Mayor’s London Plan, 2011a.

Figure 8: Brownfield land developed for residential use by region. 43

Source: Wong and Schulze Bäing, 2010.

Figure 9: London Plan key diagram. 44

Source: The Mayor’s London Plan, 2011b.



LIST OF FIGURES (continued)

Figure 10: Delivery Chain Social Housing, 2012. 70

Source: Trower and Hamlins, 2009.

Figure 11: BIS/TPISH Tender Price Index of Social Housebuilding; New Build. 72

Source: BCIS online; Average Prices; 2012.

Figure 12: Average Construction Duration in weeks. 73

Source: BCIS Online, Duration calculator, 2012.



“Examining the Impact of Government Spending on Social Housing Construction”



Chapter 1 – Context and Rationale

1.1 Introduction

This thesis aims to explore the impact of government spending on the housing

delivery chain and the social housing construction industry. The topic is examined

under the backdrop of the 2008/2009 recession which was caused by the credit crunch.

Falling house prices and a collapse of confidence in the finance sector resulted in lower

confidence among the ‘real’ economy.

In 2010, David Cameron, leader of the newly elected coalition government of the

UK, along with his deputy, Nick Clegg, revised the 2010/2011 budget of the previous

government. This ‘emergency budget’ outlined how the new coalition planned to raise

and spend money over the coming years. Listed among its most important aims were

the prevention of waste and the reduction of bureaucracy in order to save money.

Shortly after the announcement of the emergency budget, numerous articles

were published that predicted dire circumstances for the social housing industry. The

article “Housebuilders to be hit by affordable housing slump” in the journal

Building.co.uk (2010) predicted that government spending cuts would result in a decline

of 65% in the number of social homes built - the lowest annual total since 1991 .

The realities of the current economic crisis – company closures, unemployment

and higher prices particularly in the housing sector have resulted in an increased

demand for affordable housing. In the first quarter 2012 an estimated 1.8 million

households were on the waiting list for social housing (Barclays, 2012). According to

the statistics from the Department for Communities and Local Government (CLG) report

“Housing Statistical Release” (2009a) household projections are estimated to reach an

extra 35.000 households per year between 2006 and 2026. Others project an annual

increase of 223,000 households by 2026 (Holmans and Whitehead, 2011) increasing

demand even further. It is therefore important to explore the impact of the recent

government austerity measures on the provision of much needed social housing.

The truth is that the current government is facing a housing supply crisis.

Indeed, Bramley (2007) predicted that housing supply will become one of the key

challenges in the future even though policies and procedures were in place. Bramley



argued that the current land use planning system could be one reason for the

problem of inadequate and unresponsive housing supply in the UK.

The Barker Review (2004) studied problems associated with housing supply.

The conclusion was that the rise in housing prices was directly related to a

supply/demand imbalance, resulting from a rise in households, particularly the number

of one person households. Moreover, the review reported a drop in new build social

homes from 42,700 per year in 1994-95 to about 21,000 in 2002-03. According to

Barclays (2012), between October 2010 and March 2011, the number of social housing

starts was 35,735 – an improvement over the 2002-2003 period; however there was a

sharp decline to 454 in the following six months (Barclays, 2012). In 2007 the

government set the target of 3 million new build houses by 2020 (Shelter, 2007). In light

of this erratic and generally declining pace of construction in the sector, the

government’s vision will not likely be met (2020 Group, 2009).

The continuing shortage of affordable private and social housing resulted from

years of scarcity, low investment and the reduction in housing stock through the “Right

to Buy” option (Niemitz, 2012). The consequences of this situation are economically

devastating. In addition to the financial pressure resulting from high housing costs,

there will be serious constraints on labour mobility, especially if households cannot

secure housing where there are employment opportunities. It is important that housing

levels continue to rise or we are likely to see increasing levels of homelessness in the

coming years.

1.2 Key Issues

To understand the impact of current government spending on social housing

construction, this thesis examined key issues such as the nature of the housing delivery

chain, availability of funding and its affect on the delivery structure, type of housing that

can be built under the current economic climate in terms of land use, number and sizes

of units, unit cost and the impact of modern method of construction (MMC) on social

housing production.



1.2.1 The Delivery Chain

In the UK market, when compared to other countries, housing can be very

expensive and out of the reach of many. Barclays (2012) asserted that the demand for

social housing is increasing as a result of a lack of newly built homes and a shortage of

affordable homes. Where budget cuts have been made, the government faces the huge

challenge of meeting the increasing demand for social housing with less available

financial resources.

This has resulted in key changes in the funding, administration and structuring

of social housing (Barclays, 2012) with a specific focus on the complex delivery chain

that guides the flow of funding towards new housing. Traditionally, the delivery chain

has started with the Office the Deputy Prime Minister (ODPM; now called Communities

and Local Government), which directs funding to Housing Corporations (HC) and then

to Housing Associations (HA) and other bodies that apply for grant and subsidies in

order to provide new housing. This funding procedure is thoroughly described in the

National Audit Office (NAO) (2005a) report: “Building more affordable homes: Improving

the delivery of affordable housing in areas of high demand”.

Lamentably, the effectiveness of the housing delivery chain has been limited by

problems related to inefficiencies and bureaucracy because of the number of agencies

that usually have been involved. By making key changes to the delivery chain, such as

reducing the number of participating agencies and giving more financial responsibility to

Housing Associations (i.e. shifting from grant funding to revenue funding), the

government has attempted to increase efficiency and reduce costs (Parker R.,

PricewaterhouseCoopers, 2008).

This thesis will explore the recent changes that have been made to the delivery

chain and the extent to which these changes have met the objectives of the current

social housing policy.



1.2.2 Funding

Is there a need to change or to identify new forms of funding strategy in

affordable housing? The government has given the new national Homes and

Communities Agency (HCA) a leading role in social housing delivery. In terms of

funding, the HCA’s budget for the affordable homes programme has been reduced

substantially, from £8.4 billion in the 2008-2011 period to £4.68 billion in the 2011 –

2015 period (Jones Lang Lasalle, 2011b). Still the HCA anticipates that the revised

budget can still provide 170,000 new homes (Jones Lang Lasalle, 2011b). To

supplement governmental based funding, there has also been a drive to switch from

capital based to revenue based funding and move to a smaller number of larger

registered providers or RPs (Barclay’s, 2012, Jones Lang Lasalle, 2011b).

1.2.3 Housing Design

Over the years, government spending cuts have impacted housing design in

many ways such as in the size, design and quality of dwellings. Several views have

been offered relating to housing design, but the consensus seems to be that housing

quality has been neglected over the past 50 years.

During the post- 2nd World War ‘Homes for Heroes’ initiative, the highest

standards in housing were achieved. The 1944 ‘Housing Manual’ set out strict housing

and estate design guidelines in terms of site layout, density, and dwelling type. Focus

was also given to gross internal area space standards which increased from 800 – 900

sq. ft. in 1944 to 900 – 950 sq. ft. in 1949 (GLA, 2006).

In the 1960s the Parker Morris Committee report ‘Homes for Today and

Tomorrrow’ prescribed standards that are considered adequate in today’s housing

design (GLA, 2006). The report argued for improved space standards and adjustments

to the internal organization of the home based on how residents actually made use of

their homes. Unfortunately the Parker Morris space standards, in the absence of good

site planning and good quality construction, were not sufficient to ensure better quality

of design.

In the 1980s, the Parker Morris standards were neglected due to cuts in funding.

As housing grants decreased, design quality deteriorated even further. In the 1990s the



drop in Housing Association quality standards were highlighted in certain reports

as being 5% below Parker Morris standards (Mathieson, 2010).

Later on, a consideration of issues related to persons with disabilities, social and

public health and the environment would revive the drive towards better quality homes;

but in light of the recession and the pressure on the government to reduce spending in

this area, would design standards once again be sacrificed?

1.2.4 Modern Method of Construction (MMC)

In an attempt to increase the supply of housing, MMC was put forward as a

possible solution. The housing supply/production literature also recognises the

importance of MMC. A report by the National Audit Office (NAO, 2005b) describes

MMC, which involves the making of panels and/or modules in specialized factories,

which are then assembled at the construction site as an innovative, efficient and cost

effective approach. However MMC faces scepticism related to a less than auspicious

history, higher immediate capital costs before start on site and economies of scale

(POST, 2003), general concerns about prefabrication and standardisation in housing

(Edge et al, 2002) and lack of flexibility of design changes during the production stage

(Pan, W. et al, 2005).

The NAO report also suggests that for MMC to meet government targets there

must be very stringent accreditation criteria to ensure the durability of such housing as

well as improved staff training to ensure high quality in construction. Kempton (2009)

discusses that the goal for social housing is 3 million new homes by 2020 and one of

the expectations is that the application of MMC will make this goal attainable. Kempton

(2009) however suggests that there are problems with this idea. One of them refers to

the complications associated with using innovative and non traditional “housing

formats’, such as suspicion on the demand side and a lack of capacity on the supply

side.

This thesis explores the benefits and limitations of using MMC as a cost

effective innovation to increase housing supply in this time of economic decline.



1.3 Aim and Objectives – Research Questions

This thesis is concerned with issues in social housing that are related to the

government’s attempts to secure the economy, particularly the impact it will have on

housing supply as well as the delivery structure of social housing. Specifically, the

research focuses on the following questions:

1) How has the structure for the delivery of social housing changed?

2) Have there been adjustments in the number of the participant agencies and their

roles?

3) Have the changes in the delivery structure achieved its intended goals of

increasing efficiency and reducing costs?

4) How does the government’s new policy affect spending in social housing

construction?

5) What are the key factors that influenced costs in social housing?

6) How does reduced governmental spending affect the construction programme

(project portfolio) of RPs in terms of number, types and sizes of schemes,

available land whether brownfield / greenbelt, mix between rehabilitation and

new development and density (high or low)?

7) What is the level of use of MMC and what has been its impact in social housing

construction?

1.4 Structure of the thesis

This thesis will explore the impact of government spending on social housing

construction in seven chapters.

Chapter 1 presents the rationale of the research and states the aims and

objectives of the study, along with the research strategy that was employed to answer

the research questions.

Chapter 2 is a literature review which gives a brief history of social housing in

the UK from the post 2nd World War period to present. It explores how the devastation

of the 2nd World War, returning forces, increased migration into the UK, and later,

increase in the number of households impacted the demand for social housing. It also

describes how changes in government policy and economic fortunes affected the



availability and supply of affordable housing. The chapter will investigate the

housing delivery structure as it existed previously and also in its current form as well as

describe how the economic crisis has affected government spending on social housing.

The chapter ends with a brief discussion of the current state of affairs in the UK and

makes projections for the following 15 year period based on the literature.

Chapter 3 explores how the types, standards and costs of social housing have

changed over the years. Particular emphasis will be placed on the extent to which the

current spending changes highlighted in the government policy document have or can

impact these factors. The chapter discusses specific areas of design and quality

standards such as size, space and adherence to sustainable codes and also available

land for development, density and modern method of construction. The chapter will also

demonstrate the trends of cost per m² of traditional and modern method schemes of

affordable housing in the recent years.

Chapter 4 is the research methodology and will describe the data collection

approach of this study. The study used a largely qualitative approach, which sourced

both primary and secondary data to answer the questions of this study. This data was

obtained from governmental policy documents, published statistical data, journal

articles and structured interviews with persons within Housing Associations, Developer

and Quantity Surveyor firms.

Sixteen firms were approached to participate in the study. Of those approached,

8 responded and 6 of the response transcripts were chosen for analysis. Quantitative

data was also accessed from the Building Cost Information Service (BCIS) online

service which provides up to date cost sector information. The goal of the interviews,

review of documents and analysis of quantitative data was to determine the impact of

government policy on the delivery structure, cost of different methods of social housing

construction and efficiency of delivery of social housing.

Chapter 5 represents the findings from the case study interviews. The selected

interviews were organized according to one of the following groupings: Housing

Association, Developer and Quantity Surveyor. Within each grouping, the interview

responses were collated and summarized, with each interview question as a separate

heading.



Chapter 6 provides the analysis and discussion of the findings. The primary

data analysis that was used for this study was content analysis. The process of content

analysis involved the synthesis of data to identify themes related to the research

questions that are the subject of this thesis. Once the themes were identified, they were

used to answer the research questions in order to meet the aims and objectives of this

study. The findings of the interviews were compared to the results of the literature

review and quantitative data analysis.

Chapter 7 summarizes the findings of the research relative to its initial aims and

objectives. It presents recommendations based on the data and industry opinions as

well as suggestions for future studies. Limitations are also discussed.



Chapter 2 – Literature Review

2.1 Introduction

Over the years, demand and supply in UK social housing has been impacted by

social, political and economic factors. Increased demand is attributed to sharp post war

population growth, changes in household structure (Fitzpatrick and Stephens, 2008),

lowered household income and higher prices in the private housing sector which has

resulted from increased challenges to the UK economy. On the supply side, changes in

government have been accompanied by changes in policy which are influenced both by

political ideology as well as economic realities. The following sections will explore in

detail, post 2nd World War, the impact of these factors on the demand for and the

provision of affordable housing in the UK.

2.2 Definition of Social Housing

‘Social housing is housing that is let at low rents and on a secure basis to people in

housing need. It is generally provided by councils and not-for-profit organisations such

as housing associations’ (Shelter, 2011a). Social housing includes social rented

housing that is provided to households who are unable to fund housing within the

private sector (CLG, 2006a). Social housing and affordable housing has been used in

the literature to mean the same thing. The two terms will be used interchangeably in

this thesis.

2.3 Government Housing Policy and Social Housing 1945 - 2007

Prior to the end of the Second World War, with a large number of its citizens

engaged in military service, Britain was suffering from a shortage of resources including

labour and construction materials (Taylor, 2009). As a result there was little or no

con8struction of houses during that time. The ravages of the war had also taken its toll

on the British infrastructure and so the lack of production and destruction of buildings

resulted in a severe housing shortage. In addition to the housing shortage, the UK

experienced a period of sharp population growth after the war that increased the

demand for social housing.



With the return of the troops and other army personnel after the Second World War,

the Labour government saw that there was an urgent need for housing and so

reimplemented its post war 1929 social housing programme called ‘Home for Heroes’.

Moreover, by 1946, the population of post war Britain had increased by over one million

and local authorities had taken on a leading role in the provision of council housing,

meeting the needs of 10% of all households (Glendenning and Muthesias, 1994).

The labour shortage by this time had also stimulated a period of migration into the

UK. In 1949, the Royal Commission on Population began a massive campaign

designed to attract immigrants of ‘good stock’ to work on rebuilding Britain, and soon

thereafter, Britain witnessed an influx of migrants largely from Eastern Europe, Ireland,

and Italy. Recruitment of labour was later extended to India, Pakistan, Africa and the

Caribbean, which resulted in substantial migration from those parts of the world

between the 1950s and 1960s (Brown, 1995).

Stringent immigration laws implemented in the 1970s by the British government

resulted in a slowing down of migration into Britain in that decade, (Bam-Hutchison,

n.d). Contrary to the general opinion, of all the social factors, migration had placed the

lowest demand on social housing as reports show that even the majority of post war

immigrants found rental housing on urban estates and largely from private landlords

(Ponzo, 2010).

By the mid-1950s, the government had embarked on a program of slum clearance

which involved the relocation of lower-income inner city populations (Malpass and

Murie, 1999). This program continued into the 60s and 70s and was accompanied by

an expansion of new social housing, which lamentably was of poor design and

construction. It was around this time that public funds were channelled to housing

associations. Malpass and Murie (1999) remarked that this new approach established a

‘modern framework for their operation’ as well as a ‘basis for later growth’.

At this time the focus was on housing those who could least afford to purchase or

rent market housing. Between 1955 and 1970, 400,000 new Local Authority flats were

built in urban areas (Shapely, 2008). The population of the urban estates mostly

consisted of poor immigrant communities. By 1965, there were a total of almost 4

million social housing units, 2.9 million of which had been built after the 2nd World War

(Greenhalgh and Moss, 2009). Unfortunately the demand for new housing exceeded



the government’s capacity to build. This was perhaps due to the continued

reduction in private renting, particularly after the introduction of much stricter rent

controls in the Labour Government’s 1965 Rent Act (Greenhalgh and Moss, 2009).

By the late 1970s to 1980s, population growth resulting from repatriation of military

forces and migration to the UK had slowed and became less of an influence on

government policy. It must be said that in recent times, Britain has seen a resurgence of

immigration particularly from members of the European Union, but the truth is that

today, migration into the UK cannot be pointed to as the largest contributor to

increasing demand for social housing. Indeed, immigrants currently make up

approximately 1% of applicants for social housing (Rutter and Latorre, 2009)

Distinct from population growth, household growth has increased the demand for

social housing in the UK. After the Second World War, there was a sharp increase in

new households, arising from younger marriages and increased family dissolution.

Such changes have led to a shortfall of two million dwellings (BMA, 2003).

Since then the trend of household growth has continued to increase sharply due to

further changes in household structure (aging population and the increase in the

number of single parent households or single person households). Expectations are

that by 2033, the number of households will increase at an annual rate of 232,000

(CLG, 2010). Table 1 shows household growth projections for the period 2008 to 2033.

This has put further pressure on the government to provide new homes.

Table 1: Household Projections.

Source: Department for Communities and Local Government, 2009b.



In the 1970s, a notable change was the growth of housing associations. With house

supply slumped to its lowest since 1950, the government recognized that local

authorities were not capable of coping with the current demand. New legislation had

opened the way for housing associations to secure capital grants to fund provision of

rental housing in the UK. A new subsidy system, “The Housing Action Grant” (HAG)

was announced in the Housing Act 1974. By 1979, social housing increased from 12%

of total housing stock in 1945 to 32% (Malpass and Murie, 1999).

In spite of the substantial growth of the housing association, at the end of the 1970s

it accounted for only a small share of the total number of social homes. However, since

then, their role has increased rapidly and substantially as well as their expertise, and as

such, by the 1980s the housing associations were taking on more responsibility for

large local estates. This reflected a change in government policy as is evidenced by the

‘innovative’ 1980 Housing Act, which authorized housing associations to offer shared

ownership deals (Council of Mortgage Lenders; Homes and Communities Agency;

National Housing Federation, 2011).

Another ‘innovative policy of the 1980s and 1990s was the ‘Right to Buy’ program.

Established by the Margaret Thatcher ‘right wing’ conservative government, this new

strategy resulted in an increase in owner-occupied housing from 56 percent in 1981 to

67 percent in 1996 (Malpass and Murie, 1999). The outcome was that by 2001, 1.9

million units, three tenths of local authority housing, were lost to Right to Buy (Malpass

and Murie, 1999). Furthermore, three-quarters of the income generated from the sale

of council housing to residents was allocated towards repayment of debt on council

housing (Durden, 2001), thereby leaving limited funds for replacement housing. Any

remaining funds were used to maintain the existing stock rather than invested in new

developments (Forrest and Murie, 1988).

The CLG (2011d) document, Reinvigorating Right to Buy and One for One

Replacement described the ‘Right to Buy’ programme as a ‘great success’ in many

suburban areas and smaller towns where resident ownership of homes converted entire

council estates to part of the regular housing stock. Unfortunately the same was not

true for the urban, flatted developments, where original owners have leased their

property to local councils, Housing Associations and Housing Benefit applicants that

now have to deal with huge bills to repair buildings that have exceeded their life cycle

(Greenhalgh and Moss, 2009). Figure 1 presents a summary of the number of



affordable homes that were sold within the ‘Right to Buy’ initiative during the period

1980 to 2011.

Figure 1: Right to Buy and Preserved Right to Buy sales 1980/81 to 2010/11

Source: CLG, Reinvigorating Right to Buy and One for One Replacement Impact Assessment, 2012,

For many reasons, it can be argued that the ‘Right to Buy’ programme was a

mistake, particularly as it severely depleted the already meagre housing stock and

placed a heavier burden on the government to provide newly constructed social

housing. Subsidies that would have otherwise been given to housing associations for

construction of new homes had been transferred to support households through

housing benefits. What resulted was a decrease in new social homes from an average

of 100,000 per year in the 1970s and 30,000 per year in the mid-1980s to an

astounding zero by 1993 when the conservative government of John Major was elected

to office. (Golland,1998; Balchin, 1996). It may have been more prudent to reduce rent

on properties in a savings plan that would allow tenants to eventually purchase private

housing, therefore freeing up the existing stock for new tenants.

In 1990, the John Major conservative led government met the largest housing slump

since the 1950s in addition to a major recession. The then government was faced with

balancing the Thatcher ‘Right to Buy’ policies with policies to promote modernization in

the sector (Fée, 2009), thus paving the way for the centrist government of Tony Blair,

whose policy on social housing was continue to promote home ownership, but also to



improve the quality of the current stock through the urban regeneration program

(Fée, 2009). When Gordon Brown entered office in June 2007, his intentions were to

stimulate new affordable house building by pledging £2.1 billion towards the

construction of 20,000 new homes (Story, 2009).

David Cameron replaced Gordon Brown in May 2010, at a time when the UK was

suffering the effects of the global recession and it was clear that government spending

must be curtailed to avoid a collapse of the UK economy. Cameron’s housing policy of

necessity focused on increasing efficiency and supply while cutting costs and will be

discussed later in this chapter.

As of today, it can be argued that the changes in governments saw policies that

resulted in a reduction in affordable housing. Figure 2 shows a falling trend of built

affordable housing stock from 6.6 million dwellings in 1981 falling to 4.8 million at end

2007. The graph is meant to demonstrate the extent to which social housing declined

since the ‘Right to Buy’ policy was introduced. In light of these facts, it is not surprising

that a large portion of the rental housing owned by the local authorities is in an

unsatisfactory condition due to age, poor design and construction (Stone, 2003).

Figure 2: Number of Social Housing Dwellings in the UK 1981 - 2007

Source: Beever and Struthers, 2011; Annual Review of Social Housing.



2.4 Recent issues in UK Social Housing – 2008 to present.

A major event occurred in 2008 which placed a heavier burden on the UK economy.

The US credit crunch of 2008, followed by the recent Eurozone crisis has resulted in a

struggling UK economy with GDP contraction in the 4th quarter of 2011 and the first

quarter of 2012 (Barclays, 2012). The bottom line has been continued company

closure, further job cuts and depressed household incomes which have increased the

waiting list for social housing. The literature points to growing challenges for the

government as it tries to provide affordable housing for its residents. These challenges

can be summarized under the following headings:

Physical Condition of existing stock and the Housing Gap

Housing Delivery Chain

Government Funding and

Innovation.

2.4.1 Physical condition of existing stock and Housing Gap

The late 1980s to 1990s witnessed the government introduced ‘regeneration

programmes’ to improve the physical condition of council housing (Malpass and Murie,

1999). The renovation initiative has persisted today in the form of combined renovation

and demolition/replacement activities. While there is a concern about the maintenance

of existing stock, there is an additional focus on the quality and sustainability of new

built housing. It has been argued that housing association units are being designed and

built with 25 year life cycle to keep costs down during this period (Stone, 2003)

These programmes have been progressing slowly. In 2000, the backlog of repairs

and improvements amounted to £ 19billion (CLG, 2000) In 2011, 23,000 new homes

would have to be constructed to remove the backlog. This would likely incur costs of up

to £1.6 billion (Barker, 2004).

The Barker Review (2004) reported the number of 42,700 social houses built in the

UK in 1994-95 falling to approximately 21,000 in 2002-03. Along with the decline in

production was an increase in expenditure of £600 million over the period 2001-02 to

2003-04. The surprising decline in production in spite of increased funding was

attributed to rising land prices and the rehabilitation program.



2.5 Social Housing Delivery Structure

Currently, the situation in the housing market is a challenging one. The UK

government was forced to revise the housing delivery structure to make it more

compatible with the current economic conditions, and to meet the increasing demands

for housing.

This increasing demand for housing was a concern for the government which had

established a target of 240,000 additional homes by 2016 (CLA, 2007). Unfortunately

the financial crisis in 2008 placed a formidable obstacle in the way of the government’s

housing supply agenda. The mortgage market almost collapsed and in response to it

the banks tightened up the lending criteria (FSA, 2011) that made home ownership

almost unattainable for many. As houses became unaffordable, the social housing

supply decreased further. The National Housing and Planning Advice Unit (NHPAU),

which was created after the Barker’s Review 2004, advised that the recession had

increased demand for social housing up to 290,500 new homes per year until 2031 to

meet its demand (NHPAU, 2009).

This worrying situation prompted the Office of the Deputy Prime Minister (ODPM) to

set the following Public Service Agreement target:

“Achieve a better balance between housing availability and the demand for

housing, including improving affordability, in all English regions while protecting

valuable countryside around our towns, cities and in the green belt and the

sustainability of towns and cities” (NAO, 2005a).

To achieve its target, the 2004 government had developed a complicated

delivery chain to manage the flow of funding for social housing. Figure 3 demonstrates

how the funding emanated from the ODPM, and was directed to the Government

Offices for the Regions, then to the Regional Housing Boards and Regional Planning

Bodies, followed by the local authorities, housing associations, and property developers

respectively (NAO, 2005a).



Figure 3: Flow of funding for affordable housing.

Source: National Audit Office, 2005

In Figure 3, the diagram of the original housing delivery chain features the ODPM,

the Housing Corporations (National and Regional), the Developers and the Housing

Associations as the central bodies in the delivery structure. Additional agencies such as

the Regional Government Offices, Regional Housing Boards and Planning Bodies and

Local Authorities, can be said to form extensions from the main chain (NAO, 2005a).

In an attempt to improve efficiency, the present government has made revisions to

the housing delivery structure. The following section will explore the evolution of the

delivery chain in recent years with a particular focus on the current structure. The

section will discuss what the literature reports to be the potential benefits and limitations

of the chain in its current form as the government attempts to meet its objective of

speeding up the delivery of housing and reducing the costs involved.

In 2005, a joint study by the Audit Commission and National Audit Office

investigated ways by which the availability of affordable housing in high demand areas

could be increased. The report concluded that there needed to be more efficiency on

the national, regional and local levels, in order to reduce the time of delivery and cost of

housing units (NAO, 2005a). The study proposed strategies including removal of

blockages, simplification of processes and clarification of roles of participating bodies

within the chain to speed up delivery of social housing. Also, to reduce costs, the study

suggested rationalising the delivery chain by removing duplications and sharing

services (NAO, 2005a).



In its traditional form, the ODPM provides funding to the Housing Corporations

which then award grants and subsidies to the Housing Associations and Developers for

the provision of new housing. But in the traditional chain of delivery, the flow of funding

goes through a convoluted channel through other bodies. For example the Government

Offices were charged with the responsibility of linking with and ensuring that the other

organizations were aware of national policy. The Regional Housing Boards liaised with

the Regional Planning Boards to set priorities for housing and to advise the government

where funding should be channelled. The role of Local Authorities was to approve the

schemes for new housing developments and prepare needs assessments and

development frameworks. The Regional Assemblies were responsible for the Regional

Spatial Strategies (RSS), (NAO, 2005a)

Few can argue that the complexity of this structure resulted in the waste of finance

and other resources and had also increased ambiguity at regional and local levels

about roles and relationships. In order to achieve efficiency, major changes had to be

made. In 2010, an important change in policy was introduced, which allocated more

decision making power to regional bodies, thereby removing the Local Authority Social

Housing Grant and changing the planning system. Moreover, the criteria for funding

Housing Associations were revisited and the funding cycle was adjusted from one to

two years (NAO, 2005a).

According to the report by the Comptroller and Auditor General (NAO, 2005a), the

changes had a positive impact by giving ‘more certainty to housing associations’ as well

as ‘encouraging developers to plan better and to invest in capacity for the future’. The

report stated that the new initiatives reduced complexity in funding by being more

selective in the awarding of grants, thereby reducing spending by 9%.

2.5.1 Present Housing Delivery Structure

As recently as November 2011, the Localism Act, in which changes to the housing

delivery structure were announced, was proclaimed in parliament. The highlight was the

transferring of decision making power for planning and housing away from the ODPM to

the councils and neighbourhoods. Other changes included the removal of the

requirement for councils to have a Home Information Pack (HIP), reform of the Housing



Revenue Account System (HRAS), and abolishment of the Tenant Services

Authority (TSA). The TSA was replaced by the Home and Community Agency (HCA). In

London in particular, the responsibilities of the HCA in housing investment were

transferred to the Greater London Authority (GLA) (HCA, 2012a). Furthermore, with

regard to planning the following changes were also made: abolishment of the Regional

Assemblies; greater new housing and regeneration powers to the GLA and abolishment

of the London Development Agency (LDA). Greater powers are now afforded to locally

elected representatives such as the Mayor of London, who can carry on investment and

economic development activities that were previously the responsibility of the HCA and

LDA.

2.6 Government Spending 2009 to present

The financial crisis of 2008 had a major impact on housing supply. Successive

governments have tried to stimulate house construction with additional, short-term

spending as well as with programmes to improve efficiency within the sector over the

long term. In 2007 planned housing supply was to meet a goal of 240,000 new homes

every year by 2016 to match annual population growth. Hill (2001) reported that

118,000 homes were completed in England in 2009, while in 2010, only 102,750 – the

lowest levels during peace time since the early 1900s.

Figure 4: Housing completions in 2010; lowest peacetime level since 1923.

Source: Hill, R., Homes and Community Agencies, 2011



But numbers of completions alone do not give a full picture of net additions to the

national stock. Losses through war, slum clearances or demolitions for redevelopment,

conversions and changes of use should also be taken into account.

Recognizing the poor state of affairs in housing, the 2009 budget of the Gordon

Brown government provided £200 million to kick-start house-building – the overall aim

being to deliver 10,000 new homes in England over 2 years. An additional £300 million

were allocated for the purpose of re-starting stalled housing developments, while a

further £100 million were assigned to authorities for building new social housing at

higher energy standards.

Shortly after coming into power in May 2010, the Conservative party and Liberal

Democrat coalition, led by David Cameron and Nick Clegg respectively was faced with

a financial crisis. Two months later, the newly appointed Chancellor Osborne presented

the coalition’s ‘Emergency Budget, which was said to be based on the values of

‘responsibility, freedom and fairness’ (NHF, 2010).

The budget presented a five-year plan to bring the UK economy out of a record

deficit which was described as the ‘longest and deepest’ recession since 2nd world war

(Allan, 2010) (see Figure 5).

Figure 5: The ‘deepest’ recession since the Second World War.

Source: Allen, G., Recesssion and Revovery, 2010.



To reduce the UK’s unprecedented peacetime deficit of around £180bn (Jones Lang

LaSalle, 2011a) the coalition government announced wide ranging and predominantly

revenue focused efficiency measures to curtail its spending. The stated goal was to

achieve initial savings in the amount of £6.2 billion. Details of the proposed measures

were presented both in the Emergency Budget of June 2010 and later in its

comprehensive Spending Review of October 2010 (HM Treasury, 2010). Particulars of

government cuts on housing related support are listed as follows:

In February 2011, the CLG and HCA published a document, the 2011-15 National

Affordable Homes Programme (NAHP) Framework. This framework was

comprehensively summarized by McGuinness (2011), who described the policy as

primarily focussed on reducing capital subsidy for affordable housing in favour of the

Housing Benefit. A key feature of this new framework was the adjustment of social

housing rents from 50% to 80% of market rent. This adjustment would benefit providers

who signed the NAHP agreement with the HCA, and would apply both to the provision

of new Affordable Rent units as well social rent units to be rehabilitated to Affordable

Rent (McGuinness, 2011). To apply for funding under the NAHP, providers must be

either Investment Partners or meet Specialist Provision qualification (HCA, 2011).

Investment Partners would have met the NAHP requirements of technical readiness,

financial capacity, and good standing, while those providers qualifying under the

Specialist Provision route would have to demonstrate that they provide housing in any

one of the following areas: rural housing settlements, housing for black and minority

ethnicities, supported housing, environmental innovation, and housing meeting at CSH

Code level of at least 5 (HCA, 2011).

2.7 Concluding Remarks This chapter provided an overview of social housing supply in the UK from the post

2nd World War period to present. The chapter demonstrated how the provision of

affordable housing which reached its zenith 1945, gradually declined over the years as

a result of government policy and economic challenges.

At present, the current economic crisis has put further pressure on the government

as it aspires to meet its housing targets. To achieve its social housing goals, recent

policy changes focused on reducing funding while making significant adjustments to the



housing delivery chain. These adjustments were made as recently as December

2011, and it still remains to seen what is the overall impact on efficiency of housing

delivery.

Even with cuts in spending, government has made adjustments in administrative

policy, suggesting that government still hopes to meet its stated goals of 3 million

homes by 2020. Is this realistic or will the reduction of capital grants result in changes in

quality of housing (dwelling type, density, land use, space standards)? The following

chapter will explore this issue in more thorough detail.



Chapter 3 – Standards, Design and Cost of Social Housing

3.1 Introduction

While the second chapter of this thesis focused on the broader context, namely

governmental policies related to the administration and funding of affordable housing in

the UK; this chapter will explore the types, standards and costs of affordable housing

from the narrower London context. The rationale for the approach of this chapter is

warranted in light of London’s social, economic, political and cultural uniqueness

(Fenton at al, 2008). With regard to demand, Greater London has the most need for

social housing compared to Greater Manchester and the West Midlands city. Fenton at

al (2008) estimated that there are three times as many households in Greater London

compared to the aforementioned cities. Moreover, he indicated that London is the most

important destination for both domestic and international migration.

Household composition is different in London as well. While it is true that like the

rest of the UK, London has seen an increase in the number of single person

households, the average household size in London exceeds that of the rest of England.

Figure 6 presents the household size projections for London compare to the rest of

England.

Figure.6: Household Size Projections.

Source: GLA (2006) Household Size 1991 – 2026.



It follows that the extent to which the supply of housing will meet demand in London

will be assessed not only by the number of available units, but the types of dwellings

(i.e. number of rooms) that are built.

Strikingly, as of 2006, affordable housing construction in London was trending

towards an 80% production of flats, with a reduction in the number of 3 and 4 bedroom

units and an overall increase in 1 and 2 bedroom accommodation (GLA, 2006). The

outcome has been a greater percentage of 2 bedroom flats, certainly not in line with the

housing needs of the London population. This decrease in room number has been

accompanied by a decrease in floor space in spite of an increase in the space

benchmarks over the years (GLA, 2006). In spite of all this, housing is in general more

expensive in London compared to other regions (Fenton, 2008).

London’s uniqueness in social housing is also reflected in the design, distribution of

tenure and cost of social housing. With regard to tenure mix, renting in 2008 was more

common in London than in other districts. At that time, 5 of the top 10 boroughs

estimated to have the highest portion of council housing in their housing stock were

London boroughs (Fenton, 2008).

This chapter will explore the types, standards and cost of social housing in London.

Attention will be paid to dwelling types, density, brownfield and modern method of

construction (MMC).

3.2 Space, Dwelling Type and Design Standards over the years

Social housing for returning army personnel in the post second world war

‘Homes for Heroes’ initiative achieved a high standard of housing that can be credited

to the Government commissioned Dudley Report of 1944. This report provided a

thorough assessment of housing standards that would inform guidelines for post war

housing construction. These housing standards were outlined in the Housing Manual of

1944 which provided benchmarks for housing design, including site layout, estate

density, house types, room and flat size, efficiency in building, new methods and

materials, heat and insulation (CABE, 2010a).

Amendments via the 1949 Housing Manual Standards resulted in an even higher

quality of housing. Largely located in Greenfield areas, the design was generally semi-



detached dwellings with indoor heating and plumbing (Malpass and Murie, 1999).

Dwelling type standards advocated for the provision of a wide variety of houses and

flats ranging from 1 bedroom, 27.9 m² flats for single persons to 7 person, 4-bedroom

maisonettes of 102 to 109 m² floor space (GLA, 2006).

Such strict attention to high quality housing continued into the late 1950s until a

change in government policy resulted in a deterioration of social housing (Malpass and

Murie, 1999). At that time, projects were noted for low quality of design and

construction. This deterioration of standards can be attributed to a change in policy that

focused on the relocation of lower-income inner-city populations. The slum clearance

programme was accompanied by a reduction of investment in social housing

construction resulting in an unfortunate deterioration in the design and construction of

newly built homes (Stone, 2003).

Why did social housing suffer from such a lowering in standards in the 20 year

period in spite of previous efforts to improve housing quality? Perhaps it can be argued

that since the guidelines in public sector housing were related specifically to space, it

left the door open to substandard design and workmanship. The Housing Evidence

Summary Report (2010) supports this argument in part. The report argued that strict

space standards do not translate into good design.

The 1961 Parker Morris report ‘Homes for Today and Tomorrow’ emphasized

the need for space standards in housing. These standards were derived from a survey

of how people actually used their homes and respective rooms. Also included in the

report was the addition of a storage space requirement. The Parker Morris guidelines

were different from previous standards in that it paid particular attention to the internal

arrangement of the home in response to the changing needs of residents (RIBA, 2011).

The Parker Morris report was revised and improved upon in 1963 and published

in the Ministry of Housing and Local Government’s Design Bulletin 6 (RIBA,2008).

Included in these guidelines were space and furniture requirements for family and

personal activities as well as space required for moving furniture around. The Parker

Morris standards eventually became mandatory for all new council housing in 1969.

(Croydon Council, 2008). Table 2 provides a comparison of floor areas standards and

its changes since the introduction of the Parker Morris 1961 standards.



Table 2: Comparison of GIA and its changes since 1949.

Source: CABE, 2010b. Mapping space standards for the home.

Unfortunately, the excellent standards prescribed were not evidenced in the

housing of the 1960s. In the era of slum clearance, the mode of housing tended to be

multi-storied, industrialized, Radburn layouts which tended to be of poor design. It was

clear that space standards were necessary but not sufficient for ensuring good quality

design but it was also important to have good site planning and good quality in

construction (CABE, 2004)

Adherence to standards set out in the Parker Morris report was also determined

by the extent to which the state had the resources to fund the construction of such high

quality homes. Indeed, the recession of the 1980s saw the decline of housing

construction and a disregard for Parker Morris standards (The Design of Homes, 2009).

Housing Corporations which by this time had become the main provider of social

housing, in 1983, had compiled a new standards document entitled the Design and

Contract Criteria, which largely borrowed from the Parker Morris standards . Still,

because the priority was cost saving measures in house building; as the housing grant

decreased, so did the adherence to housing standard guidelines (Mathieson, 2010).



By the early 1990s, 68% of dwellings built by Housing Associations fell short of

benchmarks in storage and circulation space and were also poorly constructed

(Mathieson, 2010). The Scheme Development Standards (SDS) were published in 1993

as an attempt by the Housing Corporation to stem the lowering of standards in social

housing. The SDS was useful in that it provided guidelines regarding the minimum that

was expected in housing that was funded through the social housing grant (GLA, 2006).

Special attention was paid to meeting the needs of persons with disabilities according to

the requirements of the 1995 Disability Act and those of older citizens. In 1996, housing

design standards introduced the concept of urban design as a way local authorities can

influence the quality of construction of affordable homes (Mathieson, 2010).

In 2000, the Blair/Brown government introduced the Decent Homes Standard as

a measure to upgrade the quality of existing housing stock (Davidson et. al. 2009). The

standards pronounced the following guidelines for homes: “it must meet the current

statutory minimum standard for housing; it must be in a reasonable state of repair; it

must have reasonably modern facilities and services; and it must provide a reasonable

degree of thermal comfort” (CLG, 2006a).

By 2010, the programme was declared a success with 92% of the 2.1 million

social homes that were deemed to be in an unsatisfactory condition (HCA, 2011)

achieving the decent standard. In light of the positive results, the Spending Review of

2010 revealed that the programme would be further funded in the amount of £2.1

billion, with £1.6 billion allocated to council homes and £0.5 billion going to housing

associations (CLG, 2011). The goal was to fund the upgrade of 123,000 of the 410,000

homes assessed to be below the ‘decent home’ standard by 2014-2015.

That year, the London Design Guide (LDA, 2011) was launched which

presented the new design standard for London Homes. The expressed goal as

indicated in the guide was to improve the quality of London homes while maintaining

the unique character and appeal of London residential areas. The Guide covers

different aspects of design and quality. Standards were established to ensure, among

other things, that the design of the building fits in with the environmental context and

character of the area, complies with open space strategies, provides suitable place for

play where it is required, and ensures open spaces are accessible and properly placed.

According to the guidelines, the density of residential units should be in line with the



London Plan and should provide proper access to transportation and services.

Also, developments must have the appropriate mix of dwelling sizes and tenures. Other

standards regarding entrance to and circulation within buildings, parking and storage,

waste and recycling and post and deliveries are clearly highlighted in the document.

Key are the space benchmarks that are painstakingly outlined in the Guide. Table 3

presents the minimum space standards for varying dwelling types.

Table 3: Dwelling Space Standards.

Source: London Development Agency, 2011. Design for London.

These standards are said to allow for flexibility of arrangement within the living

space and ease of circulation. Specific care is taken to report on space guidelines for

different living areas, such as kitchen, living and dining areas, bedrooms, bathrooms

and toilets, storage, study areas, wheelchair user areas, and private open spaces.

3.2.1 Code for Sustainable Homes (CSH)

Recently design standards in social housing have focused on environmental

performance under 9 categories: energy and CO2 emissions, water, materials, surface

water run-off, waste, pollution, health and wellbeing, management and ecology (CLG,

2006b). Points are assigned to each category and the extent to which it will allow

homes to be assigned a Code Level ranging on an ascending scale from 1 to 6. The



minimum standard for affordable housing is a Code Level 3. The goal is that by

2016, all new homes will be zero-carbon or Code Level 6 (CLG, 2009).

3.2.2 External environment

There are several standards under which the external environment of housing

schemes can be assessed. The Building for Life (BIL) standard is a national standard

that is awarded to housing schemes that reflect excellence in design and place making

under the four categories: Character, Roads, Parking and Pedestrianisation, Design

and Construction and Environment and Community (Building for Life, 2011). Overall

there are 20 criteria that reflect how well the new homes integrate with their

surroundings. The public sector as adopted these standards as a method of

assessment as it relates to the award of affordable housing grants. The standards

specify the minimum number out of 20 points that will meet award criteria (Building for

Life, 2011).

Another standard, the Lifetime Homes standard was developed by the Joseph

Rowntree Foundation and applies to all new housing schemes within London through

the London Plan Policy. These standards comprise 16 criteria including access to the

home as well movement indoors and between floors. Developments must achieve all 16

criteria to achieve the Lifetime Homes Standard (Lifetime Homes, 2010).

There is also Secured by Design, which is a police initiative to prevent crime via

the right site layout and design. Elements of safety such as secure windows, doors and

locks must be determined in collaboration between the developer and either a police

Crime Prevention Design Adviser (CPDA) or an Architectural Liaison Officer (ALO).

While these standards have been included in the Code for Sustainable Homes, they are

not compulsory; however for public sector funding purposes, these standards are

mandatory (ACPO Secured by Design, 2010).

The question of whether or not these standards have been met is a different issue,

one that has been studied extensively. In 2004, London housing standards achieved a

very low ranking, with only 18% of homes achieving a grading of ‘good or better’ (RIBA,

2009). Another study by Croydon Council (2008) audited 100 affordable housing

schemes. The findings from the research rated 61 of the 100 schemes as being of

average quality, 17 of good or very good quality, and 21 of poor quality. The results



reflected that standards in building were generally mediocre. While there seemed to

be a positive trend towards urban design principles such as appropriate use of scale

and creation of active frontages, problems around a lack of specific design solutions

continue to be repeated. Room sizes that met the prescribed standards in the 1970s

diminished considerably in dimensions by the 1990s and onwards (Croydon Council,

2008).

In a study commissioned by the GLA the researchers explored space standards and

dwelling mix (GLA, 2006). The qualitative survey reflected findings based on anecdotal

reports that indicated that room sizes were decreasing. The problem maintaining quality

in design and construction over the years can be attributed to ‘higher land costs and

constrained land capacity’ (Mathieson, 2010). It is anticipated that within the broader

UK context, increasing cost cutting measures will put even greater pressures on quality

overall.

3.3 Affordable Housing Trends in London

3.3.1 Dwelling Mix

The trends on dwelling mix in London were obtained from the ODPM Housing Statistics

of 2011 (GLA, 2006). With regard to new build units, there appears to be a prevalence

of two-bedroom accommodation with a decline in 3 and 4 bedroom units. Additionally,

affordable housing construction has produced an inordinately large number of flats as

opposed to houses. The portion of three bedroom flats built is 10% compared to 5% in

2005. One bedroom flats have increased from 20% to 25%, while 2 bedroom units are

at 60% (GLA, 2006).

Considering the fact that London household sizes exceed values nationally, it

seems a contradiction that dwelling types are diminishing in number of rooms. The

mismatch between needs of the population and the housing that has been provided

over the past 10 years increases the risk of overcrowding.

3.3.2 Density

London’s population has been growing steadily since 1988 and continues to grow

(see Figure 7). In 2011, London’s population was estimated to be 8 million, an increase

of 10% over the last 10 years (Bentham, 2011). With limited space available and an



increasing population, it is not surprising that housing developments are of densities

larger than the national average (Mathieson, 2010). On average, housing densities in

London have increased from 85 dph in the 1990s to over 130 dph in 2010 (Mathieson,

2010).

Figure 7: Growth in Population.

Source: The Mayor’s London Plan, 2011a.

The key to building higher density developments in London, according to the Draft

Replacement London Plan (DRLP, 2009), is to ‘optimise and not simply maximize’

housing output. In a study commissioned by the London Housing Federation, ‘Capital

Gains: Making high density housing work in London’ (Cope, 2002), the author looked at

successful high density (81-455 dwellings per hectare) housing developments in

London, seven of which were managed by housing associations and one which was

managed by a local authority. They wanted to answer what factors made these high

density estates successful.

Among these factors were the following:

Spare Bedroom or bed space

Good management and maintenance

Sustainable and well integrated and inclusive communities.

Good design



The authors lamented that developers were allocating minimum space to affordable

housing, and emphasized the need for more family housing and an adherence to

minimum space standards in new build developments.

3.3.3 Brownfield vs. Greenbelt

In the late 1990s, government introduced a policy that was aimed at reducing

urban sprawl and Greenfield development. The goal was produce a denser form of

development (Wong and Schulze Bäing, 2010). This policy advocated for the

development of housing developments on brownfield sites.

Brownfield refers to land that has been previously developed ‘which is or was

occupied by a permanent structure including the cartilage of the developed land and

any associated fixed surface infrastructure’ (CLG, 2006c). Another definition for

brownfield land is ‘land that is or was occupied by a permanent structure which has

become vacant, underused or derelict, and has the potential for redevelopment’

(Shelter, 2011b). A brownfield site is contrasted with a Greenfield site which is land that

has never been developed. Greenfield sites can exist either within or outside of built-up

areas.

A national target had been established to build all new housing on brownfield

land by 2008 and for the most part, the goal has been met. There are estimated to be

over 66,000 hectares of brownfield sites in England, with approximately 22,000

hectares in London (Gray, 2012). Compared with the rest of England, brownfield land

use for residential development has been high. Figure 8 shows brownfield land

developed for residential use by region.

Figure 8: Brownfield land developed for residential use by region.

Source: Wong and Schulze Bäing, 2010.



The name Greenbelt refers to defined areas of land that exist around a city or town.

Greenbelt land was defined as early as the 1930s and was included in the development

plan during the 1940s Homes for Heroes initiative. Today greenbelts cover 1.6 million

hectares or about 13% of England. As of March 2011, approximately 560,000 hectares

are located in London (CLG, 2011c). The distribution of greenbelt sites in London is

presented in Figure 9.

Figure 9: London Plan key diagram.

Source: The Mayor’s London Plan, 2011b.

Restrictions on the development of greenbelts are very strict owing to the fact the

greenbelts are for the purpose of protecting open space. However there are exception

sites for social housing as demonstrated by the Planning Policy Guidance Note (CLG,

2006c). There has been an argument for using greenbelt sites for social housing in light

of the shortage of land available for development in London. Figure 9 shows how

development projects tend to be concentrated within the existing London boundary,

while the greenbelt areas remain untouched.

Housing in London is more expensive than any other part of England. Granted,

the gaps in rents between affordable and private sector housing can be as much as

£100 in the inner city, but compared to the rest of England, affordable housing is highly



priced. The reason for the high rents relate to the high land values in London as

well as the costs involved in construction.

3.4 Costs of Schemes

Housing in London is more expensive than any other part of England. Granted, the

gaps in rents between affordable and private sector housing can be as much as £100 in

the inner city, but compared to the rest of England, affordable housing is highly priced.

The reason for the high rents relate to the high land values in London as well as the

costs involved in construction.

Table 4 presents the construction costs for different types of dwellings. To meet the

prescribed CSH Code Level 3 for affordable housing, extra over costs are incurred

which further carry up market rent and therefore affordable rent values. Table 5

presents a summary of extra-over costs for meeting each Code Level for different types

of housing.

Table:4: Baseline Construction Cost.

Source: CLA; 2010.



Table 5: Summary of extra-over costs of building to each level of the Code in each of the dwelling types

and for a range of development scenarios.

Source: CLA, 2010.



3.5 Impact of MMC

Modern Method of Construction or MMC is a term that has been used in the

housing industry to describe a technique in construction that combines offsite

construction with onsite technologies (ODPM, 2003). MMC is a term used to describe a

range of processes, management techniques and constructions methods (Kempton et

al, 2009). This thesis will focus on three of the construction methods involved, for which

the Housing Corporation developed a construction classification system as follows:

Off site manufactured Volumetric

Off site manufactured Panellized

Off site manufactured Hybrid

Off site manufactured Subassemblies and Components

Non off site manufactured modern methods of construction.

In 2002, a Housing Corporation initiative was introduced to kick-start the use of

MMC in the construction of affordable housing as a means of maximizing the

government’s potential in increasing the social housing stock. This fund, the Challenge

Fund, provided £300 million to meet the objectives of providing social housing in areas

of high demand in London, promoting the use of MMC in construction, and producing

the housing more time and cost efficiently than traditional methods (HC, 2005). The

following sections will provide an overview of modern methods of construction that have

been used in the affordable housing sector, its advantages and disadvantages and the

costs associated with its use in recent times.

The use of MMC is not new. This technique of construction was used during the

Homes for Heroes Program of the 1940s and also during the slum clearance

programme of the 1960s (POST, 2003). An example is the Ronan Point Housing

Scheme, which was built in 1968 to relocate East London residents. Tragically, a gas

explosion caused an entire corner of the 22 storey building to collapse (Ross, 2002).

Other such disasters on MMC housing schemes resulted in widespread scepticism

regarding its use (Bura Report, 2005). However advancements and refinements in

MMC, in addition to recent shortages in skilled tradespersons in the field (eg. brick

layers, carpenters, plumbers, and electricians) have made MMC a more attractive

prospect in recent times (Johnson, 2010), particularly since most of the skilful

processes occur offsite. Moreover, MMC has been seen as providing excellent potential



for the regeneration sector to improve the delivery of large projects in terms of

efficiency and cost (Bura Report, 2005). The following MMC techniques are used in

affordable housing schemes in London.

3.5.1 Volumetric construction

Volumetric construction refers to the production of 3 dimensional units off-site in

a factory setting. Materials used consist of light gauge steel frame, timber frame,

concrete and composites. In residential construction, this method is particularly useful in

the production of highly serviced areas such as bathrooms and kitchens. This form of

MMC has been used in UK house building since the 1970s (Bates, 2010). The benefits

associated with volumetric construction are low labour costs related to reduce on site

labour requirements and lessened on site construction time (NHBC Foundation, 2005).

Compared to traditional house building techniques, volumetric construction has been

known to reduce onsite construction time by as much as 50-60% (NAO, 2005b).

An important point of concern regards the occurrence of errors in design. As

volumetric units are generally mass produced, any defects are likely to be repeated for

each module and may not be detected until the units are lived in. Rectifying such errors

are therefore likely to incur huge costs (POST, 2003).

3.5.2 Panellised construction

This system is very popular in London affordable housing construction, and

refers to the production of walls, floors, roofs that envelope a building (Davis Langdon

and Everest, 2004). The panellised systems use materials very similar to those used in

volumetric construction. Among the construction materials, mentioned above, timber-

frame is most commonly used as it meets environmental standards (Westframe, 2011).

Additionally, there has been an increase in the use of structural insulated panels (SIPs).

The Davis Langdon report (2006) describes SIPs as ‘rigid insulation boards bonded

between plywood or orientated strand boards’ that are ‘load-bearing, durable and

adaptable’.

Unlike volumetric systems, panellized systems are not mass produced,

therefore allowing more flexibility in design specifications according to client needs

(Buildingtalk, 2010). Timber frame are considered to be superior to traditional methods



because it provides excellent insulation and lightweight construction within a

shorter time. Unfortunately, the panellized system is said to incur a 5% added capital

cost on that of traditional timber frame construction, however such costs are usually off-

set during the shortened onsite construction phase (Davis Langdon and Everest, 2004).

3.5.3 Off Site manufactured – Hybrid Construction

This type of construction is a combination of the Volumetric and Panellized

techniques. In this case, highly serviced areas (pods) are constructed by volumetric

techniques, while the remainder of the home is constructed using the panellized

system. Hybrid construction enjoys the benefits of both volumetric and panellized

systems, however, since these different units are generally produced by different

manufacturers, there is a risk of problems of design coherence especially if the units

are made of different materials (NHBC Foundation, 2006; POST, 2003).

3.6 Design Quality and Cost

So far, studies have not demonstrated a clear relationship between design quality

and the use of MMC. An evaluation of the design quality in the schemes funded by the

Challenge Fund revealed that none were considered to be of outstanding design

quality. Moreover, results have indicated that there has been no cost saving to date with

the use of MMC. In fact some schemes have been shown to cost more than traditionally

built projects (POST, 2003; Windapo and Balogun, 2009). To date, there is not enough

data regarding the more complex MMC schemes in terms of costs. It is believed that

accurate cost information will be useful to decision making early in the process but

currently such information is usually confidential (POST, 2003).

3.7 Concluding Remarks

This chapter focused on design standards, types of social housing developments,

and cost of social housing with a particular focus on London which is a unique to other

cities in the UK. The chapter showed that to date, social housing has failed to meet the

various design standards and tend to be of either poor or mediocre quality. It is believed

that economic challenges tend to determine the extent to which standards are met.



The chapter also showed that in light of London’s large and ever increasing

population and lack of available land, there has been a push to increase the density of

developments as well as use brownfield sites to establish urban developments.

Greenbelt sites, generally seen as protected recreational areas, have also been

proposed for use in order to meet the high demand for housing, but such arguments are

controversial.

One recent initiative has been the use of MMC. The 2001 Challenge Fund allocated

substantial sums to money as an incentive for developers to use off-site manufacturing

in the provision of social housing. Traditionally met with scepticism, MMC has become

more attractive as a cost and time saving approach. However studies to date have not

supported this assertion, as MMC schemes have not been shown to reduce cost. There

has also been no demonstrated improvement in design quality through the use of MMC.

The lack of data on the costs of MMC and the utility of MMC in providing housing in a

time efficient manner is a major problem for the field. This study hopes to add to the

currently deficient literature.



Chapter 4 – Methodology (Findings from the case studies interviews)

4.1 Introduction

This chapter will describe the methods used to achieve the aims and objectives of

this study. As has been summarized in Chapter 1, the general focus of this research

was to understand how government spending impacted social housing in London.

Specifically the research questions were as follows:

How has the structure for the delivery of social housing changed?

Have there been adjustments in the number of the participant agencies and their

roles?

Have the changes in the delivery structure achieved its intended goals of

increasing efficiency and reducing costs?

How does the government’s new policy affect spending in social housing

construction?

What are the key factors that influenced costs in social housing?

How does reduced governmental spending affect the construction programme

(project portfolio) of RPs in terms of number, types and sizes of schemes,

available land whether brownfield or greenbelt, mix between rehabilitation/new

development and density (high or low)?

What is the level of use of MMC and what has been its impact in social housing

construction?

To accomplish these objectives, this study employed the exploratory type of

research which features a review of literature, and additional data gathering approaches

including case studies interview and quantitative data analysis.

4.2 Research Design and Approach

This study employed a range of data collection strategies, including the

qualitative approach which featured the use of interviews to gather data; as well as the

gathering of quantitative data by perusing databases. It is important to provide a

rationale for the use of both methods.



The formal and objective methods involved in quantitative data collection, allows

the author to answer research questions by collecting numerical data that can be

analysed statistically (Creswell, 2009). For this thesis, the author used descriptive

statistics to examine the trend of cost per m² and duration of completion for common

building types (estate housing and flats) over a period of 15 years.

The use of qualitative data collection facilitated the gathering of individual

interpretations and impressions of the present situation through the use of interviews.

After collecting the interview data, analyses focused on identifying themes, categories,

and patterns within the narratives.

Creswell (2009) described the combining of elements of quantitative and

qualitative research in one study as the Concurrent Mixed Method approach. This

mixed model approach is considered to be appropriate for the purposes of this

research. Combining both qualitative and quantitative methods of exploration will allow

the researcher to synthesize the findings of different data formats that were collected for

the same purpose (Tashakkori and Teddlie, 2003). This approach is considered to

provide greater depth and breadth than can be achieved by using one approach alone

(Creswell, 2009). It also allows the researcher to use one form of data to validate the

findings of the other (Creswell & Plano Clark, 2007).

4.3 Research Methods Chosen

The following sections will describe the data collection methods that were

employed in this study: the literature review, the case study interview and the

quantitative data collection.

4.3.1 Literature Review

In order to answer the research questions, information was provided by the

following sources:

Academic Journals

Governmental Publications

Organizational Publications

Textbooks

Trade Journals, Newspapers and Magazines



4.3.2 Case Study Interview

Case Study Interviews were used for the purpose of collecting narrative data.

Three main types of interviews were available to the researcher:

4.3.3 Structured Interview

For the structured interview, a researcher utilizes a rigid list of questions which

are not deviated from. The purpose of the structured interview is to reduce the

complexity of the data by having fewer categories or variables to analyse.

4.3.4 Semi-structured Interview

This type of interview also employs the use of a script, however the interviewee

has the freedom to divert from the main line of questions for clarification or to increase

the depth of information.

4.3.5 Unstructured Interview

This approach obtains information in a largely open format. Questions are not

predetermined and the direction of the interview is led by the interviewee, and depends

on what is revealed by prior questions. Such an approach has the advantage of

broadening the potential volume of data that can be obtained; however such richness of

data can be burdensome as there can be an infinite number of variables or categories

for analysis.

The chosen interview format for this study was the semi-structured interview

which was considered to provide richness of data without complicating the analysis.

See Appendix A for a list of questions.

4.4 Respondents

To answer these questions quantity surveyors, housing associations and

developers were interviewed. They were asked to describe their roles in the delivery

chain and assess their understanding of how the delivery chain worked before recent

reforms and how they worked after. They were also asked to give their



recommendations to increase efficiency and to achieve value for money in terms of

adherence to design and space standards. Regarding the policy aspects involved in

housing provision, the views of housing association managers and developers were

sought.

Prior to data collection, informal meetings were scheduled with one individual in the

field, a quantity surveyor, whose name is withheld. The purpose of the meetings was to

identify key areas of concern that could form the basis of the research questions that

were asked and also to refine and finalize the list of interview questions.

Subsequent to the informal meeting and finalization of structured interview, 16

individuals were contacted and 8 agreed to complete the interview in written format.

They all agreed to participate in follow up interviews if the need arose. Via email, the

interviewee was provided with a summary of the research project along with a copy of

the structured interview questionnaire.

Lack of information resulting from difficulty recruiting participants was a major

limitation of this study. Of the 16 intended participants, only 8 volunteered and made

themselves available to be interviewed.

Special care was taken to reassure the interviewees that their responses will be

kept confidential. As such their names and key information about their places of

employment or company affiliations will not be revealed in this document.

4.4.1 Housing Association

Of the 3 housing association approached, one admitted a lack of knowledge related

to the delivery chain, spending and MMC.

HA1 holds a MSc. degree in Quantity Surveying. He has had 5 years’ experience

working with LAs and 10 years’ experience as a senior consultant – among his most

recent experiences has been working with the GLA/HCA. His work as been primarily

concerning the viability of building new homes, and he has completed many projects.

HA2 has 25 years of experience as a Social Housing/Development professional and

has worked with LAs, HAs, and in the private sector. For 17 years, he was the



Development Director for a major HA; building over 100 homes per year. He spent

18 months running a consultancy which helped landowners and developers resolve

affordable housing issues successfully in S106 agreements. Currently, he is part of a

consultancy, which in its first year, was involved with acting for approximately 30

landowners and developers on about 4000 affordable homes.

4.4.2 Developer

D1 holds a MSc. in Land Management. He is currently a Regional Development

Director for London. His responsibility is provision of 2000 homes, most of which are

affordable homes. He has had experience in a variety of roles in regeneration, land

acquisition and project delivery. His current challenges involve meeting GLA housing

targets by March 2015, finding land sites that are deliverable with consents, competition

for sites with other HAs and managing the fallout of changes in government housing

policy.

D2 has 25 years’ experience working with HAs prior to which he worked with

LAs. He is currently the CEO of a housing association, which is a landlord, developer,

support and care provider and investor in communities. Projects have included delivery

of 1000 homes per year, generally consisting of 30 to 100 unit mixed tenure sites. He

has also been involved in some Section 106 projects. Additionally, he has been

involved in regeneration projects, specifically the demolition and replacing of council

estates.

D3 holds a BSc. in Building Surveying. He is a Chartered Building Surveyor. He

is currently a Senior Development Manager and is responsible for managing new build

housing projects. The company is a Not for Profit business and builds for social

purposes and its core activity is being landlord to 56,000 homes throughout England.

4.4.3 Quantity Surveyor

Of the two quantity surveyors approached, only one of the two completed the

questionnaire satisfactory. QS1 holds a BSc. (Hons), MRICS and CIHM and is a

Chartered Quantity Surveyor experienced in both the private and public housing sector.

He served as an environmental consultant to HAs and developers working in both



markets. He also runs a private consultancy with 20-30 employees. Projects include

one-off housing, mixed tenure housing schemes, and larger mixed use

residential/commercial schemes.

4.5 Data Analysis

For the purposes of analysis of data, this study used the content analysis approach.

There is no one definition of content analysis. Stemler (2001) describes content

analysis as the ‘systematic, replicable technique for compressing many words of text

into fewer content categories based on explicit rules of coding’. Holsti (1969) defines

content analysis as any ‘technique for making inferences objectively and systematically

identifying the specific characteristics of the messages’. These two definitions represent

varying conceptualizations of this analytical approach. Indeed, content analysis can

range from rigid, strict and replicable processes to impressionable, intuitive and

interpretive analyses (Rosengren, 1981).

A particularly rigid approach is the summative approach which involves searching

the text or transcript for the occurrence of a prior determined word, term, or phrase, and

then summing the frequency at which the words appear. Once these words are

identified, the context within which the words appear is ascertained. The summative

approach is considered to be non-reactive and non-obtrusive (Babbie, 1992) and

perhaps the least subjective of content analyses.

Other approaches can involve a method of ‘coding’ which specifies clear and

replicable rules by which categories can be identified within the content of the data

(Weber, 1990). Depending on the theoretical background of the study, the categories

would have been already determined and therefore interviews and data collection

methods would be designed with particular categories in mind. This structured type of

approach, otherwise known as Directed Content Analysis, is guided by the findings of

prior research and provide evidence that can support pre-existing theories. The obvious

difficulty with such design is the potential for researcher bias, whereby the researcher

may be inclined to find data or evidence that supports the theory (Hsieh & Shannon,

2010). Also there is a risk that interview questions would provide certain cues that may

influence the participant to respond in a way that would support the theory.



Such risk for bias is less likely in studies that use Conventional Content Analyses;

these studies are more open-ended and designed for the purpose of describing a

phenomenon. Such studies lack a priori categories or codes. Codes are derived from

the actual data, after the interview process is completed (Hsieh & Shannon, 2010). The

interview process consists of largely open ended questions. The semi structured

interview guides but does not constrict it. Follow-up questions are based on the

information that has been gathered during the interview process.

For the present study, conventional content analysis was used as there is limited

theory from which to derive codes or categories. The written responses were

summarized into categories or groups of words with similar meanings and then

presented in the findings. The main concern with conventional content analysis is that

the process of coding is not scientific enough and subject to the interpretation of the

researcher thus jeopardizing reliability and validity.

With specific regard to this research study, and as with all qualitative studies, this

thesis risks being criticised for being subjective or biased in favour of this researcher’s

opinion. Also, because of the small sample size, another feature that is associated with

qualitative research, problems of generalizability are likely to crop up. The results of this

study may or not be applicable to any other setting because of the uniqueness of the

London situation. However, it is argued that there are ways to protect against problems

of bias and lack of generalizability. One of these strategies regards the actual research

questions.

For this research it was important to carefully and clearly specify the research

questions and the participants that were selected for research. Peer reviews and

debriefing with the participants in the study to check for agreement and accuracy was

another effective way of ensuring that the categories that have been identified fit the

data or that the researcher did not miss key categories (Hsieh & Shannon, 2010).

Another important approach was to supplement and/or cross check the findings of

the qualitative analyses with results from the literature review and analysis of

quantitative data.



Chapter 5 – (Findings from the case study interviews)

5.1 Introduction

Of the 16 questionnaires that were emailed to the various selected participants, only

8 responses were returned. Of the 8, responses from 2 Housing Associations, 3

Developers, and 1 Quantity Surveyor were completed fully and considered to be

suitable for analysis. Of the abandoned questionnaires, one was not completed enough

to contribute to the analysis and one of the respondents indicated that he either could

not understand the questions or did not know enough to respond.

Full responses have been supplied in Appendix B. For the purpose of data analysis,

results of each question have been collated under one of the following headings:

View of the Delivery Structure,

Funding and Design, and

Spending and Design.

Later in Chapter 6, the findings will be discussed under theme headings with a goal

of meeting the aims and objectives of this study, which is to answer the research

questions that have been listed in Chapter 1 and Chapter 4.

Connections will be established between the reviewed literature and the data findings,

as well as comparisons will be made with the results of quantitative data analyses that

were also undertaken in this study.

5.2 Housing Association

The representatives of two HAs, HA1 and HA2 provided information for analysis

under this heading.



5.2.1 View of Delivery Structure

Has the role of the housing association in the delivery structure changed since

the government’s recent social housing policy reforms and how?

The general response was that the role of HAs was changing. HA1 noted that

where the HA was traditionally the main provider, it is no longer at the forefront of

delivery. Additionally, the result is confusion within the HAs about their new role. With

the withdrawal of higher grants, the HAs are faced with the dilemma of making a profit

versus building for charitable purposes. Moreover, he suggested that with a lower

grant, HAs are forced to pursue risky ventures to generate income, with little potential

for positive outcome. HA1 also anticipated that the role of HAs will lessen, and with the

decreased presence of the HAs, the LAs are poised to be at the forefront of social

housing provision.

According to HA2, the removal of higher grants has negatively impacted social

housing delivery. From the perspective of financing, increased gearing has placed

restrictions on HAs therefore reducing housing supply.

Has the recent changes in the delivery structure resulted in greater efficiency and

how?

To this question, both respondents disagreed with the notion that changes in the

delivery structure resulted in greater efficiency. HA1 admitted that the transfer of

housing provision responsibility from HAs to LAs was a good move in that HAs were

dependent on higher grants and S106 which limited the HAs especially in current

economic conditions. Conversely, LAs had the advantage of ‘free land and a large

borrowing capacity’. Still, he conceded that the emergence of LAs as the main housing

providers, will see a transfer of skills from the HAs to the LAs, perpetuating old

practices.

For HA2, it is not the delivery chain that is responsible for efficiency, it is

demand. He asserts strongly that less demand results in greater efficiency – a point that

he expands upon in later questions.



5.2.2 Government Spending and Cost

With regard to meeting housing needs, can you tell me which funding and

delivery models can potentially be the most cost-effective?

HA1 expressed confidence in the LAs based on the fact that they had access to

free land and low cost financing; however, a point of main concern regarded the skills

gap which he suggested might result in poor decision making, or even no decision

making. Still, with the right conditions, LAs as main developers of new build housing

were likely to keep rents low and provide housing for those most in need.

HA2 advocated for a return to the grant free S106, which he insisted would

lower government spending. He compared S106 to the current Design and Build (D&B)

project delivery system. According to HA2, S106 costs are expected to be lower than

D&B costs.

Government spending reviews have constrained public funding for housing.

What is your suggestion to make best use of the current public funding to bring

additional resources for housing?

With more constraints on public funding for social housing, the responses

focused on removing competition among RSLs and problems associated with debt

covenants. HA1 pressed for greater care to be taken when analyzing bids and

allocation grant funding. HA1 suggested also that more grants should be issued to

RSLs that can best contribute from their own resources. Also he asserted that reduction

of land prices can be effective at bringing additional resources for housing. He observed

it was the competition among RSLs as they place bids for land that carried up land

prices. So by reducing competition, new housing costs would be reduced. He also

recommended a return to the old TCI system to reduce costs.

HA2 insisted that there was no need to bring additional resources for housing,

and that in fact, the resources were there for housing. What was absent was the desire

to take risks, largely due to bank covenants.



5.2.3 Design and Cost

What is your response to the suggestion that government should spend less on

building and improving social housing and more supporting the delivery

structure chain?

HA1’s response to the question seemed to suggest that government could

support the delivery chain by bringing more land to the market.

HA2 agreed that supporting the delivery chain can be effective if done

purposefully. HAs must be encouraged to ‘step up capacity’. Additionally, banks must

remove harsh limitations to HAs seeking equity funding or disposing of properties. He

also suggested that further support can be offered through giving long term certainty to

the rent regime (Affordable Rent Level at RPI +0.5%) and by reviewing how HA stock is

valued (EUV-SH is outdated). Other changes in the area of financing as suggested

including balance sheet reviews to increase asset value.

In your experience, how has the reduced governmental spending affected the

company’s developments portfolio?

Number of current and projected schemes?

HA1 anticipated that reduced public spending would not have an immediate

impact on developments portfolios as most current schemes are funded from the 2008-

2011 programme. However his expectations are that, projected schemes are likely to

collapse as there are no plans beyond 2015. HA2 shared this opinion as he suggested

that most HAs have reduced their program size and operating area.

Duration of Construction Projects?

Both respondents (HA1 and HA2) did not view reduced spending to have an

effect on the duration of construction projects.



Ratio of rehabilitation projects to new developments in social housing?

HA1 anticipated that there will be less rehabilitation projects. Regeneration

projects do not generate extra income and therefore rely on grant funding, making this

approach less viable in these times. HA2 agreed that new build projects are the

predominant schemes at this time. He added that less HA demand has resulted in an

increase in the percentage of S106 projects.

Density and space standards?

According to HA2, there is little interest in developing social housing above a

CSH Level 3 and no potential impact on space standards. The reason for this is clear

as reduced funding makes it a very difficult prospect to adhere to increasing standards.

HA1 was even stronger in his opinion, criticizing the implementing such high design

standards at a time when funding is at a low. The benchmarks are for larger rooms,

which will increase market rents which will inevitably have an impact on the social

housing rents. So increasing standards is having the impact of reducing viability.

Available land for developments (brownfield or greenbelt)?

Only HA1 responded to this question. He suggested that land availability will be

restricted as landowners will wait for the market to heat up before they dispose of their

land.


To improve design and construction quality, a set target of 25% of funding for

social housing developments must be allocated to modern methods of

construction (MMC). What type of MMC technology has been in use, and what

has been its impact in terms of cost, quality and time on social housing

developments in your company?

Having completed a few MMC projects, HA1 argued against the use of MMC.

The suggestions that use of MMC can result in greater time and cost efficiency were not

realized on the projects that HA1 was involved in. He also expressed concern that

these projects will have a shorter life cycle than traditional build projects. HA2 reported



a greater experience with MMC schemes, using SIPS, Panelized systems and

volumetric systems. In his experience, these projects were completed at a higher cost,

and were only used for CSH compliance. Both HA1 and HA2 suggested that the 25%

has been removed.

5.3 Developer Three Developers, D1, D2, and D3 provided information for analysis under this

heading.


Has the role of the developer in the delivery structure changed since the

government’s recent social housing policy reforms and how?

D1 remarked that from his perspective, his role which is both client and

developer – contracting with builders to provide homes, and remaining as property

owner and landlord after completion has not changed since government policy reforms.

D2 remarked that there have been changes. He remarked that Developers have to be

more independent as there are less Section 106 agreements. D3, whose role has been

to take projects from land exchange stage to project closure, remarked that government

policy has become more complicated. The reaction at D3’s company has been vertical

expansion of the team by splitting it into New Business and Delivery.


how?

The developers seemed to all agree that efficiency has not increased. According

to D2, efficiency hasn’t changed. What has changed is land prices in London, which

have increased. D3 urged a wait and see approach. He explained that it was too early

to tell. At this time, internal and external bureaucracy may be impacting negatively on

efficiency.




With regard to meeting housing needs, can you tell me which funding and


All the developers suggested that increased capital funding and subsidy was the

most cost-effective model to meet housing needs. D1 said that affordable housing

provision required capital subsidy. Currently, the Affordable Homes Programme (AHP)

is about reducing capital subsidy. This results in higher rents which are subsidized via

the Housing Benefit. According to D2, this approach may be useful if the goal is simply

to provide immediate shelter through zero grant schemes of high density and poor

standards. However if the focus is on families and building communities over the long

term, then it is important to ensure good design and provision of public space and

reasonable rent levels. For this to occur, capital funding is needed. From the

perspective of D3, new homes should go where it is most needed.

Government spending reviews have constrained public funding for housing.



The main theme here was government funding. D1 lamented the lack of government

investment in affordable housing. Rather, the focus has been on funding the market

rented sector. The problem with this approach is a lack of congruence with the current

cultural framework in London which is a preference for home ownership. The

disadvantage of this approach has been the high house price resulting from

supply/demand imbalance. If the supply would increase, house prices will become more

affordable. D2 insisted on the need for capital funding or subsidy through government

land, or incentives such as cheap loans, or underwriting sales risks. D3 suggested that

more private/social housing developments should be allowed in areas that are set aside

for social housing under the planning policy.




What is your response to the suggestion that government should spend less on

building and improving social housing and more supporting the delivery

structure chain?

To this question D1 indicated that either approach could have a positive impact

on increasing housing supply, however, he remarked that investing in housing directly

gives the funding agency more control in ensuring that it is provided where it is most

needed. He referred to regeneration projects that have suffered over recent times and

reductions in funding. He insisted on rehabilitation projects that deliver much needed

housing to established communities. D2 asserted the need to build homes and to

cease speculating. D3 described supporting the delivery structure chain as a way of

supporting private developers who are generally more profit motivated. Therefore it is a

bad idea especially if the goal is provide social housing where it is needed.




D1 projected a decrease of about 60%. D2 has noted a reduction of about 50%

of their programs in addition to moving some of the projects to the open market to

create cross subsidy. D3 had not experienced a reduction in schemes, he reported on

reductions for other RSLs.


Two of the three respondents did not indicate a change in the duration of

projects. D1 suggested however, that projects have tended to be smaller and more

fragmented.




D1 reported that there have been some infill refurbishment projects on existing

sites, while D2 suggested that rehabilitation projects stopped years ago. D3 did not

agree that there has been an impact.


Two out of three developers responded that there has been no impact of

government spending on density and space standards. D1 suggests that density and

space standards have increased due to funding conditions.


All three developers agreed that land availability has not been affected by

reduced government spending.






developments in your company?

Two of the three developers were able to answer this question, as D1 admitted

to a lack of experience with MMC projects. D2 admitted that MMC may be useful at

increasing speed and reducing defects, but it does not improve design and construction

quality. He stated that care must be taken to use reliable products as heavy costs can

be incurred in maintenance and repair if these products were found to be flawed. D3

reported using timber frame and other continental type systems in construction. To

date, he has not seen benefits in cost or quality.



5.4 Quantity Surveyor

QS1 provided information for analysis under this heading.


Has the role of the housing association in the delivery structure changed since


QS1 suggested that the Quantity Surveyor’s role continues to evolve as policies

change. In the current climate, the Quantity Surveyor’s role is expected to change from

basic cost planning to evaluations of alternative forms of construction and renewable

systems including life cycle costing. The Quantity Surveyor will need to develop a

greater knowledge of government funding, private funding and sustainability funding

and also to be aware of the benefits in cost of alternative methods of construction.


how?

QS1 did not agree that the changes in the delivery structure have resulted in

greater efficiency.


QS1 did not respond to this question.





QS1 reported a reduction in schemes overall.




QS1 did not respond to this question.


QS1 did not respond to this question


QS1 suggested that while a reduction in funding was expected to result in a

lowering of standards, space standards have improved largely due to the GLA and

London Housing Design Guide, Lifetime Homes Compliance and CSH Level 4

requirements. Additionally, adherence to guidelines are necessary for funding therefore

developers have no option but to follow these guidelines.


There was no response to this question from QS1.






developments in your company.

QS1 admitted to limited experience with MMC however he stressed that the

method is seen as risky both in cost and marketability.



Chapter 6 – Analysis and Discussion

6.1 Introduction

The focus of this chapter is to answer the research questions that were listed in

Chapters 1 and 4. Using each question as a heading, the themes that emerged out of

the interview responses will be discussed. Also where applicable, the results of the

interview will be compared with the findings of published data within the literature

reviews of Chapter 2 and 3, as well as, the results of quantitative analysis of raw data.

6.2 Delivery Structure

Research Question 1: How has the structure for the delivery of social housing

changed?

Information for this question was obtained from reports, articles and government

policy documents and was summarized in Chapter 2.

Based on the exploration of the literature, key changes have been made to the

delivery chain that was first introduced in 2004. Figure 4 showed how initially, funding

was directed from the ODPM, to Government Regional Offices, to the Regional Housing

Boards and Planning Bodies, then to the LAs which then disbursed funding to HAs and

Developers respectively.

Instrumental to the 2011 changes to the delivery chain was the introduction of the

Localism Act, which transferred decision making power from the ODPM to the councils.

In London specifically, the Mayor of London takes a prominent role. Additionally, there

were reforms to the HRAs and the introduction of the HCA. The HCA is the body that is

responsible for funding and analysing bids of the pool of contractors and developers

(See Figure 10).



Figure 10: Delivery Chain Social Housing, 2012

Source: Trower and Hamlins, 2009

The interviews did not provide further clarity in this area. Perhaps, what these

results suggest is that although the delivery chain has been simplified, the roles within

the delivery chain remain complex, and the members of the delivery chain continue to

be unsure about how the chain is supposed to work.

Research Question 2: Have there been adjustments in the number of agencies

and their roles?

Figure 5 in Chapter 2 illustrates the new delivery structure of November 2011. The

chart demonstrated a clear reduction of participating agencies. This reduction in

number is accompanied by increasing responsibilities for individual agencies

particularly the HCAs and HAs in affordable housing delivery; however the interview

responses reveal another aspect to the picture that is not obvious by simply studying

the policy document.

Analysis of interviews revealed the following themes:

Emergence of LAs as main affordable housing providers

Increased uncertainty about roles

Delivery chain changes did not occur in a vacuum, but were accompanied by

changes in the allocation of funds. The outcome to these funding changes is the HAs

are no longer at the forefront of affordable housing delivery. The LAs in fact have

assumed the lead role in this area because of its lack of dependence on higher grants.



The decrease in capital funding has placed the HAs in a position of uncertainty

about their roles. Previously buoyed by governmental subsidies, the HAs are now in the

unusual position of having to seek other sources of revenue, changing its role to a

competitive and profit seeking entity. Lamentably, the HAs are constrained by debt

covenants, and thus, risk taking is not such an attractive option. The situation has

become more complex and complicated. Developers have to become more

independent and Quantity Surveyors are expected to broaden their roles from basic

cost planning and expanding their knowledge of funding opportunities that are available.

Research Question 3: Have the changes in the delivery structure achieved its

intended goals of increasing efficiency and reducing costs?

To answer this particular research question, interview responses were analyzed and

compared with the results of statistical analyses of raw data. The results are provided

below.

Based on the responses, the following themes were identified:

No changes in efficiency

Increased bureaucracy

Perpetuation of established practices

All respondents agreed that the changes in the delivery structure have not resulted

in increased efficiency in affordable housing delivery, at least not as yet. One

interviewee even urged a wait and see approach as increased internal and external

bureaucracy has held up progress.

This makes intuitive sense especially as the structural changes are in its early

stages and the delivery chain is transitioning from one format to another. Indeed there

are many adjustments to be made. One interviewee spoke of the movement of staff

from the HAs to the LAs. This transitioning period would likely impact negatively on

efficiency. For example, he spoke of the skills gap that now exists which either results in

poor decision making or no decision making. Therefore it is left to be seen whether the

structural changes will eventually result in better efficiency.



The question is whether the perceptions are supported by actual data. To determine

whether the changes have seen reduction in cost and increased efficiency summary

and analyses of raw data were carried out.

First, the researcher attempted to calculate average building costs for the period

1997 to 2012 using raw data that were gathered from the BCIS online database.

Unfortunately, data from the period 2009 to 2012 was found to be unreliable and could

not be included in the analysis.

As a 2nd option, the researcher compiled a graphical summary of Tender Price

Indices (TPI) from the period 1997 to 2010. The TPI measures the fluctuation of

accepted tender prices for housing contracts for single to four storey dwelling units in

the social housing sector. The TPI was selected as a suitable means of estimating

costs in social housing construction. TPI is generally related to demand which impacts

house-building costs. Figure 11 presents the Tender Price Index for Social Housing

(TPISH) indices for the period 1997 to 2010. The results demonstrate a steady increase

TPISH between 1997 and 2008, followed by a steady drop that continues to 2010.

Figure11: BIS/TPISH Tender Price Index of Social Housebuilding; New Build.

Source: BCIS online; Average Prices; 2012.



It has been suggested that the lowering TPISH can be linked to lowering demand.

The drop in TPISH coincides with the recession of 2008. As with any recession, the air

of pessimism dulls much economic activity. This along with the reduction of government

funding, increased gearing and restrictions set by lending agencies have lessened the

drive towards taking on risky projects, resulting in less business for the developers, and

therefore a lowering of costs. Indeed the construction orders in the social housing

sector have decreased. Additionally, contractor’s input costs, labour rates, and material

site prices fell in 2011.

Second analyses were done to investigate the impact of delivery structure policy

changes on efficiency. Efficiency in this case is operationalized in terms of completion

time for projects. Based on the statistical analyses, completion time does not appear to

be lowered since November 2011 (See Figure 12).

Figure 12: Average Construction Duration in weeks.

Source: BCIS Online, Duration calculator, 2012.



6.3 Governments Spending

Research Question 4: How does government’s new policy affect spending on

social housing construction?

Themes identified in the analysis of responses under this heading included:

Removal of capital grants

Lower risk taking

Section 106

Based on the literature, the UK deficit forced the coalition government to curtail

spending to achieve savings. This policy resulted in substantial cuts amounting to

approximately £6 billion. Included in the policy change was the reduction in the capital

grant. Therefore the Housing Association is now to force to seek its own income via rent

subsidized by the housing benefit.

The removal of the capital grant showed up as a main theme in the interviews. The

positive benefit was the emergence of LAs as a major player in the delivery of

affordable housing. The LAs have access to free land and low cost financing and

therefore this move was a positive step.

The same is not true for HAs, and this is where the problem seems to lie from the

perspective of the respondents. The removal of capital funding has led to increased

gearing which has placed major restrictions on the HAs which have been spending less

on affordable housing construction in spite of the fact that the agencies have sufficient

resources – ‘balance sheet strength, surpluses, and access to funds from equity

investors’.

6.4 Factors influencing costs

Research Question 5: What are the key factors that influenced cost of social

housing?

Based on the findings of the literature review and interviews, the factors believed to

influence the cost of affordable housing in London are:

Increasing design standards/CSH



Increasing land prices

Removal of S106

The past years have seen an increase in space and design standards. The London

Design Guide sets out benchmarks that all new housing must achieve. Moreover, the

CSH provides guidelines under 9 categories of environmental performance. As of now,

affordable housing must meet the minimum standard which is Code Level 3; however

the goal for 2016 is Code Level 6 or zero carbon for all new homes.

Meeting the standards is a key requirement for funding. Table 5 in Chapter 3

demonstrated the extra over costs for achieving each code level. The fact is that the

cost meeting code level 3 can range from £2000 for a medium to large urban 2

bedrooms dwelling to £3,020 for a 3 bedroom semi-detached dwelling. In light of this

fact, the government was criticized for insisting on higher design standards while cutting

grants.

With regard to land values, Chapter 3 showed that land values in London are higher

than in the rest of England. One of the interviewee argued that the existence of

competition between RSLs is driving up land prices, resulting in increased cost for new

housing. He insisted that removal of competition and reintroduction of the TCI would be

effective at reducing costs. Another suggestion regarded bringing back S106 which was

perceived to lower costs and purchase prices compared to Design and Build.

6.5 The Project Duration

Research Question 6: How does reduced governmental spending affect the

construction programme (project portfolio) of RPs in terms of number, types and

sizes of schemes; available land; mix between rehabilitation and new

development; and high and low density.

It appears that government cuts have had an impact on some areas of the

construction programmes and not on others. Chapter 2 showed that the numbers of

schemes have diminished substantially. Ramesh (2012) reported a decrease of 66,540

new build homes between 2007 and 2011, a reduction of approximately 40%. If the

interviewees were correct, this data supports the perceptions which pointed to a

reduction of between 50% and 60%.



Additionally, the spending cuts have made regeneration projects a non-viable

option for RPs. So much so, that in January 2012, the Mayor pledged to invest £177

million in capital grants to revitalize this sector that has been struggling since the

downturn. In total, 18 boroughs and 23 schemes were earmarked to receive this much

needed subsidy (GLA, 2012).

The literature and interviews tend to agree that governmental spending has not

impacted density and land availability.

6.6 Modern Method of Construction (MMC)

Research Question 7: What is the level of use of MMC and what has been its

impact on social housing?

In spite of what the literature and policy documents suggest, the interviewees

generally denied knowledge of or disputed the Challenge Fund requirement that 25% of

new build homes must be built using the MMC approach. One respondent suggested

that instead, the use of MMC was for the purpose of meeting CSH requirements.

Based on the interview responses, the following themes were identified around the

impact of MMC on social housing:

Lack of knowledge of MMC

No positive impact on design quality

No positive impact on efficiency

No positive impact on costs.

Some respondents admitted to a lack of knowledge about or experience with MMC.

A few interviewees reported extensive experience with this technique in affordable

housing. Still, all respondents agreed that MMC has not reduced costs and in some

cases have increased building costs. This seems to match the findings of the few

studies in the area ((POST, 2003; Windapo and Balogun, 2009)).

In terms of design, the respondents expressed scepticism. One predicted that MMC

buildings may not outlast traditional construction types. On the positive side, MMC was

reported to help speed of completion and reduce defects; however, care was suggested

in choosing products as errors might result in exorbitant maintenance costs.



Additionally, continued distrust over the use of MMC in construction has been

detrimental to its marketability. Limited raw data is available on MMC.

6.7 Concluding Remarks

In order to meet the aims and objectives of this thesis, interview responses were

analysed using content analysis. The results were presented under the headings of the

research questions that were listen in Chapters 1 and 4, and compared with the findings

of the literature review and quantitative data analyses.

The findings showed that the delivery chain for social housing was substantially

reduced in terms of number but not complexity, resulting in a lack of clarity about the

changing roles. This may have had a negative impact on efficiency.

Costs appear to have decreased since 2008, but this is not attributed to government

policy changes but to the recession, which has also seen a reduction in the number of

new build schemes and regeneration projects. Interviewees pressed for a return to the

capital grants and other incentives such as S106 to stimulate activity in the sector. They

also saw the increasing design and sustainability standards as carrying up building

costs and rents.

With regard to MMC, respondents agreed that there has been no obvious positive

impact on design quality, efficiency or costs.



Chapter 7 – Conclusion and Recommendations

7.1 Introduction

The intent of this thesis was to achieve the following aim:

“To explore the impact of government spending on the housing delivery chain and the social housing industry.” This aim has been achieved by a thorough exploration of the literature, supported by the implementation of both qualitative and quantitative data collection approaches and analyses. 7.2 Key Findings

The author will summarize how the main aim of this thesis was met, by

demonstrating how each objective was achieved. The author will also summarize and

discuss the main findings und each heading.

7.2.1 Objective 1 – 3; to investigate how the delivery structure has changed.

This objective was met through an in-depth review of the literature in the area,

and by conducting both qualitative data collection and quantitative data collection.

Qualitative data was collected through the use of interviews that were delivered and

responded to via email. Qualitative data was accessed from the BCIS online database,

analysed and presented in a graphical format. The results of the literature review were

summarized in Chapters 2 and 3.

The results of the literature review revealed a reduction in the number of

participating agencies and a change in roles. There seems to be a resultant complexity

and lack of clarity by the members about their respective roles. Additionally, the results

demonstrate no real impact of the delivery structure in increasing efficiency. This may

be the result of the role transition which may not yet be complete. The skills gap is said

to be responsible for poor decision making or no decision making within agencies. One

interviewee urged a wait and see approach through the teething period as the impact of

the changes may be witnessed later. Based on the quantitative data, the changes in the

supply chain do not appear to have an impact on completion time of projects, however



the quantitative analyses revealed a lowering in TPISH, suggesting a lowering of

costs in the sector.

7.2.2 Objective 4 – 6; to investigate how the government’s new policy affected

spending, design, provision and cost in social housing construction.

To achieve this objective extensive perusal of the literature was done and

summarized in Chapter 3. Also interviews were administered and analysed. The results

show considerable cuts in spending with a reduction in capital subsidies forcing HAs to

seek out sources of revenue income, via rents and borrowing. This has placed

restrictions on HAs and as such the sector is seeing an emergence of LAs as the main

providers of social housing.

In spite of the curtailed spending, design and sustainability standards have

increased. Additionally, theses standards have become mandatory in order to qualify for

grants. Meeting benchmarks results in extra-over costs. The potential for rising costs

and rents also increase as a result of rising land prices that is said to be driven by

competition among RSLs.

In spite of these factors actual building costs seem to be decreasing as

estimated by the tender price index. This is attributed to the recession and not changes

in government policy. Pessimism, lowered demand and limitations by lending agencies

are believed to have affected costs. Curtailed spending has also seen a reduction in

number of schemes and regeneration projects. As a response the Mayor of London has

injected £177 million to spark rehabilitation projects within London.

7.2.3 Objective 7; To determine the level of use of MMC and its impact in social

housing construction?

This objective was met through the literature review and interviews. According to

the literature, the Challenge Fund set a target that 25% of new build social dwellings

should be by MMC. According to the interviewees this target has been abandoned, and

the use of MMC is mainly for the purpose of meeting CSH standards.



Another finding was that MMC was not considered to be superior to traditional

methods in terms of design, cost, or efficiency. In fact, it was suggested that MMC was

the more costly of the two methods. These perceptions were supported in the literature.

7.3 Conclusions:

The changes in the delivery structure have not as yet resulted in better

efficiency of delivery of social housing.

Government has curtailed spending resulting in a reduction in social housing

provision and lowered costs related into lowered demand; however there

has been no resulting reduction in design standards.

MMC schemes do not seem to be meeting the target set by the Challenge

fund.

MMC does not seem to be more efficient that traditional methods.

MMC does not seem to have higher design standards than traditional

methods.

MMC does not seem to be less expensive than traditional methods.

There should be more incentives for research and development on this

particular method of construction to find innovative solutions for the industry.

7.4 Industry Recommendations

The author is of the opinion that efficiency of the supply chain can only improve with

increased clarity around the roles and purpose of the participating agencies. There

needs to be a clear signal to the stakeholders about how the government plans to

tackle the housing situation. A clear strategy is needed.

With regard to funding, most stakeholders agree that capital subsidy is preferable to

revenue subsidy in these times to stimulate the economy and to spark new build and

regeneration activity within the sector. Government land should be offered to RPs. Low

cost financing and underwriting sales risks can also be helpful.

If capital funding is unavailable then efforts by the government should be made to

encourage HAs to increase their capacity. HAs should be free to seek alternative types

of equity funding without penalty to remove the power the banks have over them.



To reduce MMC costs, economies of scale should be applied. There should also be

more incentives for research and development on this particular method of construction

to find innovative solutions for the industry.

7.5 Limitations of the Research This section will summarize the main limitations of this study.

First, time was a main limitation as it was found to be insufficient to carry out the

depth of primary and secondary research that was necessary to meet the aims and

objectives of the study.

Also, the selection of methodology which was found to be adequate based on the

literature was found in reality to be hindered by limitations such as unavailability of

literature sources such as governmental or archival policy documents and statistics

related to MMC. Additionally, collecting qualitative data was challenging as the

response rate was very low. This may have been related to time constraints on the part

of the potential interviewees, or perhaps a lack of knowledge about, or interest in the

topic. Additionally, none of those who provided initial responses gave answers to follow

up questions that were put forward by the author.

7.6 Further Study Recommendations.

This study suffered limitations related to the collection of qualitative and quantitative

data. It is suggested that the aims and objectives of this thesis may have been better

met by a longitudinal study that can follow projects from beginning to completion, and

that can gauge how the perspectives of respondents may or may not change over time.

With regard to supporting data, case studies of social housing schemes (new-build

traditional and MMC) should be conducted to compare costs, efficiency, duration,

standard, and life cycle of developments.



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http://www.parliament.uk/briefing-papers/POST-PN-209.pdf

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http://www.jrf.org.uk/sites/files/jrf/brownfield-residential-redevelopment-full.pdf



APPENDICES

APPENDIX A - INTERVIEW QUESTIONNAIRE FOR Quantity Suveyor, Housing

Association and Developer

“Examining the Impact of Government Spending on Social Housing Construction”

1. Can you tell me about yourself?

2. What is your recent role and professional experience?

3. Can you tell me about your company (Sector, Turnover)?

4. What kind/types of projects have you worked on in the last 5 years?

5. What are your current challenges as a housing association in the market?

6. Can you tell me your role as a housing association in delivery structure chain?

7. Has the role of the housing association in the delivery structure changed since


8. Has the recent changes in the delivery structure resulted in greater efficiency

and how?

9. With regard to meeting housing needs, can you tell me which funding and


10. Government spending reviews have constrained public funding for housing.



11. What is your response to the suggestion that government should spend less on

building and improving social housing and more supporting the delivery structure

chain?



12. In your experience, how has the reduced governmental spending affected the

company’s developments portfolio, i.e.:

Number of current and projected schemes,

Duration of construction projects.

Ratio of rehabilitation projects to new developments in social housing,

Density and space standards,


13. To improve design and construction quality, a set target of 25% of funding for




developments in your company.

14. Any other comments about the impact of government spending on the delivery of

social housing that you would like to add?

examining the impact of government spending on social housing construction

Documents

social housing delivery

social housing sector

social housing industry

housing supply

reduced government spending

government policy

coalition government

esbe page