Inventing our future Collective action for a sustainable economy

Regional Housing Strategy for the East of England: 2005–2010
5.18 In order to keep production costs down, the development of affordable housing should
normally be excluded from obligations of capital contribution to infrastructure
development. This should not be taken to imply that infrastructure costs should automatically be
passed on to commercial development of land for sale, since this itself might simply reduce the
level of planning gain available for subsidising affordable housing. The aim of the RHS is to
encourage decisions on the sharing of infrastructure costs which achieve appropriate balance
between private and public contributions, and, moreover, avoid the inefficiency of one public
source of funding subsidising another.
5.19 Where land for affordable housing is provided at nil cost as part of a s106 agreement,
this should normally be on ‘serviced‘ basis i.e. infrastructure costs are not indirectly
included in the scheme costs for which public capital subsidy is paid.
5.20 Construction costs: all developers of residential property will be seeking to reduce the costs of
creating their products. Every reasonable opportunity should be taken to enable them to do this,
consistent with the other objectives of the RHS. The RHS encourages all to consider the potential
for this using Modern Methods of Construction.
5.21 The Government is encouraging use of Modern Methods of Construction (MMC) to achieve a
step-change in the quantity and quality of housing we need, a policy derived from ‘Rethinking
Construction‘, the report of the Construction Task Force. The potential benefits include faster,
more reliable construction processes, improved quality control with fewer housing defects, and
reductions in energy use and waste. All of these point to a considerable potential to reduce
construction costs, although evidence suggests that this applies only in associations’ programmes
with the larger scale of operations referred to above.
5.22 Because of the economic, social and environmental benefits of MMC, the Government has
established initiatives to encourage its use, focusing on the social housing sector. In its 2004–06
investment programme, the Housing Corporation required at least one quarter of new houses to
be built using MMC. In the East of England 58% of the new housing schemes will be developed
using some form of MMC.
5.23 The Housing Corporation should continue to require housing associations to explore all
possibilities to use MMC to increase the cost-effectiveness, quality and reliability of
delivery of new affordable housing.
5.24 Developers of market housing should be encouraged also to pursue this principle.
5.25 This is an area that Inspire East, the Regional Centre of Excellence may be able to promote with
regional partners. It may also be possible to link into the local authority work on public service
excellence. New centres of procurement excellence have been established across the country, with
Norfolk County Council hosting the centre for the East of England.
5.26 Economies of scale: by creating a more robust framework for longer-term planning, the regional,
sub-regional and local strategies for housing and land-use planning are facilitating housing
development to be planned on a larger scale over a longer period. The resulting economies of
scale should enable procurement costs to be reduced, while also creating opportunities for
comprehensive development of new sustainable communities.
5.27 Further economies of scale can be created by building up a ‘pipeline‘ of strategically planned
development schemes, large or small, throughout the Region. This is possible if organisations are
willing to work in long-term partnerships.
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