Publication - Factsheet

Offsite construction and the Affordable Housing Supply Programme

Published: 12 Oct 2021

A note setting out current thinking about offsite construction for the delivery of new homes through the Affordable Housing Supply Programme.

Offsite construction and the Affordable Housing Supply Programme
Industry implications

There is currently a very small number of major manufacturers of closed panel systems in Scotland – although we are aware of other existing manufacturers that are considering investment in more advanced closed panel systems.  This is a significant risk given that there is generally already seen to be a limited market available to councils and Registered Social Landlords.  Equally, there is concern of an approach that could lead to more vertical integration of supply, resulting in a small number of large providers to the exclusion of SME contractors and more remote locations.  None of these outcomes are desirable and we are keen to work with industry to achieve an effective market which brings benefits and opportunities for the whole of Scotland.

It has become clear that if we wish industry to invest in more advanced panelised systems (and more productive, digital and automated plant) then we will need to be able to demonstrate that there is a clear and reliable development pipeline to justify their investment.  Programme for Government notes that the Scottish Government will deliver 110,000 affordable homes across Scotland by 2032, and this is a very positive platform upon which to build.  However, to provide the assurance needed by industry, that potential pipeline needs to be made more visible, real and tangible.  The Scottish Government will continue to work with both demand and supply side partners to understand the best way of achieving this and to ensure that the opportunities flowing from the 110,000 affordable homes’ programme are not lost.

As stated above, the Scottish Government is currently working with partners to address the issues covered in this advice note.  Later this year we will publish a strategy setting out how we see the necessary changes being made, the associated risks and benefits, and how partners can work together to achieve the best possible outcome for people who need good quality affordable homes, in successful communities that meet our environmental ambitions.