Liverpool City Region has been selected as the first pilot location for a £85 million national programme aimed at transforming construction productivity and delivery methods across the UK. The Industrialising and Digitalising Construction Challenge will trial manufacturing-led and digitally coordinated approaches to housing and public infrastructure, with outcomes expected to inform a scalable national delivery model.
Funded through the UK Research and Innovation (UKRI) R&D Missions Accelerator Programme (R&D MAP), the initiative will be delivered in partnership with the Liverpool City Region Combined Authority and the High Value Manufacturing Catapult. The programme represents the largest intervention within the R&D MAP Growth Mission and is designed to support the UK Government’s objective of accelerating construction delivery while improving efficiency in a sector valued at more than £250 billion annually.
Focus on digitalisation and manufacturing-led delivery
The pilot will deploy industrialised construction methods, including standardised kits of parts, enhanced digital coordination and manufacturing-based processes. These methods will be tested on two live social housing schemes led by Onward Homes and Torus Developments, providing a controlled environment to evaluate repeatable and scalable delivery models.
The findings from these schemes will contribute to the development of a standardised national framework, with potential application across a broader range of publicly funded assets, including schools, hospitals and prisons. The approach is also expected to support the government’s target of delivering 1.5 million new homes.
Addressing productivity gaps and economic potential
A central driver of the programme is the UK construction sector’s productivity gap, currently estimated at approximately 23% below the UK national average. Analysis associated with the initiative indicates that narrowing this gap could generate up to £27 billion in additional economic output over time and support up to 380,000 new jobs.
The programme aims to improve build times, reduce material waste, enhance cost predictability on publicly funded projects, and strengthen sustainability and energy efficiency outcomes. It also seeks to reinforce domestic supply chains and support the creation of higher-skilled employment.
Steve Rotheram, Mayor of the Liverpool City Region, said: Having started my own career as a bricklayer, I understand first-hand the pressures facing the construction sector. But to deliver on the government’s mission to get Britain building again, it needs to adapt with the times.
He added: If we get this right, we won’t just build the next generation of affordable social housing, schools and hospitals – we’ll strengthen UK supply chains, boost productivity, and give manufacturers the confidence to invest in skills and capacity, helping to create good jobs, and drive growth across the country.
Policy alignment and regulatory integration
The challenge is aligned with key government frameworks, including the Construction Playbook, the 10 Year Infrastructure Strategy and Pipeline, and the Transforming Infrastructure Performance Roadmap to 2030. It is intended to address structural inefficiencies caused by fragmented incentives, data silos and inconsistent project pipelines.
By introducing shared standards, coordinated demand signals and integrated delivery models, the programme aims to create a more predictable and efficient construction ecosystem. It also supports the development of domestic manufacturing capability through increased investment in skills and technology.
UK Science Minister Lord Vallance said: The digital technologies and manufacturing methods developed here will help us speed up how we can build more homes, schools, and hospitals right across the UK.
Melissa Zanocco OBE, UKRI Challenge Director: Growth Mission, said: Industry transformation cannot happen through isolated adoption alone, the Industrialising and Digitalising Construction Challenge will drive integration across the sector by aligning demand, standards and delivery models.
Industry collaboration and delivery framework
The High Value Manufacturing Catapult will act as the delivery partner, bringing together manufacturers, digital specialists, housing providers and public-sector clients to establish the standards, tools and commercial frameworks required for long-term sector transformation.
Katherine Bennett, CEO of the High Value Manufacturing Catapult, said: By bringing together manufacturers, housing providers and public clients around shared standards and clearer demand signals, we can give industry the confidence to invest and expand capacity.
The programme also includes plans for an Accelerator Centre focused on product testing, workforce training and supply chain development, supporting the transition to industrialised construction at scale.
Strategic implications for the construction sector
Construction currently accounts for approximately 6.2% of the UK economy and 6% of the workforce, yet productivity remains significantly below the national average. Evidence from platform-based construction approaches suggests potential returns of around £25 for every £1 invested through improved productivity, reduced waste and stronger supply chain integration.
The Liverpool pilot will generate critical data on the scalability of industrialised and digitally enabled construction methods. These insights will inform future regional rollouts and broader adoption across housing and public infrastructure, positioning the programme as a key step in modernising the UK construction sector.
