黑洞社区

Happy hour

The next time the project team goes down to the pub, make sure your quantity surveyor buys the first round. QSs have a lot to celebrate 鈥� and plenty of cash. According to Mirza & Nacey Research鈥檚 latest survey, QS fees are at a stable level across most sectors, but the biggest news is that charge-out rates for surveyors have increased by as much as 50% for partners and 38% for sole principals.

Even those at the junior end of the scale have seen rises (an average of 20%). And there鈥檚 less regional divergence; an associate in Scotland now charges by the hour, on average, just 拢1 less than an associate in London.

It鈥檚 not that surveyors are taking more than their fair share of the project pie. QS fees as a percentage of total project value

for new-build are mainly unchanged since Mirza & Nacey鈥檚 previous survey, reported in 黑洞社区 on 11 October 2002. Only industrial new-build fees are noticeably up, as a percentage, compared with two years ago 鈥� and that鈥檚 only by a fraction, with fees on a 拢3m project now attracting 0.1% more. There has been a similarly small rise in fees charged for refurbishment work.

On a slight downer, the survey reveals new-build office and retail fees are lower by 1% on 拢1m projects, but most consultants are sanguine about the long-term prospects for these sectors.

The only hint of consternation on the horizon is the difficulty of finding consultants with enough experience to tackle complex projects 鈥� hence the significant rise in seniors鈥� charge-out rates.

Igor Rukuts, director at QS and project manager Northcroft, says the firm needs more staff. 鈥淩ecruiting graduates isn鈥檛 too much of a problem but finding good people with more than five years鈥� experience can be a real challenge 鈥� and when you find the right people you need to reward them appropriately,鈥� he says.

So why aren鈥檛 the factors that have led to increases in charge-out rates also affecting fee levels? For Mark van den Berg, chairman of Northcroft, the answer lies in increasing productivity levels. 鈥淪urveyors are offering a diverse range of services from cost consultancy to risk assessment, while our use of IT is continuously improving,鈥� he says, 鈥淭he net result of all this is we are getting more and more efficient at what we do.鈥�

Another factor keeping fees stable is competition. As Vincent Clancy, managing director of cost consultancy at Turner & Townsend, explains, 鈥淔or one-off projects, usually in the private sector, it is sometimes possible to charge a higher fee, but in the public sector where there is a huge volume of work there is also intense competition. Companies tend to differentiate themselves by the services they offer rather than by varying fees.鈥�

But there is one public sector where fees have very slightly increased (admittedly by just a few points of 1%) and that鈥檚 housing. Graham Matthews, head of public sector at EC Harris, says surveyors鈥� services are increasingly in demand in this sector. 鈥淚ncreasing the supply of affordable housing has become a major challenge, and housing associations alone can鈥檛 supply enough. Local authorities are pushing hard for private developers to provide affordable housing as part of their schemes. It鈥檚 a totally new ball game for them, so we鈥檙e being asked to fill the gap.鈥�

Though fee levels haven鈥檛 increased in the health and education sectors, consultants say the volume of work is continuing to rise. After a delayed start of over a year, the government鈥檚 拢5bn Schools for the Future building programme should begin in spring 2005. And EC Harris鈥� Matthews says the health sector is undergoing major structural changes that mean demand remains high for consultancy work in this sector. 鈥淭he health sector is moving away from 25-year long PFI hospital deals that are set in stone. It鈥檚 favouring a more flexible approach where private companies work with primary care trusts and GPs to provide specialist healthcare centres or GP surgeries that also carry out minor surgery. This is creating demand for a new generation of health buildings.鈥� And the demand for surveyors is following suit.

Consultants are also bullish about the commercial sector鈥檚 prospects. Northcroft鈥檚 Rukuts says he can appreciate why the survey found that fees in the office and retail sector were lower than in 2002, but believes the tide is changing. 鈥淚f you asked me two years ago, I鈥檇 have said the commercial market wasn鈥檛 growing. But confidence is picking up, financial institutions are busy relocating and firms are looking for office space. We鈥檙e confident the market is set for a period of growth.鈥�

Likewise, retail also appears to be a growth market. Tony Burton, senior partner at Gardiner & Theobald, says the number of large, retail-led regeneration schemes around the UK is spurring demand for consultants. 鈥淢assive regeneration schemes like New Wembley in north-west London and Spinningfields in Manchester are boosting the retail construction market. These are super-big, long-term projects. And, of course, the larger the project the more attractive the returns. So I鈥檇 say this sector鈥檚 future looks positive.鈥�

So the consultants鈥� consensus is clear; the next few years should be happy ones for quantity surveyors of all sectors. But there are a few catches: the recruitment headache will linger and no matter how much work is available fee percentages are likely to remain the same. As Burton points out, 鈥淵ou can鈥檛 just turn fees up and down like a flame. It鈥檚 not that simple.鈥�