Consultancy survey: Introduction

Despite some positive signals, planning consultancies are in two minds about which way the sector will shape up in 2012, Bryan Johnston finds.

Three years after the UK economy went into a tailspin, market signals for planning consultants remain mixed. The European currency crisis, the lack of finance available to councils, developers and home buyers, and the government's planning reforms are just some of the factors industry experts need to weigh up in assessing business prospects for the year ahead.

Our 15th annual Planning Consultancy Survey points to general concern about the economy, a slight drop in earnings and doubts about the viability of increasing fees next year. On a more positive note, 42 per cent of firms believe they will start expanding their teams over the next 12 months, compared to 24 per cent who foresee no such growth.

Chart: growth and decline in planning markets

Chart: market value


The survey was conducted for Planning during October by communications consultancy Camargue Group. Questions covered staffing and fee levels, estimates of growth or decline in key market sectors and views on a set of 20 current practice issues. In all, 153 firms responded to the survey - 26 fewer than in 2010.

Based on responses from 116 of these firms, the findings suggest that only 24 per cent of consultancies expect the economic climate for development to improve over the next 12 months. Another 31 per cent think conditions will deteriorate, with 45 per cent unsure either way. But more than 70 per cent agreed that planning reform will lead to a substantial increase in appeals over the next two years, inevitably boosting consultants' income.

Predictions for individual market sectors, based on averages of each firms' estimates, varied widely. Encouragingly, only five sectors - health and education facilities, regional and national-scale planning, and outdoor advertising - are expected to fall in value in 2011/12. Modest rises of one to five per cent are anticipated in all the main development sectors. Consultants say the biggest growth areas will be heritage conservation, albeit from a modest base, and energy planning, where an 11 per cent hike is forecast.

Detailed breakdowns provided by 59 firms allowed us to assess the relative size of each market and estimate the cash value of growth or decline within them (see graphic). It is important to note that the £286,518,000 figure shown is a long way from reflecting the full value of the planning market.

In the first place, another 28 firms indicated planning earnings without disaggregating them by market sector. Their aggregated incomes take total fees to £371,650,000. Beyond that, the remaining 66 respondents - including several major players - disclosed no fee information. Widening the circle further, there was no response from another 320 firms listed in the Guide to Planning Consultants 2011/12, although many of these are small operations.

So what will it take to get planning consultancies back on a growth curve? Industry leaders accept that the degree of confidence in the economy is the key factor. "Much will also depend on messages from government about the need for communities to deliver development," says Ian Tant, senior partner at leading employer Barton Willmore. "The mood has been much more optimistic since the Budget and the Planning for Growth statement in March."

Simon Slatford, operational director at the London planning division of highest earner RPS Group, says: "Clearly the economic situation in Europe and uncertainty in the planning system are having an impact on development and infrastructure. Both need to be resolved to provide some certainty for developers. However, we are seeing positive signs in infrastructure and energy. The government drive for sustainable development is a major opportunity, as we can provide planning guidance and complementary services needed to demonstrate that development is sustainable."

Availability of finance and ongoing uncertainty in the Eurozone are the key factors influencing the market, says Nathaniel Lichfield & Partners managing director Jim Fennell. "If the government keeps its bottle on maintaining the National Planning Policy Framework largely as per the draft, the development industry will take great confidence," he says. "There are many opportunities as long as wider economic factors don't stifle growth."

Click the images below to view full-size versions.

Table: changing fortunes

Market value

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