Consultancy Survey: Fees

The planning market remains competitive but there are signs of better fee income prospects, Bryan Johnston reports.

Development finance may be in short supply and public spending cuts are certainly having an impact, but this year's survey findings suggest that revenues for consultants will improve over the months ahead.

Of the 103 firms offering 2012/13 forecasts for their fee income, 70 predicted a rise of at least five per cent, three a smaller hike and 21 no change. Only nine - including six sole traders - anticipated a fall. It also appears that bills are being paid faster: only half of this year's respondents cited late payments as a major issue, against almost two-thirds in 2011.

In 2010/11, half of the 20 highest earners in the sector saw their planning earnings fall. In 2011/12, 14 of them recorded a rise. All but one of the 13 top 20 earners to offer predictions on how their income will change in the current financial year reckon it will grow, by between five and 30 per cent.

The ten top earners brought in £257 million from their planning work last year, against £243 million in 2010/11 and £249 million the year before. Comparing like with like, the 61 firms reporting fee income in both the 2011 and 2012 surveys showed a collective increase of almost £20 million, to £368 million in 2011/12. The same calculation last year showed a £9 million drop.


High earning UK planning consultancies 2011/12 (PDF)

Fee income by specialist area (PDF)

Out of 85 firms disclosing fee rates this year, 44 are charging at least £1,000 a day for their most senior planning experts' time. Even for junior fee earners, 25 firms are quoting a minimum of £500 a day, and none of the rest charge less than £225.

Based on responses from 143 firms on changes in fee rates, consultants appear slightly more confident about testing what the market will bear. While 33 of these consultancies raised their daily rates in 2011/12, 49 expect to do so this year, of which 15 are looking at a rise of at least ten per cent. But almost two-thirds of respondents are pegging their rates for the time being.

Despite low completion rates and a mortgage famine, several consultants detect life in the residential and mixed-use sectors as developers and landowners plan for an eventual upturn. "A lot of developers are seeking permission for unallocated sites for 100 to 400 homes. We are using our economic expertise to show why they should go ahead," says Peter Brett Associates partner Nora Galley.

"Housebuilders remain cautious, but there has been a rise in activity since the National Planning Policy Framework (NPPF) came out in March, because it has provided some certainty," says Boyer Planning director Andrew Williams. "But they are only looking at good sites in good locations."

Pegasus Planning Group director Mervyn Dobson says the sector is targeting areas facing a five-year housing land shortfall and pursuing appeals on that basis. "Some developers are focusing on small sites in hot spots, especially in the south, where they know they can sell homes. Others are putting larger schemes together looking two or three years ahead. They see the NPPF as a source of support," he says.

GL Hearn head of planning, development and regeneration Alastair Crowdy sees a resurgence of work on retail and town centre projects. "Councils are dusting off central area projects that have been quiet for a while. Investor clients are looking at opportunities to enhance the value of their assets and ways to protect them against new developments," he says.

Most major players are looking at getting more involved in major infrastructure projects. At URS Infrastructure & Environment UK, which is working on the High Speed 2 rail link and EDF Energy's Sizewell C nuclear project, technical director Martin Herbert sees further openings in planned upgrades to London's rail system and in energy from waste, despite a recent string of approvals for major plants.

On the energy side, SLR Consulting technical director David Sandbrook singles out upgrades to grid connections as one area where business is expanding. Sandbrook says his augmented masterplanning team is helping the firm diversify into new areas, including mixed-use projects on former minerals workings and industrial sites.

AMEC director Clive Harridge highlights growth in environmental work associated with major infrastructure schemes on public sector sites, as well as a continuing stream of local plan sustainability appraisals and strategic environmental assessment work on the government's proposals to abolish regional strategies. He adds: "Landowners are beginning to engage with the planning process again. They have some confidence in the medium term and want to put consents in place to start development when the time is right."

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