Consultancy Survey - A static market?

For many planning consultancies, the past year has again seen record takings. Aggregate earnings among the 114 firms providing fee income data for this year's survey amounted to £545 million, some £80 million more than last year's total.

Sixty-three companies recorded a seven-figure planning fee income in 2007-08, five more firms than last year and three times as many as 1998. Eighteen of those topped £10 million. Overall, consultants estimate that the market for their services grew by 11 per cent last year, well down on the previous year's 20 per cent figure.

By September, clear signs of recession had driven consultants' estimates of market growth down to a mere four per cent from the high point of 17 per cent predicted in 2005. Last month's global financial crisis caused further despondency, with four-fifths of leading firms contacted this month admitting lower expectations.

Consultants expect their own practices to outstrip market performance. In September, their expectations of fee income increases in 2008-09 averaged out at 7.5 per cent, down from 12 per cent last year and 20 per cent three years ago. The number of firms predicting a hike of at least 20 per cent is down from 20 last year to seven, and 16 firms saw no increase or an actual drop.

Most consultants envisage no increase in fee rates at present. Only two firms anticipate raising charge-out rates by as much as ten per cent during the current financial year, against nine last year. "We expected things to be tough for clients so we did not increase our rates last year and we will not this year," says Pegasus Planning Group partner Mervyn Dobson.

There is greater pressure than ever on consultants to offer discounts. More work is being won through tender or panel appointments, set fees are favoured ahead of time-based charges and premium rates are disappearing fast. Yet John Rhodes at RPS Group's London office finds that rates are holding up. "Planning remains a relatively small cost against the value of property development and a planning permission," he notes.

How long the downturn will last is the $64,000 question. "It depends on the economy. A substantial reduction in interest rates might start to stimulate activity," says DPP senior partner Richard Flack. "I still see a pipeline of work nine months ahead and it has not reduced over the past year. I am cautious, but our predicted level of growth is being achieved so far."

BDP director Francis Glare sounds a gloomier note. "We would not anticipate any growth in the market over the next 12 months," he says. "There will be increasing pressure on fees because clients believe that they are in a stronger position to negotiate. But there will be winners and losers."

Some consultants predict a drop in demand for planning services this year. "We are not immune from the upheaval in the financial sector and this is likely to impact on planning services in the public and private sectors," argues Atkins director Paul White. "It has not happened yet but there will be downward pressure on fee rates."

Hunter Page partner Paul Fong anticipates a drop of five to ten per cent. "It is difficult to see overall growth in the consultancy market in current conditions," says Jones Lang LaSalle associate director Clare Malcomson. "I cannot see that anyone out there is looking at growth next year. Most will be happy to stabilise," adds Taylor Young Ltd managing director Stephen Gleave.

King Sturge partner Philip Robin expects the market to be static at best this year and fears that it is more likely to contract. But he adds: "Delays on local development frameworks might provide work opportunities in a more difficult market. There is still demand from councils as well as property owners and occupiers. The community infrastructure levy is another area where more planning consultancy advice is needed."

CgMs Ltd director John Stockdale says: "The continuing stream of planning reform provides an opportunity for all consultants." Nathaniel Lichfield and Partners managing director James Fennell cites similar openings. "The broadening out of traditional land-use planning to embrace a wider range of spatial planning consideration is presenting new areas of work," he observes.

"As an industry we are justified in being optimistic about our prospects in the medium to long term, but no-one should delude themselves about short-term trading conditions," advises Roger Hepher, head of planning and regeneration at Savills. "New projects are tending to take root slowly, with clients biding their time until economic conditions settle down."

Andrew Martin, principal at Andrew Martin Associates, notes: "Clearly a firm that relies heavily on residential applications will see reduced growth and probably contraction. Businesses such as ours with a high level of long-term strategic work, regeneration projects, project management and complex mixed-use applications can still attain growth of four per cent plus."

Cristina Howick, a partner at Roger Tym & Partners, agrees that some areas of work are less affected than others. "Developers want to continue working on large, complex schemes even if they won't be implemented for some time," she finds.

DLP Consulting Group managing director Simon James remains optimistic. "We have a very wide spread of work across all aspects of planning, design, transport and sustainability engineering," he explains. "Although we have seen drops in certain areas, others have grown. But we are looking very seriously at costs and have slowed recruitment."

DTZ national head of planning Graeme Tulley says his team's business is holding up well. "However, the downturn is having an impact," he concedes. "While many consultants may still be working out existing projects, future prospects are less rosy. The market will do well to hold its own next year. But there is an old adage that a downturn brings a 'flight to quality' as funding decisions for clients become ever more critical."

Drivers Jonas's strengthened London planning team is forecasting year-on-year growth in turnover of around 20 per cent. "We don't think that four per cent is over-optimistic" says head of national planning Giulia Bunting. "Our regional teams are not seeing such high levels of growth, although our Midlands business is experiencing unprecedented demand for its advice services."

Jacobs expects to maintain its growth trajectory, albeit with a more cautious approach. "We are sticking to our 15 per cent growth estimate," says head of planning and development Simon Witney. "We exceeded growth targets last year and are not over-exposed to failing sectors."

Several experts say multidisciplinary firms are more likely to do well. "Pure planning consultancies have fewer opportunities for cross-selling. A multi-skilled practice has many potential sources of work in other parts of the firm," says Bidwells partner Andrew Blackwell. White Young Green Planning managing director John Whittaker adds: "If one part of the business is working for a client it can produce spin-off work for other areas."

One aspect of the downturn is certainly good news for consultants. Many developers and landowners are exploring alternatives for schemes that now look to be on shaky ground financially. "We have private sector schemes going back for new permissions because previous proposals are no longer viable. The current climate can sometimes generate change faster than we have seen recently," suggests Howick.

Savills is also active in revising existing consents and planning gain terms. "Many of the schemes granted permission in recent times will not be appropriate for recessionary and post-recessionary conditions and will need to be renegotiated. We are also seeing some investors moving in and acquiring land cheaply and then working up the planning position," says Hepher.

"While the level of new development will decline, we are being asked for strategic advice on alternative use valuations and portfolios of distressed assets," reveals CB Richard Ellis head of planning Stuart Robinson. "This is likely to increase as the downturn continues. We are also involved in several major long-term projects that are less affected by short-term market changes."

Malcomson reports that the banking sector's need for planning advice on distressed lending portfolios is the rationale for Jones Lang LaSalle's recently launched debt solutions group. "We are working with our corporate finance and capital markets teams to provide due diligence ahead of offers to purchase and advising on the long-term position of assets," she explains.

Fennell sees further growth in "corporate recovery". This involves helping liquidators realise value for creditors of insolvent businesses or advising firms in trouble where land and property might play a part in financial restructuring. Barton Willmore senior partner Ian Tant also sees opportunities to help hard-pressed funds and mortgagees put property assets into good order for when the upturn arrives.

HIGH-EARNING UK PLANNING CONSULTANCIES 2007-08

KEY:
(A) Chartered planners (3)
(B) Fee-earners (4)
(C) Predicted change (5)

Rank Fee income (pounds)
08 07 Consultancy 2007-08(1) 2006-07(2) (A) (B) (C)

1 1 RPS Group plc 73,240,000 63,609,000 141 626
2 3 Arup 31,000,000 25,700,000 47 474
3 4 Barton Willmore 23,500,000 20,200,000 138 230 0%
4 2 Atkins Planning 23,000,000 40,000,000 53 380 15%
5 5 GVA Grimley 22,400,000 19,700,000 98 168 2%
6 9 Jacobs 20,400,000 15,900,000 35 210 15%
7 7 Turley Associates 19,377,000 16,567,000 127 171
8 11 Halcrow Group Ltd 19,200,000 14,100,000 42 380 5%
9 10 Drivers Jonas 18,600,000 15,500,000 85 105 15%
10 6 Scott Wilson 17,600,000 16,700,000 65 430 3%
11 13 Nathaniel Lichfield
and Partners 16,500,000 13,800,000 94 140
12 8 Savills 16,400,000 16,300,000 115 191 20%
13 12 White Young Green 14,300,000 14,000,000 67 139 10%
14 14 Pegasus Planning
Group 12,800,000 11,000,000 65 125 0%
15 Capita Symonds Ltd 12,700,000 176 10%
16 15 DPP 12,500,000 10,616,000 83 124 5%
=17 23 DTZ 11,700,000 5,900,000 44 86 10%
=17 16 Terence O'Rourke 11,700,000 10,300,000 34 80 10%
19 28 SLR Consulting 9,950,000 3,900,000 9 22 19%
20 17 Entec UK Ltd 8,980,000 7,300,000 42 203 12%
21 18 Atisreal Ltd 7,600,000 6,900,000 27 35 7.5%
22 21 CB Richard Ellis
Planning 7,527,000 6,211,000 48 51 10%
=23 22 CgMs Ltd 7,000,000 6,000,000 58 77 10%
=23 20 GL Hearn 7,000,000 6,300,000 36 49 15%
25 19 David Lock
Associates 6,900,000 6,600,000 27 60 5%
26 Indigo Planning
Ltd 6,660,000 42 63 10%
27 Tribal 5,900,000 27 63 5%
28 26 Roger Tym &
Partners 5,600,000 4,505,000 26 54 15%
29 27 DLP Consulting
Group 5,500,000 4,200,000 21 52 17.5%
30 24 ERM 5,100,000 4,900,000 10 50 4%
31 35 Taylor Young Ltd 4,376,000 2,640,000 22 51 -10%
32 25 King Sturge 4,100,000 4,573,000 25 37 5%
33 Andrew Martin
Associates 4,051,000 18 31 10%
34 31 Enviros Consulting 3,900,000 3,550,000 6 37 10%
35 29 Land Use
Consultants 3,812,000 3,760,000 5 46 4%
36 33 Spawforths 3,173,000 2,824,000 17 41 5%
37 34 Rapleys 3,040,000 2,770,000 17 25 13%
38 32 DPDS Consulting
Group 3,000,000 3,000,000 15 22 7%
39 36 Tetlow King Group 2,850,000 2,550,000 8 26 10%
40 =40 Colliers CRE 2,700,000 1,850,000 15 23 -15%
41 37 Planning
Perspectives 2,450,000 2,300,000 7 19 10%
42 42 Alliance Planning 2,430,000 1,700,000 15 19 10%
43 38 Hyder Consulting
(UK) Ltd 2,380,000 2,250,000 12 35 5%
44 39 Boyer Planning Ltd 2,320,000 2,030,000 9 14 0%
45 44 Adams Hendry
Consulting Ltd 2,008,000 1,650,000 16 21 9%
46 =47 Colin Buchanan 1,816,000 1,500,000 7 25
47 46 London Planning
Practice 1,810,000 1,508,000 5 14 10%
=48 71 Amec Earth &
Environmental 1,800,000 425,000 4 10 10%
=48 49 Peacock & Smith 1,800,000 1,459,000 13 13 5%
50 =47 Emery Planning
Partnership Ltd 1,730,000 1,500,000 12 18 5%
51 =51 Vail Williams 1,675,000 1,300,000 6 11 12%
52 45 BDP 1,660,000 1,540,000 18 19 5%
53 Pro Vision Planning 1,510,000 6 9 5%
54 =51 DMH Stallard 1,500,000 1,300,000 5 21 0%
55 50 Ward Hadaway 1,462,000 1,303,000 4 10
56 PFA Consulting Ltd 1,450,000 1 16 2%
=57 Hives Planning Ltd 1,400,000 7 9 0%
=57 57 WA Fairhurst &
Partners 1,400,000 1,100,000 8 32 15%
=59 43 Lennon Planning 1,300,000 1,685,000 9 10
=59 56 Scott Brownrigg 1,300,000 1,150,000 10 14 15%
61 54 Metropolis Planning
and Design 1,262,000 1,173,000 5 8 0%
62 64 HLL Humberts
Leisure 1,200,000 640,000 5 10 4%
63 55 Cluttons 1,061,000 1,151,000 7 14 10%
64 =61 Stride Treglown Ltd 1,004,000 705,000 4 9 -25%
65 Smith Stuart
Reynolds 1,000,000 7 13 0%
66 Robinson Escott
Planning 990,000 5 7 10%
67 59 Vincent and Gorbing 930,000 900,000 8 8 2%
68 Cass Associates 836,000 3 4 2.5%
69 =65 Steven Abbott
Associates 784,000 600,000 6 7 20%
70 63 Smiths Gore 714,000 667,000 5 8 29.5%
71 Alder King Planning
Consultants 700,000 8 9 15%
72 =61 Matrix Partnership 667,000 705,000 2 10 7%
=73 DKS Architects 600,000 4 4 40%
=73 =65 DNS Stuart 600,000 600,000 2 7 5%
75 67 CDN Planning 575,000 552,000 7 7 5%
76 68 D&M Planning
Partnership 504,000 550,000 8 8 10%
=77 Iceni Projects 500,000 4 6
=77 Wardell Armstrong 500,000 5 5 10%
79 69 Harmers Ltd 446,000 456,000 6 6 -15%
=80 ESA Planning 400,000 3 4 20%
=80 =75 John Martin &
Associates 400,000 350,000 5 9 10%
82 72 Halletec Associates 380,000 415,000 1 10 -15%
83 78 Paul Butler
Associates 370,000 308,000 4 6 -15%
84 79 ASP 343,000 303,000 1 5 15%
=85 =84 Mineral Planning
Group 320,000 250,000 2 2
=85 82 Stoneleigh Planning 320,000 280,000 2 3 6%
87 81 Landmark Planning
Ltd 310,000 290,000 4 5 10%
=88 80 Derek Halden
Consultancy 300,000 300,000 1 1
=88 =84 Land & Mineral
Management 300,000 250,000 2 5
=88 Washbourne
Greenwood 300,000 3 5 40%
91 83 Woods Hardwick
Planning 291,000 263,000 2 3 5%
92 Cundall 275,000 4 5 10%
93 Fisher German 250,000 2 3 10%
94 88 Willis & Co 220,000 221,000 2 2 0%
95 DGG Planning 216,000 2 2
96 UE Associates 200,000 0 125%
97 Star Planning and
Development 175,000 1 1 -60%
=98 PRP Planning 170,000 5 6 50%
=98 93 Robin Bretherick
Associates 170,000 130,000 2 2 -15%
100 92 MBM Planning &
Development 160,500 141,000 1 1
101 Ross Planning 160,000 2 3 10%

FOOTNOTES:
(1) Planning fee income in year ending 31 March 2008
(2) Planning fee income in year ending 31 March 2007
(3) RTPI corporate members at 1 September 2008
(4) Members of planning staff whose time can be billed to clients at 1
September 2008
(5) Predicted change in planning fee income between years ending 31
March 2008 and 31 March 2009


CENTRAL GOVERNMENT
Rank Consultancy Fee income
2008 2007-08
pounds

1 RPS Group plc 10,460,000
2 Atkins Planning 9,000,000
3 Halcrow Group Ltd 6,900,000
4 Drivers Jonas 4,200,000
5 Scott Wilson 2,650,000
6 Entec UK Ltd 1,790,000
7 GVA Grimley 1,750,000
8 Roger Tym & Partners 1,300,000
9 ERM 1,250,000
10 Enviros Consulting 800,000
11 Land Use Consultants 785,000
12 CgMs Ltd 700,000
=11 Taylor Young Ltd 500,000
=11 White Young Green Planning 500,000
15 ERM 490,000
16 Broadway Malyan Planning 450,000
17 Colin Buchanan 150,000
18 WA Fairhurst & Partners 96,000
19 Savills Hepher Dixon 80,000
20 John Silvester Associates 56,520


SOLE PRACTITIONERS
Rank Consultancy Fee income
2008 2007-08
pounds

1 Derek Halden Consultancy 300,000
2 Star Planning and Development 175,000
3 MBM Planning & Development 160,500
4 John Silvester Associates 158,000
5 MT Town Planning 150,000
6 Doyle Town Planning 145,000
7 Leigh & Glennie 110,000
8 Green Balance 99,000
9 Anton Lang Planning Services 85,000
10 HG Planning 69,000


LOCAL GOVERNMENT
Rank Consultancy Fee income
2008 2007-08
pounds

1 Atkins Planning 11,000,000
2 Halcrow Group Ltd 5,600,000
3 Scott Wilson 4,911,000
4 GVA Grimley 3,500,000
5 RPS Group plc 3,490,000
6 Drivers Jonas 2,500,000
7 Tribal 2,250,000
8 CB Richard Ellis Planning 1,900,000
9 Nathaniel Lichfield and Partners 1,800,000
10 Entec UK Ltd 1,610,000
=11 Savills 1,400,000
=11 Taylor Young Ltd 1,400,000
13 Roger Tym & Partners 1,300,000
14 Hyder Consulting (UK) Ltd 1,125,000
=15 Atisreal Ltd 1,000,000
=15 ERM 1,000,000
=15 White Young Green 1,000,000
18 David Lock Associates 800,000
=19 Colliers CRE 750,000
=19 SLR Consulting 750,000
21 DPP 625,000
22 Vincent and Gorbing 600,000
=23 Adams Hendry Consulting Ltd 500,000
=23 Barton Willmore 500,000
=25 Enviros Consulting 400,000
=25 Matrix Partnership 400,000
=27 DLP Consulting Group 350,000
=27 GL Hearn 350,000
29 WA Fairhurst & Partners 230,000
=30 Alliance Planning 200,000
=30 HLL Humberts Leisure 200,000
=30 Tetlow King Group 200,000


PLANNING FEE-EARNING CAPACITY 2008

KEY:
(A) Fee earners 2008 (1)
(B) Fee earners 2007 (2)
(C) Total planning staff (3)
(D) Highest daily rate (4) (pounds)
(E) Lowest daily rate (5) (pounds)
(F) Rates increase 2007-08 (6) (%)
(G) Rates increase 2008-09 (7) (%)
(H) Fee income 2007-08 (8) (pounds)

Rank Consultancy (A) (B) (C) (D) (E) (F) (G) (H)
08 07

1 1 RPS Group plc 626 553 733 73,240,000
2 4 Arup 474 416 545 31,000,000
3 3 Scott Wilson 430 429 440 1,600 300 7 5 17,600,000
=4 2 Atkins Planning 380 528 390 1,300 350 7.5 7.5 23,000,000
=4 5 Halcrow Group Ltd 380 330 410 19,200,000
6 6 Barton Willmore 230 229 304 1,950 630 5 5 23,500,000
7 7 Jacobs 210 175 210 0 5 20,400,000
8 8 Entec UK Ltd 203 173 213 8,980,000
9 9 Savills 191 157 228 16,400,000
10 Capita Symonds Ltd 176 238 12,700,000
11 10 Turley Associates 171 154 217 19,377,000
12 11 GVA Grimley 168 152 195 22,400,000
13 13 Nathaniel
Lichfield and
Partners 140 130 178 16,500,000
14 12 White Young Green 139 136 164 14,300,000
15 24 Pegasus Planning
Group 125 49 125 0 0 12,800,000
16 14 DPP 124 108 163 12,500,000
17 15 Drivers Jonas 105 96 112 18,600,000
18 16 EDAW Ltd 94 99 2,000 300
19 17 DTZ 86 74 96 11,700,000
20 =21 CgMs Ltd 77 51 87 1,750 500 5 5 7,000,000
=21 Indigo Planning
Ltd 63 81 6,600,000
=21 Tribal 63 71 5,900,000
23 19 David Lock
Associates 60 59 72 575 3.7 5 6,900,000
24 18 Roger Tym &
Partners 54 60 73 1,100 350 7 7 5,600,000
25 =37 DLP Consulting
Group 52 27 60 0 0 5,500,000
=26 =27 Bidwells 51 44 67
=26 =27 CB Richard Ellis
Planning 51 44 60 2,100 595 0 0 7,527,000
=26 =21 Taylor Young Ltd 51 51 82 5 0 4,376,000
29 23 ERM 50 50 72 1,400 650 6 3 5,100,000
30 25 GL Hearn 49 46 63 1,500 863 5 5 7,000,000
31 20 Terence O'Rourke 48 55 74 11,700,000
32 26 Land Use
Consultants 46 45 48 892 304 5 4 3,812,000
33 29 Spawforths 41 41 55 1,463 6 5 3,173,000
=34 36 Enviros
Consulting 37 28 40 850 400 5 5 3,900,000
=34 35 King Sturge 37 29 44 1,650 600 5 5 4,100,000
=36 =30 Atisreal Ltd 35 40 64 7,600,000
=36 =66 Hyder Consulting
(UK) Ltd 35 11 40 1,110 425 5 2.5 2,380,000
38 34 WA Fairhurst &
Partners 32 30 32 975 338 0 0 1,400,000
39 Andrew Martin
Associates 31 45 2,200 640 9 5 4,051,000
=40 33 Jones Lang LaSalle 29 32 36
=40 =39 Knight Frank 29 25 36
42 =42 Tetlow King Group 26 24 39 2,850,000
=43 =62 Colin Buchanan 25 12 30 1,230 563 1,816,000
=43 =62 Lambert Smith
Hampton 25 12 31 1,312 550 10
=43 =39 Rapleys 25 25 32 3,040,000
46 =42 Colliers CRE 23 24 27 1,540 655 0 5 2,700,000
=47 =37 DPDS Consulting
Group 22 27 43 3,000,000
=47 44 SLR Consulting 22 21 45 7.5 5 9,950,000
=49 45 Adams Hendry
Consulting Ltd 21 20 26 2,008,000
=49 =62 DMH Stallard 21 12 21 0 0 1,500,000
=51 =48 Alliance Planning 19 18 28 1,200 400 0 5 2,430,000
=51 =39 BDP 19 25 21 1,660,000
=51 53 Planning
Perspectives 19 15 23 1,500 420 5 5 2,450,000
=54 =48 DHA Planning 18 18 24
=54 =46 Emery Planning
Partnership Ltd 18 19 26 11 5 1,730,000
=54 =46 Tyler-Parkes
Partnership Ltd 18 19 23 900 0 0
=57 52 Bell Cornwell
Partnership 17 16 19
=57 PFA Consulting Ltd 17 20 1,450,000
=59 =54 Baker Associates 16 14 18
=59 =66 Keppie Planning 16 11 18 12 10
=61 =54 Boyer Planning Ltd 14 14 19 1,600 450 5 5 2,320,000
=61 =50 Cluttons 14 17 16 1,575 600 25 10 1,060,000
=61 =54 Hunter Page
Planning 14 14 21
=61 =66 London Planning
Practice 14 11 17 2,300 450 10 5 1,809,000
=61 =58 Scott Brownrigg 14 13 15 1,650 650 5 5 1,300,000
=66 =66 Peacock & Smith 13 11 16 1,240 520 5 5 1,800,000
=66 =58 Smith Stuart
Reynolds 13 13 20 10 0 1,000,000
68 =66 WS Planning 12 11 14
=69 =78 David Simmonds
Consultancy 11 8 11
=69 =66 Vail Williams 11 11 18 1,600 7 0 1,675,000
=71 =83 Amec Earth &
Environmental 10 7 10 4 5 1,800,000
=71 =73 Halletec
Associates 10 10 11 800 350 8 3 380,000
=71 =83 HLL Humberts
Leisure 10 7 13 1,250 600 5 5 1,200,000
=71 =58 Lennon Planning 10 13 13 1,125 550 5 5 1,300,000
=71 =73 Matrix Partnership 10 10 12 975 600 14 7 667,357
=71 =58 Ward Hadaway 10 13 12 700 1,461,602

FOOTNOTES:
(1) Planning fee-earners at 1 September 2008
(2) Planning fee-earners at 1 September 2007
(3) All managerial, professional, technical and administrative staff
employed in planning consultancy at 1 September 2008
(4) Maximum daily fee chargeable at 1 September 2008
(5) Minimum daily fee chargeable at 1 September 2008
(6) Increase in daily fee rates in year ending 1 September 2008
(7) Predicted increase in daily fee rates in year ending 1 September
2009
(8) Planning fee income in year ending 31 March 2008


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