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Watts Bulletin (Issue 136)

Welcome to the September issue of the Watts Bulletin. With industry activity still firmly in the doldrums and no glimmer of improvement on the horizon, weakness in the construction sector is shouldering the blame for the UK moving back into recession at the beginning of the year. In an attempt to get things moving, the government this month announced a new tranche of planning reforms designed to provide more work for hard-hit small builders and drive forward stalled housing schemes.

It remains to be seen whether or not these proposals will make it through the consultation stage. A more direct approach is being taken by the RICS, which is calling on the government to benchmark consultants’ fees. Underbidding is bleeding the sector dry and as we report this month, the RICS is working on the industry’s behalf to get construction professionals included in the government’s push to protect contractors from suicide bidding.

Also in this issue we report on the release of the new Rules of Measurement, changes to construction standards for school premises and new design guidelines for sports halls. The Health and Safety Executive is waging war on Legionella and momentum is growing behind the drive for reform in the residential leasehold sector.

Watts Bulletin (Issue 136)

RICS lobbies government to end ‘suicide bidding’

Construction consultants are struggling in the face of declining fees and underbidding, says the RICS.

Watts Bulletin Main Sep12

A recent report in Building magazine highlighted the problems being faced by surveyors and project managers as fees continue to decline in the face of ‘suicide bids’ from consultants desperate for work. According to the RICS, half of project managers and just over half of surveyors polled by the organisation have reported reductions in fees during the last six months. The majority of those questioned see no sign of improvement, expecting fee levels to stay at current levels or decline further. Only 3% took a more optimistic view and expected to see fees rising in the next six months.

In response, the RICS is calling on the government - which is establishing cost benchmarks for contracting work as part of its construction strategy - to include consultant fees in the initiative. Building quotes the RICS as saying it believes new fee benchmarks for consultants “will help better inform public sector clients of the level of bids it can expect from consultants and help stamp out underbidding”.

Despite government cuts in public spending, the public sector is still the industry’s biggest client, accounting for around 40% of total UK construction spend according to the Office for National Statistics. If the RICS is successful in its plea for the government to set new public sector benchmarks for fees, this could have a considerable impact on construction consultants around the country.

Do you think the government should take a more active role in regulating fee levels? Let us know your views. Join the discussion on Watts’ Twitter page @Watts_Group or become a member of the Watts Bulletin group on LinkedIn.

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The Watts Bulletin is the technical companion to the Watts Pocket Handbook, the essential guide to property and construction, as used by professionals since 1983.

Watts Bulletin editor: Trevor Rushton.

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