Firms forced into tender cuts as 1,000 architects claim benefits

Contractors on the stalled Learning and Skills Council (LSC) programme to renew further education colleges are being told to cut prices or risk being ejected from projects.

One firm told Building: ‘We’ve been told that if we can’t come up with a reduction of about 10%, they’ll put our scheme out to tender again. I think the colleges are under pressure to reduce prices if they want funding.’

The news came as skills secretary John Denham revealed that the LSC had received bids for £5.7bn of funding from colleges, which is double the £2.3bn the government has made available up to 2011.

Eight schemes, receiving £300m of public money were told to resume work this week, but 144 others are still on hold and have to justify their funding requests. After the assessment further schemes are likely to be given the go ahead at the end of the month, but it’s likely only half will resume during the present spending review period, due to end in April 2011.

As work for architects continues to dry up, Building Design reveals that a record 1,000 UK architects were claiming benefits in January, compared to 160 last year.

The news comes a week after the major practices Rogers Stirk Harbour & Partners, Zaha Hadid Architects and Gehry Partners all shed staff.

In response to the crisis, a recovery task force set up by the RIBA and the Association of Consultant Architects (ACA) said it is collaborating with the London Metropolitan University to set up an evening class to teach out-of-work architects how to become planners. ACA president Brian Waters said: ‘We are looking at setting up an induction course. It would be a 12-night course, it would be fairly cheap, and we know there are many planning departments which are short of planning skills.’

Respondents to a Construction News survey paint similarly gloomy picture for construction workers across the industry.

Of the 1,200 workers quizzed, two thirds said they felt ‘uncertain’ about the future, while 58% said they expected to earn less money in 2009 than last year and more than a third expected to earn a lot less. Only 11% expected to earn more.

Two thirds of respondents thought their company would be employing fewer people by the end of the year.

The bosses of small companies and site workers have been hit hardest, with three quarters of bosses and 84% of workers expecting to earn less, compared with about half of managers.

Just 9% of respondents said they were likely to recommend a job in the industry to their son or daughter. In contrast, 25% said they were very unlikely to do so.