It ain't what you do, it's where you do it

for junior surveyors and 13% for associates since its last report in 1999. But not all QSs are smiling; the study has revealed widening regional differences in hourly rates, with levels in the North of England at about half those in London. And overall, fees remain obstinately low, at about 2-3% of total construction cost.

"The increases are good, but that's because charge-out rates were too low to start with," says Richard Steer, senior partner at Gleeds. Steer is concerned that senior QSs are still not earning fees comparable with other professionals, such as lawyers and accountants. He also feels that the rate increases are happening at the wrong end of the profession. He says: "Of course, it is good to hear that young surveyors have seen a large increase in charge-out rate. But it is the senior people who should be getting the big increases."

The continuing skills shortage and a lack of new recruits explain the rise in hourly rates for postgraduate QSs and surveyors. According to the report, Quantity Surveyors Fees 2001, charge-out rates have increased from £25 an hour to £31 for surveyors, and postgraduates' rates have risen from £20 from £25.

Associates saw the next biggest jump, from £40 to £45 and senior QSs were not too far behind, with a 9% increase to £38 from £35. Partners' and directors' average call-out rates have gone up 8% (£50 to £54) and sole principals have also had a reasonable raise, up 6% to £37 from £35 in 1999.

Tony Bevan, partner at EC Harris, agrees with Steer that these rates are generally too low. He says that QSs will only really increase their fees if they demand proper pay for their services. He says: "Good people come at a premium; you've got to reward them if you want to retain them and higher salaries mean higher charge-out rates. We are not interested in sending out trained professionals who will only get the same rate as a Kwik-Fit fitter." For Bevan, the problem is that too many clients are "buying QSs as though they were a commodity". He adds: "If people allow this, they are undervaluing themselves."

The researchers found that the size of a firm had a dramatic effect on charge-out rates: the average percentage increases concealed the fact that smaller firms were charging low rates. Principals in practices with two or fewer surveyors earn only £35 an hour, whereas those with between three and 10 practitioners tend to earn about £43-50. Practices with more than 11 surveyors charge the highest average hourly rates for their principals (£55), although this figure does not change significantly as the practices increase in size.

Regional variations between charge-out rates are also significant. The highest rates for a principal or partner are in London, at £65.

We are not interested in sending out trained professionals who will only get the same rate as a Kwik-Fit fitter

Tony Bevan, partner, EC Harris

South-east England takes second place, with a rate of £50. These fees contrast sharply with the lowest rates – in Northern England and Scotland – which stand at £35 and £43 respectively. The study found even lower rates in the South-west and Wales (about £25), but the researchers warn that the sample size was too small to yield a reliable result. The average rate for principals in the Midlands and Northern Ireland is £40.

The study demonstrates that the differential between the regions and the national average is greater this year than in 1999. To investigate the regional variations, the report's researchers created an index by comparing the national average fee rate for all new-build and refurbishment jobs with the average fee charged in each region.

This index revealed a widening gap between rates charged in the capital and Scotland. In 1999, fees as a percentage of construction on a new-build JCT contract were 2.6% in London, compared with 2.4% in Scotland – a difference of 0.2%. Now London's figure stands at 2.4%, while Scotland's is just 1.3% – a difference of 1.1%. The regional fee index indicates that Scotland has the lowest fees, followed by the Midlands and the South-west.

One QS, a partner in a two-man practice in Glasgow, says rates in Scotland are so low that QSs are becoming "a bloody charity". He says: "Our firm put in a bid for an £85,000 project at a fee rate of 2%, but we missed it by 25% after another firm offered a 1.5% fee and won – it's just crazy, but it's typical."

The QS, who does not want to be named, blames the weak market on the west coast of Scotland for the high degree of competition, which has too many QSs are chasing too little work. He also says the traditional role of the QS has been eroded over the past few decades as architects have taken more control over projects. The result, he says, is that clients do not understand the value added to a project by a QS.

Nigel Watkins, partner in the Cardiff office of Davis Langdon & Everest, admits that the market can be tight in Wales, and says he has seen QSs leave Cardiff to move to cities such as Bristol. He says: "Our office is busy and private clients especially are switching on to the idea of best value, but there are still clients in the area that are offering the lowest possible rates. The Welsh Development Agency talks about best value, but I haven't yet seen it put into practice. We do work for WDA but less frequently than we would like because we refuse to cut our charge-out rates."

Overall, the level of fees charged as a percentage of contract value falls as construction cost rises. So, the estimated fee charged for a £100,000 new-build JCT contract (3.4%) is about one-third higher then the fee charged for a £1m job.

Clients thought our job was simply to produce a tender document

Richard Steer, senior partner, Gleeds

The report also shows that QSs' fees still only make up about 2% of a design-and-build contract and 3.3% of a JCT refurbishment contract. This means that there has been no overall change since the 1999 report. The reason is that the increase has tended to occur at the lower end of the job scale, whereas projects at the upper end, in sectors such as sports, education and retail, are attracting lower fees.

For example, a £100,000 JCT new-build project attracted a fee of 3.3% in 1999. This has since risen to 3.4%. Fees for £2m JCT new builds are unchanged, but have fallen for schemes worth £4m and above. An £18m JCT project attracted fees of 1.8% in 1999, but now only reaps 1.5%.

The average fee trend for JCT refurbishment jobs has not changed since 1999. Average fees have marginally increased for new design-and-build contracts across all sizes, but are marginally lower for refurbishment design-and-build jobs.

Average fees have moved up in the new-build office, retail and public non-housing sectors (JCT contract). But there is evidence in the report that average fees are higher this year for small jobs and lower for large jobs. However, average fees in these sectors are higher than those recorded in the 1999 survey, which reflects the higher proportion of jobs within each sector.

Jobs carried out under a JCT contract where the architect acts as lead consultant attract higher fees than design-and-build projects, which tend to be led by contractors. But the gap decreases in line with job size, to the extent that fee levels converge for the largest jobs.

Public non-housing jobs have the highest average fees in new-build (JCT), and private housing sector work records the highest average fee for refurbishment (JCT). The lowest average fees for both new-build and refurbishment are recorded in the public housing sector. Industrial and leisure work continue to generate the highest average fees for new build jobs under a design and build contract.

Overall, most QSs seem confident that fees will continue to rise. Gleeds' Steer says initiatives such as the government's best value drive are taking effect and clients have a big role to play in improving QSs' image and rewards.