Tesco orders its consultants to slash fees and George Wimpey Bristol wants 20% off current contracts, while QSs and housebuilders shed staff

Tesco has ordered QSs to cut their fees by up to 50% or face losing future work.

The decision, which the retail giant blamed on the ‘current economic climate’, will apply to all work in the 2009/2010 development programme and will affect the consultants Turner & Townsend, Faithful + Gould, Rider Levett Bucknall and Cyril Sweett.

Sources told Building that fee cuts could amount to between 20% and 50%, depending on the size of job, and will apply to all new stores and extensions, but not its distribution centres or smaller ‘Express’ stores.

The news came as Davis Langdon said it was in consultation to cut up to 150 jobs, taking total redundancies to 240, or 13% of its total workforce in 2008.

Gardiner & Theobald is also understood to have initiated a second consultation on redundanices, although senior partner Tony Burton has told staff that their jobs are secure for the next 90 days, reports Building.

Meanwhile, Gleeds has also confirmed that it has made 90 redundancies in the past six months, and will review the situation on a week by week basis.

Housebuilders are facing another difficult year. Bovis Homes this week announced plans to slash 200 more staff on top of the 400 shed last year, taking its headcount 60% below the 1,000 staff employed at the start of 2008. Forward sales at the company on January 1st were 48% below last year’s, according to Construction News.

CN also reports that Taylor Wimpey subsidiary George Wimpey Bristol has written to subcontractors asking for a 20% cut on all current orders, warning that sites will ‘grind to a halt’ unless cuts are made. Responding to the news, National Specialist Contractors Council chief executive Suzannah Nichol said the housebuilder was ‘out of touch with reality’ for suggesting a 20% cut when companies’ margins are so low.

In more positive news, Building reports that the government’s schools building programme is to receive a £300m bail out from the European Investment Bank to prevent it falling behind after banks indicated they had problems funding schemes.

The package will target Building Schools for the Future schemes which are approaching financial close but do not have committed lenders.

Source

Construction Manager