It’s time for steady nerves and cool decisions
Paul Finch’s letter from London: Keep calm and carry on
The febrile state of the construction sector is inevitably reflected in the architectural market. Practices are the antennae of the industry, first to know when good times are on their way, but equally the first to know when they aren’t.
The symptoms of trouble, which began three years ago, never change: schemes with permission are put on the back burner with production drawings not required. The phone stops ringing quite so often and then stops for days or weeks on end. The pressure to find cost cuts in jobs that have gone too far to cancel increases.
Just as bad is the public sector. The siren call for quantity and cheapness becomes irresistible, assuming there is any budget at all for new building. Whitehall gets sanctimonious about procurement: its latest pronouncements about PFI, a Conservative invention, are a marvel of vagueness. (We are still to get buildings that would have been part of the mechanism, but in some as yet unstated way it will all be much cheaper and better and will not involve incurring additional debt. If we are moving towards smart PFI, without the idiotic extras such as 30-year contracts for cleaning or catering; good. If we are going to drop PFI and use old-fashioned finance methods; fine, provided there is actually a programme to fund.)
Then there are the nasties, tripping up even well-organised practices. Bad debt insurance is now more or less impossible to obtain, but bad debts are escalating. Well-known firms are facing crippling cash flow issues. We can expect more Company Voluntary Arrangements and possibly bankruptcies, mergers and takeovers. Suddenly those attractive long leases, on far more space than is now required, look like liabilities rather than assets.
Nevertheless, this is not a moment for panic. UK practices have been through worse situations and survived. It is possible to pay off creditors in an orderly fashion. Leases can be sold or sub-lettings arranged. A firm that is getting smaller is still a firm. And there is still work. Despite the assertion that the government is cutting everything, that is not the case in reality. The construction sector is still worth the best part of £100 billion a year, including repair and maintenance.
We still have a housing programme and that may well get bigger as a result of recently announced initiatives. Transport spending is going to increase, even if it takes a long while before ministers seize the possibility of the Thames Estuary airport proposed by Foster + Partners and Halcrow, surely the project to suit the times. Even Battersea Power Station, that development mirage, is to get an underground station.
There is also work abroad in those parts of the world where the euro means little, but rapid expansion means much. The export story of UK architecture is one of extraordinary success, and despite alarm over slow payments, or at worst non-payments, the fact is that most work is paid for most of the time and always will be. Now is not the time to batten down the hatches in respect of potential overseas work, provided the practice has the appetite for it and is prepared to take some calculated risk on travel and spec work.
As for the home market, things in general will feel as though they are getting worse even if that is not the underlying case. This is of little comfort to people running practices, who not only have to take tough decisions, but also – what can feel more difficult – convey those decisions to staff and clients.
In these circumstances it is worth reminding ourselves that the demand for design across all fields is inexhaustible. Architects, by their training and their life skills, are better equipped than many to face up to uncertainty and difficulty as though they were simply another site and programme to deal with.
As for the architectural media, we should behave as constructive friends rather than mere observers. We really are all in this together.