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Fraser blames fee levels and tick-box procurement for demise

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Malcolm Fraser has spoken to the AJ about the shock collapse of his practice and has called for a shake-up of the ‘process rathen than product’ driven procurement system

Just days after his 15-strong company Malcolm Fraser Architects (MFA) went into liquidation, the Edinburgh-based architect set out the reasons why the outfit shut its doors and urged a major rethink about the way architecture is procured to prevent other firms following suit.

He said: ‘My practice’s central problem was that almost all our work was high-profile and maximum challenge set within a very competitive fee context. We never managed to get the larger jobs that could sustain those high-profile jobs - despite strenuous efforts.

‘We also worked proactively on putting numerous projects together ourselves [at feasibility stage] but despite many, many attempts they didn’t turn into live projects for us.’

Explaining what could be done to improve the situation, the award-winning architect added: ‘[Our] issues were made much more difficult by the current “process rather than product” focused procurement system in Britain.

‘There needs to be a significant redressing of the balance in the [tender system] towards delivering a beautiful product. At the moment it is weighted, roughly, at 60 per cent design to 40 per cent cost. But architecture is massively more important than that. ‘It should be 90 per cent design to 10 per cent cost which would allow the importance of architecture to be properly considered.’

Fraser, whose practice was shortlisted for the Stirling Prize in 2002 for its DanceBase in Edinburgh, believes the architectural instituions had not done enough to force changes to the procurement system nor had they banged the drum loud enough about good quality design.

He said: ‘It would have have been good to see the RIAS and RIBA calling for [procurement change] too. As a profession we have yet to get the message out about the simple utility of architecture. Of the importance of creating humane spaces with light and views.

‘What we do enriches lives and makes people, happier, wealthier and healthier. Unless we can convince at this basic, utilitarian level we are not going to get the recognition our art form deserves.’

Fraser also warned that level of fees in Scotland remained dangerously low. He said: ‘I don’t feel the situation is getting any better yet. The market does what it does and the pressure on fees remains as hard as ever. It is difficult across the industry in Scotland.’

His fears were echoed by many architects who are worried the surprise failure of Fraser’s 22 year-old company could be the first in a series of collapses of medium sized architecture practices in coming months.

Glasgow architect Alan Dunlop said: ‘[MFA’s liquidation] is shocking news and a sad indictment of sub-standard public procurement process in Scotland, which is contractor-led.

‘The mantra is “value for money”, which really means fees are driven into the ground, often resulting in poor quality cookie cutter schools and health projects. Frankly I expect more liquidations to come, this maybe just the start. I hope not.’

A statement from the RIAS said that the collapse of MFA demonstrated that trading conditions remain tough and margins in architecture are currently very tight.

It said: ‘It seems odd that when architects can contribute quite so much to the quality of people’s lives that this is not recognised by some clients who see it as their duty to shareholders or the public purse to squeeze fees to a point where architects’ businesses are no long viable. As a consequence, jobs are lost and society is also the loser.’

Neil McAllister, architect at GLM, said: ‘The news….must be taken as a wakeup call by us all – that a practice which on outward appearance was very successful can underneath be struggling.’

He said that the demise of the design-led firm demonstrated there was something ‘significantly broken’ in the industry.

‘Often it appears that there are two options for an architectural practice – to produce quality or profit – with the line between being a very difficult one to tread.

‘Somehow the profession needs to persuade clients – both public and private sector – of the value of their work and therefore be able to charge sustainable fee levels.’

Another Edinburgh-based architect, who did not want to be named, told AJ that his practice had recently spent £10,000 on feasibility work on a scheme for a university, only to lose out.

‘If you have that happen to you six or seven times in a row then you are in big trouble,’ he said.

Graeme Massie, director of Graeme Massie Architects, based in Edinburgh, said: ‘Procurement clearly is an issue in Scotland, as it probably is elsewhere too; however, I can’t see this changing in the foreseeable future, as it benefits those with influence in the construction industry while simultaneously reducing competition.’

Eugene Mullan, director of Edinburgh-based Smith Scott Mullan Associates, said: ‘It’s a very sad situation. I don’t know what led to it but my concern would be it’s a reflection of the challenges of operating an architectural practice in the current economic and procurement environment.’

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  • 2 Comments

Readers' comments (2)

  • Unfortunately it nearly always comes down to costs, especially with housing. This is where design gets pushed out and is considered an additional expense.

    Taking the Scotland issue out of the equation and looking at a typical 3 bed developer house in outer London the developer costs are colossal and all created by government.

    In Merton the offset affordable housing payment is £71,000 per house. Cil payments in parts of London are £575 per sqm plus mayoral of £50 sqm. That is an additional £60,000 in tax per new house. Add on again the S106 payments which are typically £10,000 per house and that adds up to £141,000 in tax per house.

    This does not take into account the cost of land, construction and professional fees, never mind corporation tax on profits. All this squeezes design down to the minimum and causes low quality materials to be used with minimal allowance for carbon reducing measures to be incorporated.

    As architects we are fighting a losing battle created by government. We either take work from developers and accept our design advice and recommendations will bear little weight or stick to our guns, like Malcolm Fraser bravely appears to have done, and suffer the consequences.

    Unfortunately when the ultimate aim of development is profit and the taxes imposed by government are so high then architecture and quality not be of primary importance to developers and the architects value to the project will decrease.

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  • Architects need to be protected from their innocence by the Institute. Architects are not businessmen, if they were, they would be design-builders and there would be no architects.
    The London bubble and the fact that most London projects are 'OPM' (other peoples' money so nobody cares), have lawyers, surveyors, planning consultants and CGI artists charging serious fees, keeps London fees up.
    The rest of the country (the real world) has clients using their own money or own borrowings, so keep pressure on fees, and there are too many small practices charging subsistence fees.
    The Institutes have to go to government and tell them minimum fee-scales are required to do the job. They have to go to the PII market, and get their support. (a lousy service is likely to increase risk of claims).
    I always tell clients that the more time we can spend on the project, the better the solution will be, the more efficient the building will be, the quicker the construction will be, and the better end-value of the building will be. Much more importantly, the cheaper the final account with the contractor will be.
    Every 0.5% extra on the architects (or engineers) fees, brings 20 times the savings in construction.

    There is no way the likes of Malcolm Fraser Office can balance the books in the current market. The care that they take in feasibility studies, design development, competition submissions can only be funded by free overtime and weekend working by dedicated staff, and partners just writing off their time. In the regions, the client won't even think of paying for that.

    When the impending mega-crash comes, I will close my office and do my own developments -with private banks or private funding. For years we have used London projects to subsidise our local projects, that will end overnight when the banking system collapses.

    This is all going to be horrible.

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