Hard Brexit jeopardises UK's £4 billion architecture industry

28 March 2018 Consultancy.uk

A survey of the Royal Institute of British Architects members has revealed that the majority have considered relocating in the two years since the 2016 Brexit referendum. Three quarters of those polled also said that growth of their international workload would be impaired without single market access – something which is jeopardised by the UK Government’s present plans.

With one year left until the conclusion of Brexit negotiations, 2018 is a critical year for UK businesses across every industry. Forecasts on the impact of the UK’s secession from the European Union usually tend to focus on heavy industry, with manufacturers in particular being regularly tapped for their opinions on the matter. However, a new report from the Royal Institute of British Architects (RIBA) has cast new light on a multibillion industry often overlooked by Brexit studies.

The ‘Global by Design’ report, provides a comprehensive survey of UK architects’ views on Brexit. The poll, which RIBA ran at the turn of the year, takes into account the opinions of some 1,000 members of the institution, and follows up on an original investigation carried out in 2016, after the UK’s fateful referendum returned a shock ‘Leave’ result, publishing their findings in early 2017, near the triggering of Article 50, which signaled the formal beginning of Brexit.

74% of architects state that frictionless acces to European single market is

The UK’s architecture industry contributes an estimated £4.8 billion Gross Value Added (GVA) to Britain’s economy each year. The findings of RIBA’s report cast the industry’s future prosperity into doubt, however, as a so-called ‘Hard Brexit’ could see major restrictions placed on cross-border trade between the UK and EU.

71% percent of architects believe Brexit is going to have a negative impact on the built environment, compared to 60% percent in the 2017 survey – suggesting that faltering discussions between the UK Government and the EU have majorly impacted the industry’s confidence of a workable deal being reached. This is in line with the broader picture for UK business, with a study from Eden McCallum at the start of 2018 showing a dramatic decline in businesses’ hopes on the matter. 82% of respondents were pessimistic about what 2018 and 2019 will bring to the UK economy – a damning contrast to 2015’s figures, when over 70% were found to be optimistic about the UK’s economic prospects for the next 1-2 years.

A large part of the architectural sector’s pessimism seems to stem from the fact it is so heavily reliant on easy international trade. The UK architecture industry is the largest exporter of architectural services in Europe, and according to RIBA’s report, since the referendum, one fifth of architects have considered taking on even more work internationally. This point is further driven home by the fact that 74% of architects believe that access to the EU single market is necessary, if they are to expand their international workload. Without this apparent life-line, future growth in the industry could be severely hamstrung.

Two thirds of architects have seen projects delayed due to Brexit

The 2018 report also reveals that 68% of architects have already seen Brexit impact their revenue stream, as they had projects put on hold. On top of this, more than 2 in 5 architects (43%) had projects cancelled since the EU referendum. Both figures represent a further rise on the previous results, which saw 61% experience delays and 36% endure cancellations.

Talent exodus

Many industries are facing a shortage of labour in coming years, with an ageing population rapidly approaching retirement potentially leading to a premium in wages for skilled employees. This could well be further driven home by Brexit. According to a recent study by Big Four firm KPMG, with Brexit negotiations continuing to cast doubt over freedom of movement between the UK and Europe, young, well-educated and high-earning EU nationals are the most likely group to be planning to return to the mainland. As many as 10% of EU nationals with post-graduate degrees, who earn above £50,000 a year are considering the move, creating the potential for a large talent shortage for employers, and placing a strain on public services such as the NHS.

While the impact of this has mostly been looked at from the perspective of public services and the financial sector – which could see some 75,000 jobs relocate from London alone – the architectural scene would likely be similarly stricken by a shortage in talent, should a Brexit be realised that does not protect the right of EU workers to move freely across borders.  At present, a mutual recognition of professional qualifications directive (MRPQ) enables the free movement of professionals in recognised industries, such as doctors or architects, within the EU. Without this in place, even with free movement rights in place, protected industries would have no standardised way of recognising the equivalency of degrees obtained in different countries, potentially making it very difficult for skilled workers to find employment in Britain.

60% of European architects say the have considerd leaving Britain due to Brexit

While the UK Government has issued statements in support of an ongoing MRPQ with the EU post-Brexit, nothing has been formally agreed upon, and with a year to go until the close of play on negotiations with Brussels, the architectural industry has become increasingly worried about this lack of certainty. Nearly half of repondents (47%) working for large practices told RIBA they are concerned that the prospect of no MRPQ agreement could see them lose valued staff. Confirming these fears, 60% of architects questioned said that they have considered leaving Britain due to Brexit, an increase of 20% since RIBA’s initial survey 2016.

Call for action

Following these worrying findings, RIBA issued a series of policy recommendations for the Government in response to the survey results. In order for the Government to maintain the UK's global role in architecture, RIBA’s recommendations include a deal with the EU that maintains market access, avoids non-tariff barriers, and new services trade agreements with priority markets that open new opportunities for UK architecture. The institution would also be keen to see a post-Brexit immigration system implemented which could facilitate its HR needs, along with an expansion of the scope and range to support architectural exports, particularly for small- and medium-sized practices, and continued mutual recognition of architects’ professional qualifications with the EU.

This last point was recently addressed by UK Prime Minister Theresa May. In a speech setting out the embattled Conservative leader’s vision for a post-Brexit economic relationship between the UK and the EU, May said, “Given that UK qualifications are already recognised across the EU and vice versa, it would make sense to continue to recognise each other’s qualifications in the future.”

RIBA responded positively to the statement. However, as per the report, the institution remains keen to see policy points put into action. RIBA Chief Executive Alan Vallance said, “While our calls for continued mutual recognition of qualifications are being heard, many EU architects continue to face uncertainty about their future in the UK. This is unsustainable: it is having a real-time impact on recruitment and is unquestionably a threat to the success of our economy and society. The UK Government must make urgent decisions that allow the sector to thrive today.”

Meanwhile, in what some may fear is an ominous sign of things to come, news has since broken that architectural practice Conran and Partners will make a handful of redundancies. The firm has stated the decision was taken due to the unpredictability of the market, partially caused by Brexit.

A spokesperson for the practice remarked, “While we have a very strong order book for the coming year with some exciting opportunities in the pipeline we have, like many others in the industry, seen delays to the start of projects or stages of projects. There seems to be a general view that uncertainty – at least in part due to the Brexit process – is contributing to these delays. Our approach is to respond tactically to the current market situation, something which we have always done.”

RIBA is the latest in a succession of industries to warn the Government over a Brexit deal which restricts the free movement of labour. Recently the European consulting industry issued a joint call for all governments across the EU to support open trade and easy movement of consultants between the EU and the UK after Brexit. The leaders of thirteen national consulting associations, including the MCA, published the collective manifesto at a special meeting of the industry’s European Federation at the end of last year.

Related: Decreasingly 'open' UK's growth prospects hit by Brexit instability

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”