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ACE calls for return of fee scales to tackle skills crisis

CONSULTING ENGINEERS were this week planning to press the government to reintroduce fee scales, 15 years after they were outlawed.

The Association of Consulting Engineers (ACE) said that reinstating fee scales was vital as the industry was on the brink of collapse in the face of mounting skill shortages.

Unless fees can be set at higher levels than those determined by market forces, salaries will stay depressed and skill shortages will worsen, the ACE warned this week.

Firms across the consulting sector must increase earnings by between 50% and 60% and raise salaries by up to 100% if they are to recruit and retain the staff they need, said chairman of the Association of Consulting Engineers fees taskforce Andrew Dutton.

Consulting firms are increasingly unable to find staff with the skills necessary to win and deliver work, Dutton said. 'The situation is unsustainable and market failure is a very real danger.'

The ACE and Construction Industry Council are gearing up to press the Office of Fair Trading (OFT) in March to reintroduce fee scales.

Fee scales were banned in the mid-1980s after the OFT ruled they were uncompetitive. The OFT also demanded fee reductions on the grounds that computers and information technology were making engineers more productive.

But the moves ushered in an era of undercutting and 'Dutch auctioning' that has seen consultants' fees plunge between 50% and 60%.

'We are seeing a situation where, due to government requirements, engineers are unable to sustain salary rates capable of attracting people to the industry, ' Dutton said.

His warning comes as universities body UCAS revealed the number of students taking civil engineering courses in 2001 was 5.3% down on the previous year.

'The crisis point for industry is now. Crisis point for the UK is in 15 years' time, when there won't be managers in the industry capable of running jobs. We are squandering our future, ' said Dutton.

He dismissed OFT claims that market forces determine fee and salary levels: 'The reality is that even though there is high demand, fees are still unsustainably low.'

Engineers contacted by NCE did not expect increased government spending on infrastructure projects to make much difference to earnings.

ICE President Mark Whitby confirmed the direct link between low fees and the ability of firms to attract skilled staff.

Many consulting firms are operating with a turnover of less than £30,000 per head he said.

This makes it impossible for them to pay attractive salaries.

Whitby confirmed that undercutting is still aggressively practised and in rare cases reaches levels as high as 70%.

But Whitby and ICE senior vice president Adrian Long rejected the reintroduction of fee scales as a solution to the skills crisis. 'The profession and society have changed in the last 15 years, ' said Long.

Consultants should be improving their earnings by offering better value, said Whitby. He called on the government to take a leading role as a construction client in promoting value over lowest price.

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