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Handbook
of Practice
Management
Ninth Edition
© RIBA Enterprises Ltd, 2013, reprinted 2016
1st edition published 1965*
2nd edition published 1967*
3rd revised edition published 1973*
4th revised edition published 1980*
5th edition published 1991†
6th edition published 1998†
7th edition published 2001†
8th edition published 2010†
*Under the title RIBA Handbook of Architectural Practice and Management
†Under the title RIBA Architect’s Handbook of Practice Management
The right of Nigel Ostime to be identified as the Author of this Work has been asserted in accordance
with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without prior permission of the copyright owner.
While every effort has been made to check the accuracy and quality of the information given in this
publication, neither the Author nor the Publisher accepts any responsibility for the subsequent use of this
information, for any errors or omissions that it may contain, or for any misunderstandings arising from it.
Contents
Forewordvii
Prefaceix
Acknowledgementsxi
About the author xiii
Foreword
Since the first edition was published over 50 years ago, the RIBA Handbook
of Practice Management has become a long-standing companion in the
challenges of running and managing an architectural practice.
This ninth edition builds on the developments brought to the previous
edition and brings it right up to date, incorporating the new RIBA Plan
of Work 2013, additional advice on starting a practice, plus more on IT,
sustainability, working collaboratively and BIM as well as other key topics.
The Handbook complements the ninth edition of the RIBA Job Book, and
just as the Job Book sets the standard for running an architectural project,
so the Handbook sets the standard for running the practice as a whole.
Through better management of its finances, its processes, and – that most
valuable of assets – its people, any architectural practice can ensure it
operates on a more secure, more profitable, and ultimately more creative
basis. This is the case whether the practice is new or well established, and
whether a sole trader or a large firm; all should make good use of this book.
Stephen R. Hodder MBE
President, RIBA (2013–2015)
ix
Preface
Acknowledgements
The author would like to thank Richard Fairhead for his contribution in
updating Chapters 10 and 12 with regard to classification and BIM. Thanks
also to David Stanford, Graham Hickson-Smith and John Waddell whose
contributions to the previous edition have not been forgotten; to Adrian
Dobson and Richard Brindley from the RIBA for their invaluable input
and advice; to Jane Duncan for her input on diversity and equality in the
profession; to David Gloster for his input on architectural education; to
Lynne Sullivan, who wrote The RIBA Guide to Sustainability in Practice (2012),
used as a source for Chapters 3 and 8; and to Simon Howard of the ARB.
xiii
The industry
01 The construction industry
02 The profession
03 The law
3
This chapter:
• discusses current issues within the construction industry;
• considers trends within the industry;
• lists the key roles within the construction industry;
• provides a list of useful organisations that offer support and
information.
1.1 Introduction
We have undoubtedly witnessed significant change in the construction
industry over the past seven years or so in terms of its composition, increased
competitiveness, advancing technology and, of course, a reduction in its
capacity due to the economic downturn experienced across much of the
globe.
Architectural practices have needed to respond to these changes to
remain in business by being flexible in their business planning and project
execution. This has been a difficult transition, but there are many positives
to be taken from it, including:
• the need to focus on design quality while maintaining tight control on
costs – both of the construction and of design development;
• the need to embrace emerging information technology and building
information modelling (BIM);
• the benefits of collaboration, facilitated by the RIBA Plan of Work 2013.
The European economy remains fragile and the key issue in the UK construction
industry will remain a financial one for some time to come, with continuing
public spending cuts and restricted lending for private development.
Some sectors have shown signs of recovery, and there is still an enormous
demand for housing, particularly in London and the South East. Large public
infrastructure projects have helped limit the deficit of construction activity,
but a return to pre-recession levels of activity is some way off.
Sustainability has taken something of a back seat and targets for
improvement have been eroded. Framework agreements have diminished,
at least in the private sector if not in the public sector. BIM has had greater
uptake in the private sector, despite government dictates on public sector
procurement. Payment conditions are often poor, with the public sector
4 Part 1: The industry > Chapter 1: The construction industry
The RIBA provides a freely available range of climate change toolkits for
architects, which provide an overview and introduction to particular areas
of professional knowledge, with detailed guides to further sources of
authoritative information. Advice can also be sought from organisations such
as the BRE (see Section 1.5), which has developed a range of sustainability
standards, codes and methodologies (such as BREEAM) for buildings, homes
and communities. For more information, go to the BRE website (www.bre.
co.uk) or refer to the RIBA website.
There have been significant changes to the town planning system, with the
advent of the National Planning Policy Framework, and at the same time
a diminished role for (Design Council) CABE, which has been a victim of
government cuts, reducing its capacity to act as an advocate for the value
of design and the promotion of design standards.
The RIBA and Fees Bureau’s 2012 Employment and Earnings Survey findings
show that the ethnicity of architects is predominantly white: 94% of the
UK’s architects are white. This indicates that the issue of diversity is not
firmly on the profession’s radar.
So what can we do to improve this situation?
• Consider whether your staff reflect your locality and your clients.
• Introduce mentoring schemes to encourage and support all staff members.
• Move the culture of your business away from being dominated by how
many hours employees work in the office.
• Make flexible working available for all as a default. Do not make it women/
carer-centric, as this can lead to resentment.
• Offer work experience or paid holiday jobs to people from diverse
backgrounds, to allow them to gain experience and dispel any myths
they might have about the work involved.
10 Part 1: The industry > Chapter 1: The construction industry
1.3.6 Consolidation
Another trend is the amalgamation and consolidation of consultancies –
particularly in engineering – and the formation of large, multi-disciplinary
organisations. The middle ground is diminishing and the gap between
the small, local service provider and large corporations is growing. A
similar trend can be seen in construction companies. Despite this the UK
construction industry remains fragmented. Most companies in the industry
are small and domestically owned, with localised operations, but further
consolidation is anticipated over the next few years.
Europe, the Middle East, Eastern Europe, Russia, India and China. The RIBA
Business Benchmarking Survey 2012/13 data indicated that overseas projects
represented some 20% of the workload by value of the UK architectural
sector as a whole.
While many western economies are only slowly emerging from the recession
– and some will continue to experience difficulty for years to come – other
areas of the world have bucked the trend throughout this period and have
experienced growth in construction. There will continue to be demand for
UK architects’ services to support investment in these growing economies.
UK architects are seen to have strong credentials in areas such as sustainable
design, master planning, regeneration and conservation, and the UK model
for architectural education is perceived to produce architects with a high
level of design creativity. Fast-emerging markets such as India and South
America, which are relatively unfamiliar to UK architects, may present some
exciting opportunities.
The RIBA has produced a reference handbook, called Working Internationally,
which has valuable content for practices wishing to explore working in
overseas markets. This includes information on cultural awareness, business
issues, the role of the architect, international contracts, finding international
partners, sourcing work and marketing internationally as well as references
to further sources of help. The Working Internationally handbook can
be downloaded from the RIBA’s website (www.architecture.com/RIBA/
Working%20internationally/Workinginternationally.aspx).
UK Trade & Investment (UKTI) provides expert trade advice and practical
support to UK-based companies wishing to grow their business overseas.
Their services include participation at selected trade fairs, facilitation of
outward trade missions, and the provision of bespoke market intelligence
and information on overseas regulations and business practice. Further detail
on UKTI services is available at www.gov.uk/government/organisations/
uk-trade-investment.
The European Union now effectively represents the ‘home’ market for UK
architects, and much regulation that affects the work of architects and
the procurement of buildings is derived from key EU directives, including:
• Directive on Recognition of Professional Qualifications
• Services in the Internal Market Directive
• Procurement Directives.
A significant amount of UK building regulation, health and safety and
environmental regulation is now also EU based. The Architects’ Council of
Europe (ACE), of which both the ARB and the RIBA are members, represents
Part 1: The industry > Chapter 1: The construction industry 13
A key characteristic of the industry is the wide range of project values, from
minor works – frequently either domestic projects or maintenance work
costing a few thousand pounds or less – through to major infrastructure
projects with budgets of several billions of pounds. Clearly there are
enormous differences in the skills, knowledge and resources needed to
execute projects of such differing size, and this is reflected in the differences
in scale to be found within the industry. Most sectors comprise a small
number of large companies and a great many medium-sized and smaller
firms and sole traders.
In the architects’ profession there are a few major practices with several
hundred employees. According to RIBA Chartered Practice data, the total large
practice sector (defined by the RIBA as practices employing 50 or more staff)
represents only 3% of firms, but employs one-fifth of RIBA chartered members
in private practice. Conversely, the small practice sector (defined by the RIBA
as practices employing ten or fewer staff) makes up nearly 80% of practices
and employs 44% of the chartered architects working in private practice.
Roles in the design team have been re-examined with the advent of the
RIBA Plan of Work 2013. There is now a greater emphasis on collaboration
and BIM processes. There is also a greater emphasis on post-completion
activities and how these can feed into the initial stages of future projects.
14 Part 1: The industry > Chapter 1: The construction industry
1.4.1 Client/employer
The person or organisation that commissions the project is generally,
although not necessarily, the owner of the site and the eventual owner of
the building. Clients range from individuals having work done on a house, to
government bodies or multinational corporations. Increasingly, contractors
are employing architects, either as employees or by commissioning practices
to undertake production information and construction stage services, either
directly or following novation of the architect’s appointment at a particular
stage in the project.
With the growing variety of work and potential areas of specialisation
open to architects, it is important for them to identify what areas they
want to target. Chapter 5: Marketing and business development gives
some guidance on this.
As clients are such an integral part of an architect’s working life, there are
many references within this book to the architect–client relationship and
what it entails:
• Chapter 2 – The profession (Sections 2.1, 2.2, 2.5–2.9, 2.11, 2.12)
• Chapter 3 – The law (Sections 3.2, 3.5, 3.6)
• Chapter 4 – Setting up a practice (Sections 4.2, 4.3, 4.5)
• Chapter 5 – Marketing and business development (Sections 5.1, 5.3–5.5)
Part 1: The industry > Chapter 1: The construction industry 15
1.4.2 Contractor
A main or principal contractor will usually be appointed as the constructor
of the building. In practice, most of the actual work will be sub-contracted.
Contractors vary in size from small firms with only a few permanently
employed staff and close links with other small firms and self-employed
tradesmen, to large organisations with a head office, permanent staff
and often regional and possibly international offices. Most firms practice
as limited companies, with some of the larger ones being public limited
companies.
Main contractors are now typically referred to as Tier 1 contractors in many
public sector and leading private sector projects. ‘Tier 1’ refers to their
position in the supply chain – that is, the direct contractual relationship
with the client.
1.4.3 Sub-contractor
Sub-contractors are companies to whom work is sub-let by contractors.
They range from firms who provide relatively unskilled labour for general
construction work through to firms providing highly specialised elements
of the building such as internal fit-out or IT installations and firms who
provide, in addition to the workforce needed to carry out a task, highly
technical expertise which contributes to the design of a project, for example
piling or cladding manufacturers. Generally the choice of sub-contractor
is left to the contractor and their performance is entirely the contractor’s
responsibility. Sometimes, however, the client or designers may choose
the subcontractor, particularly where specialist design input is needed.
Sub-contractors are now more closely defined as specialist and specialist
engineering contractors, and are known within the supply chain as Tier 2, 3,
4, etc. contractors, depending on the number of levels they are away from
the Tier 1 relationship. If a Tier 1 contractor lets a contract to a supplier who
lets a contract to another, who contracts a sole trader heating engineer to
do the work on site, this last would be a Tier 4 contractor.
16 Part 1: The industry > Chapter 1: The construction industry
Developer clients
Property developers form an important group among an architect’s
clients. Essentially a property developer is someone who facilitates
change to a piece of land or real estate, with the aim of generating
an increase in value. The variety and scale of development is great,
from building a single dwelling on a piece of land to master planning
a city. Property development is entrepreneurial by nature, with the
developer usually taking the greatest financial risk but also realising
the greatest reward on success. The property developer initiates the
project, raises finance for it and coordinates the activities required to
realise the development. This includes land acquisition, through planning,
design, construction, finding end-users and perhaps even managing
and maintaining the asset following completion.
Developers have differing fields of specialisation:
• Trader developers buy and sell, sometimes without doing any
development as such, buying at below market value, holding the
property for a while, then selling on at a higher price.
• Investor developers are property companies or individuals who
basically buy an income, and therefore the buildings they purchase
will usually be let, yielding a return for them on their investment every
year. They will tend to hold property in the longer term where the
lessee’s covenant is often as important as the income itself.
• Asset managers manage real estate for institutions or private
individuals against a set of predetermined business objectives. The
activities they undertake might include lease compliance, landlord
and tenant issues, planned maintenance, credit control, benchmarked
rent collection, service charge budgeting and reconciliation, financial
management and accounting, procurement and contract management,
and health and safety. An asset manager should always seek to ensure
that the maximum possible income is gained from a property.
• An institution, often referred to in terms of an institutional investor,
is an organisation charged with investing a sufficiently large amount
of money, frequently on behalf of a group of individuals. Examples of
institutional investors include pension funds, insurance companies,
banks, foundations and endowments, hedge funds and mutual
funds. They will own, invest and hold property assets as part of a
balanced portfolio of products that yield a return for their clients or
themselves.
Part 1: The industry > Chapter 1: The construction industry 17
1.4.4 Architect
1
Architects form a relatively small but influential group among the large
number of qualified professionals working within the construction industry.
Architects are regulated under the Architects Act 1997, although this
legislation protects the title rather than the role – there is no requirement
under the law for the designer of any building to be an architect. In practice
it is normally the architect’s responsibility to facilitate the coordination
and integration of the work of other designers and specialists into the
overall design. The architect has traditionally also acted as the overall lead
consultant and administrator of the building contract, although this is not
always the case on many large projects, where a project manager or other
consultant may take this role. Architects are, however, increasingly being
called on to provide a single point of contact to the client for design services,
sometimes sub-contracting structural and mechanical and electrical (M&E)
engineering and other design services.
With the advent of BIM-enabled projects, a new area is open to architects:
that of information management. Under the RIBA Plan of Work 2013 (see
Chapter 10), Stages 0 and 7 provide the opportunity for architects to extend
their service after the building has been completed. In Stage 7 the building
is managed – throughout its life up to its eventual demolition. A BIM model
can be used to assist in this and architects should seek opportunities to
perform this service for their clients. Traditionally, once a building has been
completed the architect has had little involvement in managing it as an
asset or a facility, but this could change, with consequent benefits to the
profession and the industry. As buildings become ‘smarter’ they also require
greater technical understanding to run them efficiently and information
technology can play a key part in this.
industry bodies were united as Constructing Excellence in 2003 to form a voice for
improvement in the built environment sector.
constructingexcellence.org.uk
C ontractor or g anisations
Build UK
Build UK provides a collective voice for the contracting supply chain in construction
and brings together 27 of the industry’s largest main contractors and 40 leading trade
associations representing over 11,500 Specialist Contractors. The organisation focuses
on key industry issues that can deliver change and enable the contracting supply chain
to improve the efficiency and delivery of construction projects to the benefit of the
industry’s clients.
Part 1: The industry > Chapter 1: The construction industry 21
Build UK was created as a result of a merger between the National Specialist Contractors’
Council (NSCC) and UK Contractors Group (UKCG) in 2015.
1
www.builduk.org
P rofessiona l or g anisations
qualification of Building Engineer, a title that exactly reflects the professional expertise
of members.
The Association was founded with the principal objectives to:
oo promote and advance the knowledge, study and practice of each and all of the arts
and sciences concerned with building technology, planning, design, construction,
maintenance and repair of the built environment and the creation and maintenance
of a high standard of professional qualification, conduct and practice;
oo encourage and facilitate co-operation between the construction professions.
The Association was granted its Royal Charter in 2013.
www.cbuilde.com/home/
APM’s mission statement is: ‘To provide leadership to the movement of committed
organisations and individuals who share our passion for improving project outcomes’.
1
www.apm.org.uk
without any form of discrimination. From the 27 delegations present at the founding
assembly in Lausanne, Switzerland, in 1948, the UIA has grown to encompass the
key professional organisations of architects in 124 countries and territories, and now
represents, through these organisations, close to 1,300,000 architects worldwide.
www.uia.archi/
through advice, training, technical and business services, and the setting of standards
for the education of architects, both in the UK and internationally.
1
www.architecture.com
I nd u str y or g anisations
The profession
THIS CHAPTER:
• outlines the guiding principles of the profession of architecture,
and considers potential future trends and challenges;
• looks at the statutory regulations governing the practice of architects;
2
• describes the role of the ARB, and its code of conduct and disciplinary
procedures;
• explains the structure and governance of the RIBA, and its purpose;
• discusses the membership benefits and entry requirements of the
RIBA, current thinking on education and the role of CPD.
2.1 Introduction
The RIBA/CABE publication The Professionals’ Choice sets out four guiding
principles of the professions:
• formal association;
• trustworthiness;
• observing the public interest;
• maintaining and developing a body of knowledge.
The professions need formal means to control membership, and they do this
by requiring a level of proficiency for entry and by being able to exclude
those who do not practise within their rules. These standards need to be set
at a level such that members have appropriate knowledge and expertise,
and exercise reasonable skill and care, but not be so high as to make fees
uncompetitive. Members of the architects’ profession operate in a broadly
free market for the provision of architectural services, albeit with protection
of the title ‘architect’ through the Architects Act 1997, and have to be able
to provide value compared with non-members offering a similar service.
Professions must also be trustworthy, and not use their knowledge to gain
undue commercial advantage over their clients: this is increasingly achieved
through regulation and the law, and through auditing, both internally, and
by external, client-appointed consultants. They should be independent of
the purely commercial interests in their industry, and balance the needs
of their members against those of the public. Architects traditionally act
as an independent agent between their client and the contractor while
balancing the interests of the client with those of the wider community
30 Part 1: The industry > Chapter 2: The profession
and the environment. However, with the growth in Design and Build
procurement, architects also increasingly find themselves employed directly
by the contractor, and this presents new challenges in meeting their wider
responsibilities.
Architects are creative designers as well as project managers and contract
administrators, and this will always make them unique among other
construction professionals. Critically, however, this creativity is combined with
experience and knowledge that is gained through experience and not easily
found through reference. It is becoming increasingly important for architects
to manage their knowledge for commercial advantage (see Chapter 13).
A professional body, then, can be defined as a formal association of specifically
educated members that assures their ability through examination and
certification, and their trustworthiness through regulation, and provides
support and advice to achieve those aims.
In most countries throughout the world there is generally some regulation
of function or, at the least, protection of title for architects. Successive UK
governments have been keen to ensure free competition for architectural
services and have shown no appetite for regulation of function, perceiving
that the industry is sufficiently regulated through planning, building control
and health and safety legislation. They have been prepared to accept the
argument for continuing protection of title, provided it is self-funded by the
profession through a body such as the Architects Registration Board (ARB).
The question could be asked, though: Is protection of title really of benefit
to the public or the profession, or does it simply restrict the development
of more flexible services?