There is no end in sight to the recession and this is of real concern to many leading industry thinkers, not least Bob Shelley, senior project manager at Argent FM and newly installed president of the HVCA. Ian Vallely reports
There is no end in sight to the recession and this is of real concern to many leading industry thinkers, not least Bob Shelley, senior project manager at Argent FM and newly installed president of the HVCA. Ian Vallely reports

Everything was going so well. Clients’ confidence had reached the point where they were once again looking to spend significant sums, trust along the construction supply chain was at an all-time high and bad business practices such as retentions, Dutch auctions and late payment were on the retreat.

Then we experienced the worst recession in three generations. The debt mountain began to grow and economic expansion was stifled. As a consequence, optimism evaporated, everybody reverted to a default protectionist position and clients slammed their wallets firmly shut.

Bob Shelley, senior project manager at Argent FM and freshly elected president of the HVCA, identifies the result: “Everyone is more desperate for work than they ever were and bidding has become over-competitive.”

In other words, jobs are routinely being priced below cost. Mr Shelley again: “When you’ve got a base tender, you have a fairly straightforward formula relating to materials, labour and sub-contract costs… At the moment, the cost of the job being let is sometimes not much more than the basic cost of the materials. It is sub-economic – companies are taking on work to keep people busy, but they can’t possibly be making any money. Ultimately, that leads to business failure, which, sadly, we are beginning to see.”

Business failures inevitably result in job losses and, for Mr Shelley, the repercussions of this are clear: “Many of the guys who have been made redundant are setting up on their own so, all of a sudden, instead of having one or two lean, mean companies you have these competing with 20 or 30 one-man bands.

“I have no problem with one-man bands – there is a place in this industry for everybody – but I don’t think business is going to get any easier since the sector is so much more fragmented than ever before.”

Crippling skills shortage

Mr Shelley believes that, once the recession ends (which, he thinks, will not be for at least another 12 to 18 months), many one-man bands will be re-employed by larger enterprises, with some remaining self-employed.

However, he adds, a lot of people will choose that time to leave the industry and that is when we are in danger of suffering a crippling skills shortage: “The dearth of skills has probably been an issue for as long as I’ve been in the industry, but attracting the right people at all levels into our industry has become much more difficult over the last eight to 10 years.”

The problem is one of image: “Unfortunately, our industry is too often seen as manual and non-technical when, in fact, nothing could be further from the truth these days.”

For Mr Shelley, the increasingly high-tech nature of the industry offers real business opportunities for the future: “I think a lot of organisations are now looking outside the close confines of their traditional business and asking what else can we do? In some cases, they are beginning to specialise and finding new niches for themselves, particularly in the sustainable market.”

Indeed, he adds: “There is a huge opportunity here. The green agenda has to be delivered in some form and we are the people who can deliver it. We have to manage expectations and, as David Frise (the HVCA’s head of sustainability) suggests, integrate the various systems.

We can integrate systems

“As specialists, we are in the best position to integrate systems. Anyone can put a photovoltaic cell up on the roof or install an air source heat pump or boiler, but there are few who can integrate these systems and get them to work efficiently together.”

As a result, too often, “people who have been sold a supposed ‘system’ have been sold a pup”.

But this doesn’t have to be the case: “We need to deliver the systems that produce the benefits that designs and computer models promise the clients. If a client has a bad experience he won’t come back; if he has a good experience the likelihood is that he will.”

A man on a mission

For Bob Shelley, president of the Heating and Ventilating Contractors’ Association for 2011/12, the development of a low-carbon economy represents the biggest commercial opportunity the sector has ever known. He says: “The rewards are there for the taking provided we have the skills, the competence, the initiative and the will to reach out and grasp them.”

Mr Shelley has been a member of the Council of the Association since 2007. He served as chairman of the South East Regional Committee from 2009 until the spring of 2011 and as chairman of South Midlands Regional Branch for three years to 2008. He is also vice chairman of the Commercial and Contractual Committee and a former member of the Midlands Engineering Services Contractors Safety Group.

In his inaugural HVCA presidential address, Mr Shelley pointed to the power of the organisation: “We have at our disposal the strength, the resources and the expertise of an organisation that has honed its services, expanded its footprint and built its influence over more than a century.

“I see it as one of the principal objectives of my term of office to ensure, not only that it continues to fulfill these crucial roles, but also that we add even more value by helping members and their businesses to grow, to develop and to progress.

“We are already the premier organisation in our sector and I aim to do everything in my power to keep it that way.”

Indeed, at the end of his 12 months as HVCA president, Mr Shelley wants to see an even stronger and higher profile Association. This, he believes, can be achieved by looking at its internal operations as well as how it interacts with outside organisations and institutions.

So his priority is to help manage the change that the HVCA is currently undergoing. As he puts it: “The Association is fit for purpose at the moment, but I think it could be even fitter for purpose and still better positioned to serve the membership. “I am keen that the Association is the natural home for renewable technologies… and I want to attract new members that are, perhaps, only concerned with renewables in order to promote knowledge sharing.”

He also wants to raise the profile of the Association among two key groups in particular – stakeholders and members: “I want to see the HVCA name recognised more in the corridors of power… And the Association is active in so many areas – for example, the Construction Act review and PAS 90 – but people don’t necessarily associate us with important initiaitives... We have tended to hide our light under the bushel. I want this to change.”

Mr Shelley concludes: “I don’t regard it as revolution; rather, I see it as evolution. The building blocks we have in place already are very solid. I simply want to build on them.”

Argent in a nutshell

Bob Shelley joined London-based facilities management company Argent as senior project manager earlier this year. Founded in 1979, Argent has more than 200 clients at 300 locations in the capital and Home Counties.

The company’s clients in the public sector include hospital trusts, government buildings, museums, prisons, embassies, educational facilities, libraries and council offices. Among the private sector properties it works on are large residential buildings including mansion flats, tenements, offices, retail buildings and banks.

The company claims: “Our business is about creating better environments that give our clients and end users comfortable buildings to work or live in, that are efficient and deliver best value throughout the life of the building. Whether through engineering solutions, sustainability reviews or decommissioning strategies, we have built a reputation over 30 years for delivering solutions that ‘make a difference’.”

Argent boasts that it has never had a contract terminated early and all its public sector agreements have been renewed for the optional second phase. Services the company offers include:

• Systems maintenance
• M&E specification
• Plant refurbishment and installations
• Condition surveys
• Sustainability reviews
• Decommissioning reviews
• Risk assessments
• Computer-aided FM