March 4 2019

ADF Architects have shocked staff and clients by appointing administrators French Duncan, ending 30 years in practice with the loss of 27 jobs.

Former staff report that the insolvency came as a bolt from the blue, with the first indication that something may be wrong coming as late as January, when employees received just 65% of their salaries. Outstanding amounts were subsequently paid two days later, with the delay reportedly being attributed to the late payment of fees.

The true scale of financial difficulties only came to light on the 25 February, when staff say they were given a matter of hours to collect their belongings. Salaries, redundancy money and holiday pay are all still outstanding.

Headed by former RIAS president David Dunbar ADF was busy throughout Glasgow, working on a PRS project on the High Street, a student residential development in Partick and a mixed-use development at Glasgow Harbour.

In its most recent set of accounts for the year ended 30 April 2017 the directors maintained that the company had ‘… adequate resources to continue in operational existence for the foreseeable future’.

Brian Milne, partner at French Duncan, said: “The firm has had major cash flow problems this year and was unable to meet the wages bill in full at the end of January having had to pay the balance once funds had cleared. The company did not have sufficient funds to pay the wages at the end of February so decided that they could not continue trading.

“The main reason for the liquidation was the delay or mothballing of a number of significant projects. This is a common issue in the architecture profession where work can be commissioned and completed over a considerable period, but ongoing payments are not made and can be dependent upon the submission for planning permission. If payments are delayed or a project does not go ahead then the practice may not be paid, or the payment is delayed for a considerable time resulting in serious financial issues and cash flow problems.”

“We shall be disposing of the main assets of the business which consists of work in progress and debtors. Unfortunately, the business cannot be sold as a going concern as it is not viable. Any parties interested in acquiring these assets should contact me as soon as possible.”

Figures compiled by the Insolvency Service show that there were 84 insolvencies involving architecture or engineering related firms over the past five years.

Former employees are being asked to claim arrears from the Redundancy Payments Office.

11 Comments

#1 Posted by BigBadWorld on 5 Mar 2019 at 09:55 AM

Sorry for all staff at ADF, sounds like a horrible ending. Hope they go on to bigger and better things.

#2 Posted by MV on 5 Mar 2019 at 10:34 AM

Another example of Architects practices continually teetering on the brink of collapse. Speculative work… to get low fees… with clients taking months to pay invoices, if at all… when will the madness stop? Ultimately it’s the Architects, Technicians and Assistants that pay the price with excruciatingly low salaries to start off with (compared to Engineers PM’s QS’s etc), continual pressure to be more efficient, requiring to work longer hours with little or no assistance, and when the worst comes to the worst and the banks, notably those who were rescued with public money, screw you over... the company goes bust before pay day and the staff lose their jobs without pay and redundancy. We all need to come together and resist the spiralling decay of the profession. No speculative work and decent fee %’s would be a good start.

Good luck to those who have lost their jobs.

#3 Posted by SeeSea on 5 Mar 2019 at 13:14 PM

I hope French Duncan lists their biggest debtors. The sooner OJEU and archaic tendering processes stop, the better. Spread the word on bad payers too everyone - if clients don't think this happens widely they are mistaken. Scotland is a VERY small place. That said, firms 'buying' work is a downward spiral and all consultants need to stop the race to the bottom. In saying this I feel very sad for the ADF staff and Directors; I hope it works out for them all.

#4 Posted by land scout on 5 Mar 2019 at 14:22 PM

The horrific time it takes to get planning consents and all the hoops to jump through. Low levels of staff in Council Planning Depts and Building control Depts . Planners on part time not answering calls - these must contribute to the downfall .

#5 Posted by Cadmonkey on 5 Mar 2019 at 16:32 PM

#4 You are not wrong there.
I met with a planner regarding a simple application. He said "This all looks fine, but I have no idea how long its going to process. I've a huge workload, over 50 cases, so will just have to wait and see."
Meanwhile the RIAS sit on their thumbs. What do the RIAS ever do for their members about this kind of thing? Zilch.
You are on your ownio.

#6 Posted by David DUMBar on 6 Mar 2019 at 09:40 AM

If what’s reported here is true, not paying staff so close to the end of a month is shameful. These directors need to take responsibility for their actions. This happens all too often in the achitectural industry.

#7 Posted by Walt Disney on 6 Mar 2019 at 10:14 AM

#4 good point. It is pretty much impossible to get funding for a project without a planning consent. It can easily take £500k to get to a consent, all at risk to the developer, who may then try and spread the risk to the design team. This can work if there is a quick turn round, but if the process is elongated, you end up with serious cash flow issues for everyone. The majority of architects live hand to mouth, month to month so it only takes one stuck planning application and the loss of a couple of month's fees to take them down. Hardly surprising that my son was not interested at all in getting in to architecture after seeing what we go through.

#6 I think you will find that the directors will not have taken a penny out of the company for quite some time. Company law is quite prescriptive on director's responsibilities. Nontheless, having been on the end of receivership and having lost 3 months salary back in the crash, its pretty awful when you've got bills to pay and mouths to feed.

#8 Posted by MV on 6 Mar 2019 at 13:24 PM

#6
Its usually the salaries of the staff that ultimately make the company insolvent. It could have been best part of £100k. Add to that - payment to the tax man of the VAT from the invoices submitted (but probably unpaid by their clients), rent, suppliers etc... and kaboom. The banks are not interested in providing architects with overdrafts or loans to make it through - its too risky. Meanwhile, clients are still moaning that our fees are too high, whilst they are out buying castles in the south of france for their 4th holiday home...

#9 Posted by Walt Disney on 6 Mar 2019 at 15:47 PM

#8 Banks see overdrafts to architects as unsecured loans - as you say too risky, and architects invariably have very few assets. A few might have managed to buy their office through their pension fund, but the majority are only as good as their pipeline business, which can be precarious. You need to be able to demonstrate horsepower if you want to win business, but then you have a big wage bill to feed every month - fees or no fees.

You've got to wonder why anyone would get into it.

#10 Posted by Edward Harkins on 8 Mar 2019 at 08:57 AM

I add my own regret and commiserations to the others. Another costly example of what seem to be the inherent uncontrollable risk factors in architecture today - planning and payments.

#11 Posted by design guy on 14 Mar 2019 at 12:34 PM

I am involved in similar profession and as many note on here the current planning and warrant process in Scotland needs addressed by Scottish Govt ASAP in not only impacts developers but very often all members of the construction team.I know of 2 major projects where frustrated clients simply walked away from investing in Scotland .

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