Why Early Cost Advice Changes the Whole Project

Early cost advice changes a project because the decisions that fix most of the budget are taken in the first few weeks, before a spade touches the ground. A cost plan at feasibility, produced before you buy the site or freeze the design, is the cheapest money you will spend on the whole scheme. It is also the last point where the number is still yours to move.

We have given that advice to developers, funds and private landlords across Greater Manchester since 1992, and the pattern barely changes. The projects that went over budget were rarely built badly. They were costed badly at the start, and by the time anyone had a real number the design had gone too far to change cheaply.

So what does "early" actually mean?

It means Stage 0 or Stage 1 of the RIBA Plan of Work, before the concept design is signed off and ideally before you have exchanged on the land. That is when a cost consultant produces an order of cost estimate, and it is the only estimate you get while every major choice is still open.

An order of cost estimate is built to the RICS New Rules of Measurement, the NRM1 rules the whole industry works to, off benchmark rates from sources like the RICS BCIS cost database and our own recent tenders. It is not precise. At Stage 1 you are working to a rate per square metre and a schedule of areas, not a bill of quantities, so the figure carries real uncertainty. What it does is tell you, before you commit, whether the building you want fits the money you have. That read is the heart of what our property consultancy does before a client signs anything.

Here is the part that catches people out. By the time the concept design is signed off, most of what the building will ever cost is already decided, even though the spend to that point is tiny. Footprint, number of storeys, structural grid, cladding, whether there is a basement: those are the big levers, and they are all pulled in the first few weeks. Everything after that is detail, and detail moves the number by single-digit percentages, not by halves.

Why is a change cheap now and ruinous later?

Because the cost of a change rises at every stage. Moving a wall on a Stage 1 sketch costs an eraser. Moving the same wall once it is drawn, coordinated, structurally designed and out to tender costs redesign fees, programme delay and, if the steel is already ordered, abortive work.

RIBA stage	Ability to change the cost	Cost of making a change now
Stages 0 and 1 (brief and feasibility)	Almost total	An hour of an adviser's time
Stage 2 (concept design)	High	A redrawn sketch, days not weeks
Stage 3 (spatial coordination)	Falling fast	Redesign fees across several consultants
Stage 4 (technical design)	Low	Reworked packages and programme slip
Stage 5 (on site)	Near zero	A variation, delay and often abortive work

We put real weight on the design freeze at the end of Stage 2 for exactly this reason. Everything a client wants to add is welcome up to that gate. After it, every addition has to be worth paying the change premium, and that premium climbs the further you are into the job. Fixing the number early is also what lets our project management team hold it once you are on site.

What does early cost advice actually cost me?

Usually between 1% and 3% of the build cost for full cost management across the job, and a small fixed fee for an early cost plan on its own. You are paying roughly 2% to protect the other 98%, and to find out on paper whether the scheme stacks up rather than on site.

There is hard evidence for why early numbers need discipline. The Treasury's own Green Book tells public bodies to add an optimism-bias uplift to early estimates, because projects are systematically underpriced at the start. Its upper-bound figures for buildings run to 24% on standard projects and 51% on non-standard ones. A private developer is not bound by the Green Book, but the human tendency it corrects for does not care who owns the project. An early estimate with a proper risk allowance, reduced as the design firms up, beats an optimistic single figure that everyone quietly treats as fixed.

Optimism is not a costing method.

If you are weighing up a site or a scheme right now and want a straight read on the number before you commit, our cost management and quantity surveying team can put a cost plan in front of you in days, not months.

Where does this bite hardest in Stockport?

In the older building stock and the ground under it. A large part of Stockport's commercial property is Victorian mill and mid-century town-centre office, solid brick with single glazing and original services, and the town sits in a steep river valley where the Goyt and the Tame meet to form the Mersey. Both facts turn into cost, and both are invisible until someone looks.

Refurbish one of those brick buildings and the abnormals are rarely in the part you can see. It is the incoming power that needs upgrading for modern plant, the floor that needs strengthening, the fabric work to drag an EPC up a band. Build new on a town-centre plot and the valley topography brings retaining walls and level changes, and on former industrial land you get made ground and contamination that a rate per square metre never captured. We price the ground before we price the building, because in this town the ground is where the surprises live.

There is a live reason this matters more now than it did five years ago. Stockport is in the middle of a regeneration worth well over a billion pounds, led by the Stockport Mayoral Development Corporation, and the new, efficient space coming forward around the station raises the bar for everything near it. A tired scheme costed on an optimistic day will look expensive beside that. A scheme costed honestly at feasibility can still be built to compete.

What would we do differently if it were our money?

Three things, and one of them will annoy some of our competitors.

First, we will tell you a scheme does not stack up before you have paid for a single drawing, and we will say it in the first meeting. Some advisers will not, because their fee grows with the project. That is the wrong incentive to have sitting across the table from you at feasibility, and we would rather lose the fee than watch you lose the deposit.

Second, on a complex or fast-track job we bring the contractor in early, through a two-stage tender or early contractor involvement, so buildability and price certainty arrive before the design is locked. That is not free. You give up some of the competitive tension a single-stage tender gives you, so on a simple, well-defined building it is the wrong call and a straight competitive tender will beat it on price. Match the route to the job, not to habit.

Third, we price the risk, we do not bury it. We learned the weight of that the hard way years ago. Early on we priced an office refurbishment off a rate per square metre and a walk round, without opening up the floor or checking the incoming supply. The tender came back a long way over the client's number, because the power needed upgrading and the floor needed strengthening for the new plant, and the client lost the best part of three months redesigning to a budget that honest early advice would have set on day one. We do not price a building off a walk round any more.

Early cost advice buys you the real number while you can still act on it. That is the whole value of it, and it is why we push clients to bring us in before the design is fixed, not after. If you are planning a build, a refurbishment or a purchase anywhere in Stockport, Greater Manchester or across the UK, talk to our team at Spring & Co or call us on 0161 476 4456.

Written by James Valentine, a director at Spring & Co, construction and property consultants working across Greater Manchester and the UK since 1992.