Cost overruns are one of the most common problems in construction. A 2023 survey found that over 70% of construction projects exceed their initial budget. In most cases, the root cause is inadequate cost planning — not unexpected site conditions, not labour shortages, not inflation. The foundations of a well-managed project are always laid in the cost plan.
What Is a Construction Cost Plan?
A cost plan is a document that estimates the cost of a construction project at a particular stage of design. It is not a fixed price (that comes later, when contractors tender for the work) — it is a professional estimate based on the information available at the time, used to set the budget and guide design decisions.
A good cost plan does three things:
1. Tells the client what the project is likely to cost
2. Identifies where the money is being spent (allowing value engineering)
3. Provides a baseline against which future cost changes can be measured
RIBA Stages and Cost Planning
Cost planning follows the RIBA Plan of Work stages:
Stage 0–1 (Strategic Definition / Preparation): Order of magnitude estimates, often produced per square metre. Used to test feasibility and establish a budget.
Stage 2 (Concept Design): Elemental cost plan. The project is broken down into building elements (substructure, frame, roof, external walls, etc.) and a cost per element is estimated. This is the critical stage for budget-setting.
Stage 3 (Spatial Coordination): Detailed cost plan. As the design develops, costs are refined. Significant changes in scope or specification should trigger cost plan updates.
Stage 4 (Technical Design): Pre-tender estimate. The project design is essentially complete and the cost plan reflects the detailed specification. This should be close to what contractors actually tender.
Stage 5 (Construction): Contractor tenders are received and compared to the pre-tender estimate. The project then moves into construction cost management.
The Elemental Format
Quantity surveyors typically produce cost plans in an elemental format, which breaks the project down into standard building elements. The standard elements follow BCIS (Building Cost Information Service) conventions:
This format allows meaningful comparison between projects and identifies where costs are disproportionately high relative to benchmarks.
Benchmarking Against BCIS Data
The BCIS publishes cost data from thousands of UK construction projects, giving quantity surveyors access to current market rates and elemental cost benchmarks. When producing a cost plan, we compare our estimates against BCIS data to sense-check the figures and identify any elements that may be under- or over-estimated.
Benchmarking is particularly valuable at Stage 2, when the design may not be sufficiently developed to produce detailed quantities. Cost per square metre rates, combined with elemental benchmarks, allow a credible estimate to be produced even from outline information.
Contingencies and Risk
No cost plan should be presented without adequate contingency allowances. Contingency reflects the risk inherent in the project at the point of cost planning — and it reduces as the design develops and uncertainty decreases.
Typical contingency allowances:
Contingency is not a slush fund — it is a quantified allowance for known unknowns. In addition to contingency, clients should understand the risk register for their project and hold appropriate risk funds.
Value Engineering
Value engineering (VE) is the process of reviewing the design to achieve the same function at lower cost, or greater value at the same cost. A good quantity surveyor identifies VE opportunities proactively as part of the cost planning process.
Common VE interventions include:
How Volarex Approaches Cost Planning
Our cost planning service is built on current market knowledge and BCIS data. We produce cost plans that are transparent, well-reasoned, and genuinely useful — not just a number on a page. We explain our assumptions, identify risks, and update the cost plan as the design progresses.
Contact us to discuss your project and how we can help you take control of your construction costs from day one.