Insights

Using cost-led design to meet the budget

Applying a cost-led design approach to a project provides improved control of the budget and ultimately much greater certainty of project cost - but it requires the right technical expertise and knowledge of the construction process to be successful.

In delivering this approach you need to take a cost leadership position amongst the design and project team which is proactive and enables the design and budget to develop together.

In essence cost-led design is a cost management approach that seeks to reverse engineer the development appraisal and cost plan.

Conventional approaches to cost management see the cost manager cost the design at the end of each work stage. Symptoms of such an approach are reactive value engineering which can be product destroying and impact upon the programme.

Instead cost-led design challenges the design team to design to a cost and value by proactively setting out a number of elemental targets and metrics which the design team commit to achieving.

A cost-led design approach relies upon a level of design management from the cost manager who controls the project cost limit by proactively working with the designers to achieve elemental budgets. This also enables the offsetting of any risk of an overspend in one element, with a target reduction in another to deliver the project within the cost limit.

This proactive approach is supported by working with the expertise of the team and requires an excellent knowledge of the design and construction process, different methodologies, materials and modern methods of construction. In fact it helps with the early consideration of use of MMC as part of the construction strategy.

Cost-led design, as part of a cost management service, requires more time and resource, but it is an investment which is very much well worth making.

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Project: Mitre Wharf