00columnsThree columns that never merge
Mix them and the report becomes an opinion
Most cost arguments on a building site come from one habit: quoting a single number for a job that has three. The budget is what you set out to spend. The committed cost is what you have signed for. The forecast final cost is what the job is now expected to land at. They move at different speeds and for different reasons, so they get their own columns and stay there.
- What moves the budget?
- Almost nothing. A budget moves when you decide it does, in writing, usually because the scheme itself has changed shape. It is the line the funder holds you to, so it is not something a site meeting is allowed to nudge.
- What moves the committed column?
- An instruction, and nothing else. Not a quotation, not an e-mail saying go ahead when you can, not an item everyone agrees is inevitable. Until the instruction exists the item sits in the register as priced, and the report shows it as priced-but-uninstructed so you can see what is coming.
- What moves the forecast?
- Evidence. A tender return, an instruction, a measured remeasure, a risk that has closed or opened. The forecast is the honest column, so it is the one that moves most often, and every movement carries the reference that caused it.
Keeping them apart is what lets you answer the only question that matters in month nine: is the job still affordable, and if it is not, which of the three columns told us first.
01coverContingency, and who is allowed to draw it
Cover for the work still ahead, not a discount at the end
Contingency is money held back against things nobody could price at the time. It is not slack in the rates, and it is not a fund the contractor can reach into. It is drawn by instruction, item by item, each draw referenced to the change that caused it.
The useful test is not how much is left. It is how much is left against the part of the budget you have not yet committed. Half the allowance sitting against ten per cent of the work still to do is a different position from half the allowance against sixty per cent, and the first is the one that keeps people awake. The adder on the front page works exactly that figure.
The shape above is the shape, not your scheme. What it shows is the thing to look for: a staircase that drops early and steeply is telling you the ground or the design was carrying more unknowns than the cost plan admitted, and it is telling you in month four rather than month fourteen.
02monthlyWhat the cost report says, and in what order
Written for someone who was not at the site meeting
The cost report is two pages. The first page carries the three columns, the contingency position and the movement since last month with a reference against every movement. The second page is the change register in full, open items first. Nothing on either page is a surprise if you read the last one, because a movement cannot appear without the reference that produced it.
Order matters. The report opens with the forecast, because that is the number you will be asked about, and works backwards to explain how it got there. A report that opens with good news and buries the movement on page two is a report written for the author.
A worked movement, start to finish
An item is raised on site: the ground under two cores is softer than the investigation showed. It enters the register that day with the next reference, origin site condition, status raised. The engineer issues a revised foundation detail, the contractor prices it, and the status becomes priced. The cost report that month shows the figure as priced-but-uninstructed and flags the programme effect in weeks. You instruct it. The status becomes instructed, the figure moves into the committed column, the draw comes out of contingency, and the forecast is restated. Five lines in the register, one movement in the report, and every step traceable to a reference and a date.
Where a figure is still an estimate, the report says estimate on the same line. Where it is a quotation, it says quotation. In short, the report never asks you to guess what kind of number you are reading.
03cashflowThe money has to arrive before it is spent
A cost plan that ignores the calendar is half a cost plan
A scheme can be affordable and still fail on timing. Valuations fall due monthly, the contractor is entitled to be paid against them, and the funder releases against a drawdown profile agreed months earlier. If the works run ahead of that profile, you have a gap; if they run behind it, you may breach a condition of the facility.
So the cost plan is laid over the programme from the first month, and the two are reforecast together. When a change adds weeks, the cashflow is redrawn as well as the completion date, because a delay does not only cost time. It moves every valuation after it, and it can move the last one past the day the facility expires.
This is the point where cost tracking and programme stop being two jobs. They are read in the same monthly meeting, off the same register, by the same desk. Either way, you get one answer rather than two that disagree.