Sometimes a great notion...

The late James Nisbet’s invention of the elemental cost plan followed that trajectory fairly closely. These days, it is essential to any complex building: it enables the project team to have a disciplined conversation about cost, it makes benchmarking possible by making similar but different buildings comparable, and it allows anything with a cost implication to be related back to a single document. In other words, it’s completely obvious. The weird thing is that this never struck anyone before.

As our obituary of Nisbet recalls, the RICS greeted the proposal with outrage and formed a committee to strangle the baby at birth; after that failed, the idea spread rapidly through the UK industry and shortly afterwards conquered the world. Ironically, the RICS’ Building Cost Information Service became the true inheritor of Nisbet’s legacy, and Joe Martin, its executive director, points out that nobody in any country had thought of it before.

One reason Nisbet is remembered so fondly by so many QSs is that the cost plan transformed their role from that of a measurer to a manager. Before it, the QS’ job was to cost a design by taking the architect’s drawings and calculating a bill of quantities. After it, the architect’s job was to design to the cost that the QS had laid down. This put the profession next to the client, and made them into the figures of awe and terror we know so well today.

The reason Nisbet’s idea was taken up so quickly was that the government in the fifties and sixties was engaged in a grand expansion of public services just as novel technologies were coming into general use. All those schools, universities and hospitals with their cladding systems, prefabricated modules and complex services would have been all but impossible to cost in the old way. What’s more, the work was taking place against a background of regular stirling crises and stop–go public spending. The elemental cost plan played an invaluable role in making what money there was go as far as it could.

Clients believe, reasonably enough, that prices fall in a recession, sometimes by as much as 30% in three years, and are quite prepared to shop around until they find a QS that agrees

These days, we’re in the process of replacing or renewing those early Welfare State buildings against a considerably darker economic background, and sadly the limitations of Nisbet’s excellent invention are only too apparent.

The reason is that a cost plan is only as useful as the information that is fed into it is accurate, and there’s little consensus about how much the factors of production will cost in a year or so’s time.

Clients believe, reasonably enough, that prices must fall in a recession, and some are projecting a drop of 30% over the next three years. Unfortunately, these developers, departments, agencies and councils are quite prepared to shop around until they find a QS that agrees with them and draws up a cost plan accordingly. The contractors are, equally reasonably, terrified of tying themselves into a three-year project based on those cost assumptions. For one thing, there are some surprising signs that housebuilders are dehibernating, which will tend to bid up the price of labour just as the last Pole arrives back in Warsaw. For another, there is extraordinary volatility in the prices of energy, basic raw materials and the pound. The result is that unless both sides are prepared to compromise on what constitutes a guaranteed maximum price, both will lose out. Now that really is obvious.

Denise Chevin, editor