A project need not overshoot its budget

by
02 November 2006

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Building projects always go over budget, don't they? So how can we match that with our fund-raising?

IT IS not possible to go to outside funders and say: "Oh dear, we got our figures wrong, and we need more money." Even church members might look somewhat askance if asked for more than the budget. So what can be done?

First, the budget for fund-raising must be the entire budget for your project or building work. Get a good quantity-surveyor to work out an indicative budget. This will include a breakdown of all the works, with the cost of each clearly identified.

It will include headings such as preliminaries - this covers the cost of overheads such as scaffolding, insurance, facilities for workers, temporary works, and the person with a shovel who clears up after all the skilled workers. The budget should also contain a contingency sum that allows for some changes - often as much as 10 per cent.

Make sure that the quantity-surveyor also includes the full cost of VAT and professional fees, for these often are as much as 30 per cent on top of the building cost. This results in a realistic figure for fund-raising.

If you are undertaking a repair programme with help from the Joint Repair Scheme of English Heritage and the Heritage Lottery Fund, their first stage of the project examines the work very closely, and helps nail down the figure more realistically, to avoid costly surprises later.

The second discipline is then to ensure that, given a realistic and well-prepared budget, the professional team sticks to the budget and does not allow costs to drift above what was agreed at the beginning.

What might happen to make costs rise, so that you can anticipate problems?

As a project rolls out, there will be unplanned issues that relate to items that were not fully prepared, and turn out to be a little more expensive - either design or repair items. The client might be asked to choose fixtures and fittings that have a cost implication.

Taps for the sinks are a typical example. During the building work you might be asked which of two or three taps you want to have fitted. One or two are plain and functional and one or two may be more "designed". Before choosing, ask the price of each tap. If the taps cost £4 each and that is in line with your original budget, you are fine; but if you choose a £25 tap and there are going to be 20 or 30 in the new building, the budget is suddenly in trouble. Consider the same question for floor tiles, chairs, tables, and window frames. Always ask for the cost implication before choosing.

At the regular site meetings throughout the project, one person will represent the church. He or she can make it a point every time a change is made, for whatever reason, to ask where the saving will be made elsewhere in the project to offset any increased cost. That person might begin to sound like a broken record, always asking about the money and always insisting on keeping to budget, but it is the way that you can and will have a project that breaks the rule about always being more expensive than planned.

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