Life-cycle costing

News

01 November 1986

One of the most difficult aspects of life-cycle costing is to define the life of the building. When the building life is assessed to be over 40 years, the precise life is not critical for the purpose of life-cycle costing. In cases where calculations are based on a relatively short building life, say 20 years or less, the assessment of the time horizon must be assessed with special care. The guide points out that buildings usually end their “life” before the end of their physical life. The most common reasons for buildings becoming obsolete are probably for economic and functional considerations. Buildings designed for a specific specialised use, with little or no flexibility for changing their use, are therefore likely to have shorter lives than buildings offering flexibility for the change of function of the building.

Some £45bn is spent each year in the UK on building and infrastructure maintenance and building-related energy, cleaning, rates and insurance costs. Lifecycle costing will show where substantial savings in these costings can be made by selecting the right design options in constructing or altering buildings, says Tony Southgate, president of the RICS QS Division. As an example, Mr Southgate quotes how the Department of Energy has identified potential savings of £35m in building-related energy costs. It has also shown that considerable savings can be made by replacing old, underused, schools with new smaller, energy efficient ones on the same site. “Potential homeowners,” adds Mr Southgate, “should also consider future running costs when buying a home.”

(*) A guide to life-cycle costing for construction. Surveyors Publications, 12 Great George Street, London SW1P 3AD. £3.95.

The introduction of life-cycle costing for buildings can result in substantial savings in future running costs, according to a new guide produced by the RICS.(*) The life-cycle cost of a building is defined as the present value of the total cost of the asset over its operating life, including initial capital cost, occupation costs, operating costs and the cost or benefit of the eventual disposal of the asset at the end of its life. Life-cycle cost techniques take into account, during the design and management of construction projects, the total costs that the project will impose on the client during the whole of its life. The objectives of life-cycle costing, the guide explains, are “to enable investment options to be more effectively evaluated, to consider the impact of all costs rather than the initial capital costs, and to assist the effective management of completed buildings or projects.” One of the most difficult aspects of life-cycle costing is to define the life of the building. When the building life is assessed to be over 40 years, the precise life is not critical for the purpose of life-cycle costing. In cases where calculations are based on a relatively short building life, say 20 years or less, the assessment of the time horizon must be assessed with special care. The guide points out that buildings usually end their “life” before the end of their physical life. The most common reasons for buildings becoming obsolete are probably for economic and functional considerations. Buildings designed for a specific specialised use, with little or no flexibility for changing their use, are therefore likely to have shorter lives than buildings offering flexibility for the change of function of the building. Some £45bn is spent each year in the UK on building and infrastructure maintenance and building-related energy, cleaning, rates and insurance costs. Lifecycle costing will show where substantial savings in these costings can be made by selecting the right design options in constructing or altering buildings, says Tony Southgate, president of the RICS QS Division. As an example, Mr Southgate quotes how the Department of Energy has identified potential savings of £35m in building-related energy costs. It has also shown that considerable savings can be made by replacing old, underused, schools with new smaller, energy efficient ones on the same site. “Potential homeowners,” adds Mr Southgate, “should also consider future running costs when buying a home.” (*) A guide to life-cycle costing for construction. Surveyors Publications, 12 Great George Street, London SW1P 3AD. £3.95.