Difference between cost plan and budget
A budget is a statement of the amount of money available to spend over a period of time, or on a specific thing, such as a building. The budget is set by the client (although they make seek help to do this). It may include an outline plan for how that money will be spent, and a breakdown of the items it will be spent on. Budgets set a limit for expenditure and this can help determine what is affordable. They should be set as early as possible so that expectations can be managed. It is important that they are based on evidence and that they are realistic, rather than simply stating the amount of money available, or being a wild guess, because, once the budget is set in people's minds, it can be very difficult to change.
For more information see: Budget.
Cost plans are typically prepared by a cost consultant and provide an estimate of what the actual costs are likely to be. Cost plans evolve through the life of the project, developing in detail and accuracy as more information becomes available about the nature of the project. They can range from very early initial cost appraisals through to tender pricing documents and the final account. If the cost plan exceeds the budget, it may be necessary to reduce the cost or scope of the project.
For more information see: Cost plan.
 Related articles on Designing Buildings Wiki
- Capital costs for construction projects.
- Construction costs.
- Cost control.
- Cost plans for construction projects.
- Difference between collateral warranties and third party rights.
- Difference between preliminaries and preambles
- Elemental cost plan for design and construction.
- Final account.
- Outturn cost.
- Quantity surveyor.
- Tender pricing document.
Featured articles and news
PCSAs enable clients to employ contractors before the main contract commences. Read our introductory article.
ICE 200 brings together transformative projects from the past 200 years - and the engineers behind them.
Dame Judith Hackitt hosts an industry summit to kick start the second phase of the review.
This article explains the Buildings Regulations completion certificate, what it is, and when its needed.
Graphene has many potential applications, but when will it start being used in civil engineering?
Increasing productivity – now more than ever as we lead up to Brexit – should be the sector’s number one priority in 2018.
Carillion's collapse causes Construction Leadership Council to delay the construction sector deal report.
Urban Heritage, Development and Sustainability: international frameworks, national and local guidance.
What will the General Data Protection Regulations (GDPR) mean for you when they come into force in May?
Business Secretary chairs a new taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation.
Sir John Armitt is appointed the new chair of the National Infrastructure Commission.
High quality and high density homes - is it what we need or is it storing up trouble?