The value of everything: the value of architecture lies in the outcomes it enables, rather than the price of construction.

'Well, nobody over five years old should expect to get everything they
want.'
--Ralph Tubbs

One of the joys (some might say compensations) of being a quantity surveyor is that you get to work with a succession of architects. It was my good fortune that the first of many that I worked with was Ralph Tubbs. I learnt a lot from him, but the equanimity with which he accepted the advice of a young surveyor, that a design proposal simply couldn't be accommodated within the budget, was in many ways a poor preparation for the subsequent realities of a quantity surveyor's daily lot. For rarely since has it been possible to cross so peaceably that gap between desires and needs, between art and commerce, between dream and reality.

[ILLUSTRATION OMITTED]

This gap has a cultural dimension to it, as real today as it was when CP Snow wrote about the disconnected world of science and the humanities nearly half a century ago; and the difficulty of finding common ground between two quite different ways of looking at the world remains all too apparent. I believe that the best bridge across this communications gap lies in a consideration of the value that can be created by good design. Many businessmen would ask what design (good or otherwise) has to do with the bottom line; many architects will ask plaintively, 'Why does it always have to be about money? Whatever happened to poetry?' The answer is that poetry is alive and well, but architecture is not a lone art, practised in a garret. It is commissioned, for a fee, and usually by clients with a lively and necessary interest in economics.

Economics concerns itself with the allocation of finite resources in a world of infinite wants. Economy is therefore the satisfaction of wants, the fulfilment of a client's purpose, through the minimum consumption of resources. This can, with a sufficiently broad definition of 'finite resources', be re-characterized as sustainability; thus, at a stroke, mean-minded penny-pinching becomes honourable social responsibility--and so perhaps more palatable. Whatever it is called, though, it requires a clear understanding of purpose so that economics can be mobilized as servant, rather than master. It also requires the humility, or perhaps just the commercial nous, to recognise that the purpose that must be served above all is the client's.

Applying economics to architecture

Returning to Ralph Tubbs, he is perhaps best remembered now for the Dome of Discovery (part of the 1951 Festival of Britain) and for the later Charing Cross Hospital. They are unlikely stable-mates stylistically, and they had quite different purposes, but both were shaped, it seems to me, by rigorous attention to one creed: what is right for this client, in this place, and at this time? This leads on to a broader application of economics to architecture, which lies in the concept of value for money. A building can create value for its owner, and for those otherwise affected by it (those we are now encouraged to call 'stakeholders'), in several ways. They are not, however, well understood, and too often projects are driven by one aspect of value only. This is exchange value--the amount for which an asset can be sold in the marketplace, which must obviously exceed the cost of creating it if the undertaking is to be worthwhile. This is the imperative of the commercial developer, and understandably, architects may feel that it involves a search for the lowest common denominator. But even in this hard-nosed environment, good architecture can increase investment returns, possibly because the quality of a design encourages the regulatory authorities to grant consent for a building which might otherwise have been made smaller or not have been permitted at all.

[ILLUSTRATION OMITTED]

There is also evidence that occupiers, and some developers, will pay more for a design which enhances the image of their company. This is about brand value. Just as companies can differentiate themselves by the quality and design of their products, so they can with the quality and architecture of their buildings; architecture can convey powerful messages to both internal and external audiences about the culture and values of the occupier. What those messages may be is a decision for the occupier alone, and may range from frugal conservatism through to an extravagant demonstration of success; but how those messages are conveyed is a matter of design.

Just as companies need to compete for survival and prominence, so now do cities, and the idea of brand value expands to something closer to civic value. Here, good urban design (not the architecture of buildings themselves but the public realm that surrounds them) may go beyond the generation of civic pride and delivery of a symbol for the city. Good urban design can contribute to a sense of well-being, and even to a lessening of crime and anti-social behaviour, thereby reducing the financial burden on government--building on civic value to create social value.

Herein lies the clue to real value--which is that it should be measured not in terms of short-term capital expenditure against short-term monetary returns, but rather in the contribution that it represents over the whole life of the building. This concept of whole life value covers two separate categories of costs and returns: life-cycle value and operational value. The first of these compares the cost of running a building with its capital cost, where the running costs will almost always outweigh the capital cost by a ratio that will vary, but which might typically be 2:1. Operational cost, by contrast, is the cost of running all of the operations that take place in the building--whether it be a business, a hospital, a school etc. This will principally comprise salaries (typically 70 to 80 per cent of whole life cost); the ratio of these costs to initial capital cost, although it too varies, might typically be 20:1.

The typical ratio of initial capital cost to running cost to operational cost is therefore 1:2:20--and it is the highest of these numbers that should determine how money is invested in a building, whereas too frequently it is the lowest which dominates. Once again, the key is purpose: not outputs, and still less inputs, but desired outcomes. So school design should be judged as an aid to educational outcomes, rather than simply by the economic provision of desk spaces; hospital design should be judged on its ability to improve clinical outcomes, rather than by the economic provision of bed spaces, and so on. This is not to claim simplistically that 'well designed hospitals make you better', but rather to explore all the ways that a building might support the people who do make us better; aiding the efficiency and effectiveness of an undertaking's most costly resource--its people.

Client's true purpose

It follows that at the heart of the briefing process, one should find an investigation of the client's true purpose in commissioning the building, and his or her own measures of value--that is, how the client will measure success. Asking clients about their own units of value also opens up a dialogue about the contribution that good building design can make to their enterprise; a consideration that might otherwise be neglected. Experience suggests that this leads to a focus on what really matters to the client, which may well lead them to new conclusions about their building project, its design and its cost.

More than 500 years ago, looking around him with approval at the opening of the new cathedral at Pienza (his home town), Pope Pius II remarked to his architect Bernardo Gambarelli, 'You did well, Bernardo, to lie to us about the cost'. There is evidence that not much has changed in the centuries since, and that many great construction projects (and public projects in particular) make it off the ground only because of a serious underestimate of their cost. This is sometimes the subject of deliberate falsehood, sometimes unwitting--but it is always the consequence of clients and their designers having no trusted way of bridging the divide between how little could be spent and how much should be spent.

The concept of design value--the sum total of all of the approaches to value outlined above--provides at least the foundations of such a bridge. This means that cost and the generation of value should be regarded as part of the challenge of the business of architecture; indeed, achieving value should be treated as part of the definition of good design, rather than 'money' being regarded as an enemy to be defeated by fair means or foul. Having established trust through demonstrating a commitment to taking care of the client's money in this way, the architect might say, (as I have heard one say) 'I don't know why you should do this, I just believe very strongly that you should'; and the client might just agree--as not everything that counts in life can be measured, still less measured in money.

This article draws from a public lecture given at the Berlage Institute, Rotterdam. Paul Morrell is a partner of Davis Langdon LLP, serving as senior partner 1998-2003, and is a commissioner at the Commission for Architecture and the Built Environment (CABE)