How to add the value in value engineering

Adding the ‘value’ in value engineering

Value engineering (VE) can be framed as a balancing act, maximising the benefit of a project while keeping costs in check. At its core, VE is about improving the ratio between outputs (functionality, longevity, sustainability) and inputs (capital, materials, energy). The challenge for the construction industry is to ensure this process enhances projects in line with clients’ stated values and priorities, rather than merely trimming budgets.

Designing with the end in mind

A successful project starts with clear client priorities. However, effective VE must always safeguard a building’s purpose and the people who use it.

Take, for instance, a developer planning a shopping mall with sleek but slippery flooring. If left unchecked, this decision could compromise public safety and require costly retrofitting later. This is why VE should be embedded from the outset; design teams must assess choices not just for immediate savings but for their long-term impact. The earlier these decisions are made, the greater the potential to positively influence outcomes.

Research cited by RICS⁽¹⁾ suggests that while clients and specialist consultants only account for 5% of a project’s cost, they can influence up to 65% of overall expenditure. Similarly, the design team, responsible for 10% of the budget, can influence 25% of total costs. This underscores why VE should be integrated from the earliest stages – when the ability to shape project outcomes is greatest.

At this point, setting a cost benchmark using historical data – such as from consultants’ or industry databases like BCIS – helps establish realistic financial parameters. For example, if a project team is evaluating whether to specify a steel or timber frame for an office building, BCIS data can provide cost comparisons based on historical projects, factoring in regional variations and inflationary trends. Similarly, for a school project, BCIS life cycle cost data can inform decisions about whether to invest in more durable cladding materials, balancing capital costs against long-term maintenance savings. As the design evolves, estimated costs can replace these initial benchmarks, ensuring that value engineering remains a dynamic tool.

Value is in the eye of the stakeholder

What constitutes ‘value’ is never universal. One stakeholder may focus on capital expenditure, while another prioritises long-term performance.

For example, opting for a lower-specification flat roof might reduce upfront costs by 25%. However, if this shortens the roof’s lifespan from 40 years to 25 years, the long-term owner-occupier faces increased maintenance and replacement costs. Conversely, a short-term tenant may be unconcerned.

And, increasingly, stakeholders are prioritising sustainability and need tools that will measure and report whole life carbon emissions.

Value engineering techniques, such as function analysis, help break down project elements into a hierarchy of priorities. A function tree, for instance, can visually map out how different decisions impact value – whether that’s specifying long-life materials, designing flexible office layouts, or future-proofing building services. Such tools can also help resolve conflicting stakeholder priorities.

Sustainability: An emerging priority

Increasingly, sustainability is a non-negotiable part of the VE equation. Whole Life Carbon Assessments (WLCAs) are becoming more common and, while the UK has yet to mandate them through Part Z of building regulations, regulatory pressure is mounting. A 2024 survey by consultancy RLB⁽²⁾ found that 33% of contractors were asked to provide WLCAs – more than double the previous year’s figure.

Failure to incorporate carbon into VE strategies risks leaving projects behind. Circular Ecology research⁽³⁾ suggests that embodied carbon can often be reduced by 10–20% at no additional build cost. But, as with financial costs, the ability to influence the carbon impact diminishes as a project progresses.

Energy-efficient materials, for instance, may carry a higher price tag but can deliver significant operational savings over time. Conversely, lower-cost materials that require frequent repairs or replacements may reduce overall value. Again, BCIS cost data can provide valuable insights here – for example, helping project teams compare the upfront cost of triple glazing versus standard double glazing alongside maintenance and energy efficiency savings over a building’s lifetime. The balance between cost and sustainability is becoming a crucial consideration in VE decision-making.

The lessons of 20 Fenchurch Street

Despite its origins as a post-war initiative to reduce waste, VE is often mistaken for mere cost-cutting. In some cases, this can have unintended consequences.

London’s 20 Fenchurch Street, better known as the Walkie Talkie, became infamous after its curved glass façade caused intense solar reflections, reportedly melting parts of a parked Jaguar and scorching nearby pavements. The architect who worked on the building⁽⁴⁾ suggested that countermeasures were included in the original design to avoid this happening but were later omitted. Retrofitting a brise soleil shading system is purported to have cost a relatively small fraction of the total development cost. While it’s unclear whether cost-cutting was a contributing factor, the case illustrates a fundamental value engineering principle: balancing budget constraints with long-term function and performance.

When VE works: The Jubilee Line extension

A more successful example of value engineering is the design of Canary Wharf station on the Jubilee Line extension. Glazed canopies reduced the need for artificial lighting and signage, and enhanced use of natural ventilation improved passenger experience – two measures which substantially reduced capital and running costs for the client.

Working with the site constraints in former West India Docks simplified many aspects of construction logistics. By draining the former dock area and building in an effectively open site, the project team was able to use less expensive and less technically complex ‘cut and cover’ excavation, avoiding the formidable risks which are always associated with tunnelling excavations in congested urban areas. Aside from saving money this also ensured greater certainty over the programme and reduced the project’s overall risk profile.

Moreover, the client’s prioritisation for potential capacity growth at Canary Wharf station meant that spending more money at the project outset on an extended 300-metre platform would enable future growth in passenger numbers without major modification or disruption to existing operations.

The Canary Wharf station exemplifies VE at its best, proving that effective value engineering transcends simple cost-cutting, enhancing functionality, reducing operational expenses, minimising risks, and accommodating growth, all in line with client values. When approached holistically, value engineering transforms constraints into opportunities, creating infrastructure that serves stakeholders for generations.

The Long View: Why VE is more than an accounting exercise

Infrastructure projects often face scrutiny over costs, and their long-term value can be harder to quantify. The Crossrail project (now the Elizabeth Line) overshot its budget by £4 billion, drawing criticism. However, with faster connections, increased economic activity, and improved passenger experiences, its broader benefits are becoming evident.

Conclusion

The costs and benefits of value engineering decisions often fall at different points in the supply chain, affecting stakeholders in different ways. Effective VE requires balancing these often-conflicting interests transparently to ensure that project value is delivered holistically.

At its best, value engineering is about doing more with less – fewer materials, less waste, less complexity – and the client’s values must guide every decision,

For now, cost will likely continue to be a dominant driver. However, as reporting requirements for whole life carbon gain traction, tools that measure both cost and carbon will become increasingly indispensable. Embedding VE principles from the outset makes it easier to strike this balance, creating value that extends beyond immediate budgets to benefit the range of stakeholders as well as the wider economy.

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^{(1) RICS – Value management and value engineering, 1st edition  - here}

^{(2) RLB – Procurement Trends Report 2024  - here}

^{(3) Circular Ecology – Embodied Carbon – The ICE Database  - here}

^{(4) DeZeen – “We made a lot of mistakes with this building” says Walkie Scorchie architect Viñoly  - here}