How Club Boards Can Avoid Cost Blowouts on Capital Projects
Cost blowouts on club redevelopments are so common that many boards treat them as inevitable. They are not. The causes are predictable, and with the right approach, they are preventable.
Why Club Projects Go Over Budget
The standard explanation is "construction costs increased." But that is a symptom, not a cause. The real reasons are almost always decisions made — or not made — before construction started.
1. The Concept Was Never Costed Properly
Many clubs commission an architect to produce a concept design, present it to members for approval, and only then seek a detailed cost estimate. By this point, expectations are set, and the gap between ambition and budget becomes a political problem rather than a design one.
Prevention: Commission an independent quantity surveyor to cost the concept at the earliest possible stage — before it is presented to members. If the numbers do not work, it is far cheaper to redesign than to manage a blowout.
2. Staging Was an Afterthought
Maintaining club operations during construction is not optional, but it is expensive. Temporary walls, services diversions, phased demolition, and reduced access all add cost. When staging is not considered until the tender stage, these costs appear as surprises.
Prevention: Include staging as a design constraint from day one. The architect, quantity surveyor, and builder should all be briefing the board on staging costs as part of the feasibility assessment.
3. The Scope Changed After the Contract Was Signed
Club boards are committees. Committees revisit decisions. Every scope change during construction triggers a variation — a formal change to the contract that almost always costs more than the original scope item would have.
Prevention: Implement a formal change management process. Every proposed change should be assessed for cost, program, and approval impact before the board votes on it. The default position should be to hold the approved scope unless there is a compelling reason to change.
4. Variations Were Not Independently Assessed
Builders submit variation claims. Without independent assessment, the board has no way to verify whether the claimed amount is fair, whether the work was actually outside the original scope, or whether the program impact is genuine.
Prevention: Have every variation assessed by an independent advisor before it is approved. This single step can save clubs hundreds of thousands of dollars over the life of a project.
5. Contingency Was Spent Too Early
Contingency exists to cover genuine unknowns — not to fund scope changes. When contingency is treated as a slush fund for "nice to have" additions, the project runs out of buffer before construction is complete.
Prevention: Ring-fence contingency with clear governance rules. Define what it can and cannot be used for, and require board approval for any drawdown.
The Role of Independent Oversight
Every one of these cost drivers can be managed with independent oversight. An advisor who reports to the board — not the architect, not the builder — provides the financial transparency that club governance requires.
This is not about adding cost. It is about preventing the costs that arise from decisions made without independent advice.
What Should Boards Ask?
Before approving any capital project, every director should be able to answer these questions:
- Has the concept been independently costed?
- Is the staging strategy included in the budget?
- What is the contingency, and what are the rules for using it?
- Who will independently assess variations during construction?
- How will the board receive independent progress reports?
If any of these answers are unclear, the project is not ready for approval.
UpScale Project Management provides independent cost oversight for club redevelopments across NSW. Book a free consultation to discuss your club's project.