Life cycle costing: evaluating its use in UK practice

Abstract

Purpose – The purpose of this paper is to establish the extent to which life cycle costing (LCC) is used as an early stage project evaluation tool by practitioners in the UK construction industry. The use of this evaluation tool has long been advocated by academics as a means of ensuring best value rather than lowest cost is a driver for business decisions related to potential built environment projects. Therefore there is a need to appraise its current uptake levels amongst built environment professionals and assess whether there are any barriers affecting its use in UK practice. Design/methodology/approach – Using a mixed methods approach, the authors present the findings from a survey of construction professionals located in the UK and the results from a series of follow up semi-structured interviews designed to further explore the factors found to affect the use of LCC in practice. Findings – The study shows that LCC is still not widely used by built environment professionals in the UK. The greatest inhibitor on the take up of the tool is the need of clients to budget on short-term horizons. Other factors such as a lack awareness of the tool by practitioners and clients, unreliability of data into the long term and the overriding need for commercially driven projects to achieve maximum return on investment continue to inhibit the widespread adoption of LCC as an early stage project evaluation tool. These findings have implications for the capability of the UK construction industry to deliver on its commitment to enhance the sustainability of the built environment. Originality/value – The paper offers insights into the current use of LCC and the factors affecting its use in the UK.