The five-part structure
Only 2 pages are needed, provided a fixed order is followed. The note is prepared by whoever follows cost for the client, the designer or an appointed professional; the client signs it.
The gap, dated. Works budget, current estimate, difference in euros and as a percentage, all net of VAT and at the same price date, with the reference of the estimate and of the design stage. If the dates do not match, the note says so and states which update has been applied.
The causes, apportioned. The gap is broken down into three parts: prices, quantities, brief. The three parts must add up to the total gap; any unexplained part must be declared as such. The diagnosis method is described in The estimate exceeds the budget: what to do before awarding the works.
The options, from 3 to 5. Each option states the estimated saving, the risk or loss of quality, the effect on the design timetable and on the programme, and who has to do what to implement it. Fewer than 3 options give no choice; more than 5 scatter the decision.
The decision. Which options are adopted, the new expected estimate, the remaining margin against the budget and, if the gap is not fully absorbed, how it is covered: an increase in the budget, a further reduction at a later stage, an explicit decision to forgo.
The record. Date, the client's signature, recipients, and the designer's commitment to produce the estimate for the revised design by a deadline. Once signed, the note becomes the new basis for the design and the budget.
What to write in the options table
The table has one row per option and 5 columns. The table format forces every option to be treated the same way and stops the preference of one participant from prevailing out of habit.
| Column | Content | Mistake to avoid |
|---|---|---|
| Option | Short, precise description of the change | "Optimise the finishes" without saying which |
| Estimated saving | Amount in euros, excluding VAT, at the estimate date | Saving not quantified, or taken from a supplier's quote without checking |
| Risk or loss | What the client loses in quality, use, value, maintenance | Options presented as having no consequences |
| Effect on timing | Time to revise the design, effect on the works | Ignoring the redesign time |
| Owner | Who implements it: designer, client, appointed professional | Options with no owner, which stay on paper |
The mistakes that make the note useless
- Using the contingency to close the gap. The contingency covers real uncertainties; including it among the options means moving the problem to the site. The note keeps the contingency out of the calculation, as explained in How much to set aside for contingencies, stage by stage.
- Adding up savings that do not add up. Two options may affect the same item: reducing an area and changing the finish of that same area do not give the sum of the two savings. The note flags the overlaps.
- Deciding without signing. A decision taken in a meeting and not signed is not a contractual basis: at the first difficulty, everyone remembers a different version.
- Not redoing the estimate. The savings in the note are estimates. Only the estimate for the revised design, on the same basis, confirms that the design is back within budget.
An entirely fictitious example
The following example is invented and serves only to show the structure and the calculations. A private client is having premises built for its business. The works budget, written into the appointment, is 800,000 euros, excluding VAT, at January 2026 prices. The estimate for the design submitted for the building permit, at the same price date, is 920,000 euros.
Gap: 920,000 - 800,000 = 120,000 euros, equal to 15 per cent of the budget (120,000 / 800,000). Causes: 30,000 euros from prices (some works estimated at higher prices than those assumed in the budget), 40,000 euros from quantities (structures heavier than expected at feasibility stage), 50,000 euros from the brief (a basement storage level added during design at the client's request). Total: 30,000 + 40,000 + 50,000 = 120,000 euros, with no unexplained part.
| Option | Estimated saving | Risk or loss | Effect on timing | Owner |
|---|---|---|---|---|
| A. Reduce the basement to half its area | 45,000 euros | Less storage space | Structural revision, 3 weeks | Designer |
| B. Standard finishes in service areas | 35,000 euros | Lower quality in rooms not open to the public | Specification update, 1 week | Designer |
| C. Defer external works to a second phase | 30,000 euros | Spending deferred, not removed; second phase probably more expensive | None on the main design | Client |
| D. Review the structural solution for the roof slab | 20,000 euros | To be confirmed by calculation | Structural revision, 2 weeks | Designer |
| E. Forgo the photovoltaic system | 25,000 euros | Higher running costs | None | Client |
Decision: options A, B, C and D are adopted, for an estimated saving of 45,000 + 35,000 + 30,000 + 20,000 = 130,000 euros. Options A and D both affect the structures: the designer confirms that the two savings concern different parts and can be added together. New expected estimate: 920,000 - 130,000 = 790,000 euros, with a margin of 10,000 euros below the budget. Option E is rejected. The contingency, provided for separately in the total project cost, is not touched.
Record: the note is signed by the client and sent to the designer, who undertakes to deliver the revised design and the new estimate within 6 weeks, on the same price basis. If the new estimate exceeds 800,000 euros, the note is reopened starting from option E.
This article describes a working method as at 21 October 2026 and is intended for guidance; the example is fictitious. It does not replace professional advice or an examination of the specific case.