Risk Register (Initial)

Section 1

Purpose

The Risk Register at RIBA Stage 2 is the first formal, structured risk management document prepared for the project. It translates the risk allowance carried within the Stage 1 Order of Cost Estimate into an itemised, scored register showing each identified risk's probability, financial impact, Expected Monetary Value (EMV), RAG status, risk owner and response strategy.

The QS owns and maintains the cost risk register throughout the project lifecycle, updating it at each RIBA design stage gateway. The register feeds directly into Cost Plan 1: the sum of all risk EMVs constitutes the risk allowance, which is carried as a separate provision distinct from the design contingency. This distinction is fundamental to transparent cost management under RICS professional standards.

The RICS Management of Risk (1st edition, 2020) and NRM 1 Section 3.6 both require the QS to identify, quantify and respond to cost risks in a systematic manner. The Risk Register is the audit document that demonstrates compliance with these obligations.

Section 2

Key Principles

RICS Management of Risk (1st edition, 2020): the primary RICS guidance note for risk management methodology in construction, covering risk identification, probability-impact assessment, EMV calculation and response strategies.
NRM 1: Order of Cost Estimating and Cost Planning (2nd edition, 2012), Section 3.6 — Risk and Contingencies: requires the QS to separate design contingency (for undefined design development) from risk allowance (for identified, quantified risks).
ISO 31000:2018 — Risk Management: Guidelines: international standard defining risk management principles, framework and process used as the basis for RICS guidance.
HM Treasury Green Book (2022): mandates quantified risk assessment (QRA) for public sector projects, requiring probability-weighted cost estimates and Monte Carlo analysis for major schemes.
Construction (Design and Management) Regulations 2015 (CDM 2015): requires design-stage hazard and risk identification — links directly to the design risk register maintained by the Principal Designer.
RICS Conflict Avoidance and Dispute Resolution (guidance note, 2021): thorough risk documentation reduces the likelihood of disputes arising from unmanaged or unallocated risks.

Section 3

Practical Application

Step 1

Review the Stage 1 risk log and OCE risk allowance. Carry forward unresolved Stage 1 risks and update their status. Document which Stage 1 risks have been resolved and why.

Step 2

Categorise all risks systematically. Standard QS risk categories at Stage 2: Design (incomplete/changing design information); Planning & Statutory (planning conditions, building regulations); Site & Ground (ground investigation findings, contamination, services); Procurement (market conditions, contractor availability, material prices); Client (brief changes, approval delays, funding); Programme (design delays, lead times); Regulatory (CDM, fire safety, sustainability).

Step 3

Establish calibrated probability and impact scales for scoring consistency. Probability: Very High 75–99%; High 50–75%; Medium 25–50%; Low 5–25%; Very Low <5%. Impact (£): scored 1–5 against financial thresholds relative to construction budget.

Step 4

Score each risk: assign probability (%) and impact (£). Calculate EMV: EMV = Probability (%) × Impact (£). For example: a 40% probability of a £200,000 ground risk = £80,000 EMV.

Step 5

Assign RAG status to each risk based on the combined probability × impact score: Red = high probability (>50%) OR high financial impact (>5% of construction cost); Amber = medium (25–50% probability AND 2–5% impact); Green = low (<25% probability AND <2% impact).

Step 6

Assign a risk owner to each item. At Stage 2, risks are typically owned by: Client (funding, brief changes, programme delays); Design team (design risk, specification changes); QS (cost risk); Future contractor (site/ground risk post-contract, procurement risk). Document the transfer mechanism for contractor risks.

Step 7

Record the response strategy for each risk: Avoid (eliminate the risk source); Reduce (mitigate probability or impact); Transfer (to contractor, insurer or third party); Accept (acknowledge and carry in risk allowance).

Step 8

Sum all EMVs to derive the total risk allowance. Cross-check against the risk allowance in Cost Plan 1. Issue the Risk Register as an appendix to Cost Plan 1 and maintain as a live document updated at each stage gateway.

Section 4

Common Mistakes to Avoid

Conflating risk allowance (EMV-based, item-by-item) with design contingency (an overall percentage for undefined design development) — they are distinct provisions with different purposes and must be reported separately.
Failing to assign a specific, named risk owner to each risk item — without ownership, risks are not actively managed and response strategies are not implemented.
Using uncalibrated probability and impact scales — inconsistent scoring across risks renders the RAG status meaningless. Agree scales at project inception and apply consistently.
Treating Red risks as resolved once a mitigation action is identified — risks must be re-scored after mitigation to reflect the residual probability and impact.
Failing to update the register at each stage gateway — a Stage 2 register that is not reviewed at Stage 3 provides no ongoing audit evidence of risk management.
Including contractor-held risks in the pre-contract client risk allowance without a clear transfer mechanism — overstates the client's risk exposure and distorts the EMV total.

Section 5

APC Competency & Quick Reference

APC Competencies: Cost Management (L2) | Design Economics & Cost Planning (L2) | Legal & Regulatory Compliance (L1) | Programming & Planning (L1)

What is the difference between risk allowance and design contingency?

Risk allowance is an EMV-derived sum calculated item by item (probability % × impact £) for identified, named risks. Design contingency is a percentage uplift applied to cover unknown and unquantified design development — typically 10–15% at Stage 2. Both must be carried as separate line items in Cost Plan 1.

How is RAG status determined in a cost risk register?

RAG is based on the combined probability-impact score: Red = high probability (>50%) or high financial impact (>5% of construction cost); Amber = medium (25–50% probability and 2–5% impact); Green = low (<25% probability and <2% impact). Scales should be calibrated at project inception.

Who owns the risk register on a QS-led cost management appointment?

The QS prepares and maintains the cost risk register. Individual risk items are owned by the appropriate party: client risks (client); design risks (architect/engineer); cost risks (QS); site, procurement and construction risks (contractor once appointed). Ownership determines who implements the response strategy.

Section 6

Risk Register Checklist

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Stage 1 risk log reviewed and resolved/live risks documented

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Risk categories defined (Design, Planning, Site, Procurement, Client, Programme, Regulatory)

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Probability and impact scales established and documented

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EMV calculated for each identified risk (Probability % × Impact £)

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RAG status applied using agreed probability-impact matrix

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Risk owner assigned to each risk item

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Response strategy recorded for each risk (Avoid/Reduce/Transfer/Accept)

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Total EMV cross-checked against Cost Plan 1 risk allowance provision

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Risk Register issued as appendix to Cost Plan 1

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Review frequency agreed (minimum: each RIBA design stage gateway)

Section 7

CPD Learning Outcomes

Prepare a project cost risk register in RICS-compliant format, applying EMV calculations, calibrated probability-impact scoring and RAG status to identified Stage 2 risks.
Distinguish between risk allowance (EMV-derived, item by item) and design contingency (percentage-based) in Stage 2 elemental cost planning, and carry each as a correctly identified separate provision.
Apply the RICS Management of Risk framework to identify, categorise, score, assign ownership and respond to cost risks at RIBA Stage 2 Concept Design.

Section 8