The case for Centres of Excellence in sustainable building design

cost, so that there is likely to be a net social gain due to the reduction in energy
use over the lifetime of a building. We are not assuming an overall increase in
carbon abatement, but rather that the carbon abatement continues happening
at the same rate as the BAU scenario.
None of the learning effects or the knock-on effects in academia, such as the
benefits of an increased research base, are being quantified here. We model a
fixed quantity of graduates leaving a fixed number of universities. We also model
a fixed abatement ability of each graduate.
Education costs
We assume that the project consists of four Centres of Excellence, each with a
graduating cohort of 60 engineering students and 150 architects. This analysis
considers only the contribution to society of the engineering graduates who have
benefited from an enhanced education in building physics and integrated design.
Thus we are apportioning the full start-up cost of the centres over the numbers of
engineering graduates.
Over a five-year duration, the cost of running the four centres is £30 million. It
is assumed that £10 million of this will fund research at the centres that would
otherwise be funded and carried out elsewhere. This leaves an extra over cost of
£20 million for teaching undergraduates at the four centres over five years or £4
million per year as the marginal cost of educating the graduates. Although the
Centres are initially only funded for five years, they will continue to require the
same operating costs throughout the analysis period and this is still a cost to the
UK even though these future costs are likely to be met from industry and the
undergraduates themselves as demand rises.
We assume there are no marginal ongoing training costs after graduation as all
engineers are expected to undertake continuing professional development.
Employment costs
We assume that the starting salary for a typical engineering graduate in the
construction industry is £25,000 (BAU scenario) and there is a 10% premium
on this for a graduate from a Centre of Excellence (project scenario), making
the marginal cost £2,500 in the first full year of employment. We assume this
difference decreases by 2% a year for five years until there is no premium and the
marginal employment costs reach zero. We also assume that the base salary rises
by 3% each year. This is shown in Table 1 below.
Table 1: Employment costs per employee for the first 6 years.
Year of employment BAU salary Project salary Marginal
employment cost
1 £25,000 £27,500 £2,500
2 £25,750 £27,810 £2,060
3 £26,523 £28,114 £1,591
4 £27,318 £28,411 £1,093
5 £28,138 £28,700 £563
6 £28,982 £28,982 £0
After the fifth full year of employment, there are no additional employment costs.
The graduate works six months of the year of graduation so received half the
salary and pay rises do not come into play.
52 The Royal Academy of Engineering