- Planning: Planning, in the context of project management, is the deliberate consideration of all the circumstances concerned with a project in order to evolve the best method of achieving a stated objective. Without it, wasteful, unproductive time is unavoidable. In planning, a logical attempt is being made to foresee all of those events that are likely to prevent or defer attainment of the stated objective. The objective in construction work is usually that of completing a prescribed within a fixed duration and at a previously estimated cost.
- Balance Sheet is a fundamental statement, in monetary terms, of what a company owns (assets) and what it owes (liabilities) at a given date and along with a small amount of information that enables the liquidity and solvency; and performance/activity and productivity of a company to be assessed.
Concept of the planning balance sheet
In most developments, there is careful consideration in the Planning Office, of the implications of the development proposal, or of alternative proposal; and in doing this, the Planning Authority’s viewpoint is not necessarily identical with that of the developer because its horizon of interest is always wider and has different objectives. It will accordingly take into account implications that the developer would not consider in making his decision. The planning office will need to consider a development proposal or programme on a variety of issues bordering on costs or losses on one side and benefits or gains on the other, so that these and their incidences, can be seen in relation to one another. This will facilitate arriving at a planning decision. It is this listing that is referred to as the ‘drawing up’ of a balance sheet. In its drawing up, the items in the balance sheet should be sharply defined and expressed as quantities as much as possible. For example, it makes for greater clarity and precision when considering a farmland to speak of in terms of its capacity to produce ‘X’ gallons of milk or ‘Y’ tubers of yam per acre. Many items, however are intangibles and cannot be expressed in quantities and so must be described in qualitative terms; the unpleasant smell of poultry waste, nerve racking noise of vibrating engines, etcetera.
Methods of measuring loss and benefit of development in monetary terms
The methods of measuring loss and benefit are important so as to define their incidence; that is the persons or bodies on whom they will fall since that will affect the standard of measurement. The loss of a farmland will have effect in the following ways:
- The farmland- loss of value of crops produced
- The farmer – loss of livelihood
- The owner – loss of rent
The balance sheet is not a balance sheet in either the individual or social accounting sense. This is so because items are not all of capital nature; losses and benefits which accrue to various people and groups are considered and not just private account or to the country as a whole, as in social accounting. There may be double counting such as where, in a proposal to take over agricultural land, the loss to both the community and the farmer are taken into account; there may be omitted certain implications of the proposal because the planning authority does not take account of all social costs. No simple balance can therefore be struck. It may not even be possible to strike a balance among all items which can be translated into money terms because they represent costs or benefits to different people.
In the words of its principal advocate, “the planning balance sheet groups the community / project into homogenous sectors distinguished by the kind of operations they wish to perform”. It then evaluates the alternatives from the point of view of the advantages (benefits) and disadvantages (costs) accruing to every sector from each alternative to see which provides the maximum net advantages”. The essential argument is that while it is important to plan for optional conditions for every current and future project; the plan proposals should aim to provide the best solution for as many requirements as possible or the greatest aggregate net benefit for all concerned. By such criteria, cost-benefit analysis may be used to assist in the choice between alternative decisions, on the basis of locating the method which will yield the greatest margin of profit over cost in relation to the resources invested.
The costs and gains of planning
It is sometimes argued that planning decisions may increase cost of development; however, extra costs should not be attributed to planning for developers must accept the economic and social framework which has introduced planning and accept as normal the cost of developing in a planned way. Planning can be said to pay always as a city must pay for planning or not planning. Since the liability that is avoided sometimes would fall on the individual and sometimes on local authority or the national income, it is relevant to ask ‘whom does it pay?” considering certain costs which are always charged to planning but which are not really costs of planning.
