Costs and pricing
Part of How to build a community budget that finance will trust
Sizing contingency in a community budget from confidence ratings
Size contingency for an English community budget by rating uncertain lines low, medium or high confidence, then adding the expected-to-high gap.
A contingency line should trace back to named uncertain lines, not to an unexplained percentage added to make the total feel safe. This method rates each uncertain line by confidence and adds a share of its expected-to-high gap. The rest of the budget is built as in building a community budget.
What to take away
- Size contingency from the expected-to-high gap on lines rated low or medium confidence, not from an unexplained percentage.
- A low-confidence line adds its full gap and a medium-confidence line adds half of it.
- Show contingency as its own line, linked to the lines it came from.
- Keep planned improvements separate from response to incidents.
- The method gives no benchmark rates, because role, risk, coverage and product terms vary too widely for a single England figure.
Rate confidence line by line
Start with the lines that can move. Each needs a low, expected and high case, plus a source, an access date, an owner and a confidence level. Confidence rates the evidence behind a number, not how firmly anyone hopes the number will hold.
Separate observed baseline, supplier quote and planning assumption, because each earns a different rating. A written quote tied to an official price record sits differently from a guess about how many members will contribute. The table sets out the three ratings and what each adds.
| Confidence | What the evidence looks like | What contingency adds |
|---|---|---|
| Low | A planning assumption, or no written quote for the selected edition | The full expected-to-high gap |
| Medium | Some evidence, such as a published price page not yet matched to a quote | Half of the expected-to-high gap |
| High | An observed baseline or written quote for this exact scope | No gap |
The worked example is a support community of 900 members with staffed cover from 08:00 to 18:00 on weekdays. Setup is estimated at 120 internal hours and 12 supplier days. Recurring people time is 1.2 full-time equivalent at an illustrative loaded cost of £55,000 a year.
Rate the people lines against real costs
Calculate internal time with a loaded employment cost agreed by finance. The Office for National Statistics publishes earnings statistics, but those data are context for labour markets, not the organisation's actual salary, pension, National Insurance or overhead. A line built on them alone is a planning assumption.
Employer National Insurance rates and thresholds for the whole of the UK are published on GOV.UK for each tax year. Check whether the Employment Allowance reduces the bill for the organisation, and confirm pension treatment against the scheme rules and auto-enrolment duties before rating the line above low.
Rate the technology lines against the quote
Attach the official price record and written quote to every technology and supplier line. Discourse's pricing page shows how a supplier may publish plan information, but a budget must use the buyer's selected edition, billing terms and applicable taxes at the decision date.
Technology and supplier cost lines
- Platform licence or hosting
- Member, administrator and usage allowances
- Email, storage, video and automation
- Implementation or managed-service retainer
- Support level and additional incidents
- Security monitoring, backups and recovery
- Integration licences and maintenance
A line stays low confidence until the selected edition is quoted in writing. Once it is, the rating can rise and the gap shrinks. In the example, technology and supplier quotes come to £18,000 a year before tax, and software cost checks show what to look for in a quote.
Rate the assurance, change and exit lines
Assurance and change lines include scheduled access reviews, accessibility testing, privacy work, security exercises, policy updates, staff training and supplier due diligence. Each is scheduled work, so each can be priced from a plan.
Assurance, change and contingency items
- Scheduled access reviews
- Accessibility testing
- Privacy work
- Security exercises
- Policy updates
- Staff training
- Supplier due diligence
Exit lines cover budget export, archive review, member communication, migration, parallel operation, supplier assistance and deletion evidence. They are priced early and incurred last, so their ratings deserve a review at each reforecast. Spread them across the decision horizon if finance policy requires, while keeping the cash timing visible.
Exit and transition cost lines
- Export
- Archive review
- Member communication
- Migration
- Parallel operation
- Supplier assistance
- Deletion evidence
Add the gap in five steps
The method needs no percentage. Rate each uncertain line, then add gaps according to the rating.
- List every line with a low, expected and high case.
- Rate each uncertain line low, medium or high confidence and record the evidence for the rating.
- For every low-confidence line, add the full gap between the expected and the high case.
- For every medium-confidence line, add half of that gap.
- Show the total as its own contingency line, linked to the lines it came from.
A contingency built this way answers the finance question "why this number?" with a list of lines. It also falls as evidence improves: when a quote arrives and a line moves up a rating, its gap leaves the contingency.
See it in the 900-member example
In the example, the method gives £9,000 on top of other lines totalling £118,500. Contingency sits in its own row, so a reader can see what it adds. The amounts are illustrative and show the format, not market rates.
| Line | Illustrative amount | How it is built |
|---|---|---|
| Setup | £21,000 | 120 internal hours and 12 supplier days |
| Recurring people | £66,000 a year | 1.2 full-time equivalent at the loaded cost used above |
| Technology and suppliers | £18,000 a year | Platform, storage and managed-service retainer quotes |
| Assurance and change | £6,000 a year | Access reviews, testing, training and planned improvements |
| Contingency | £9,000 | Expected-to-high gap on lines rated low or medium confidence |
| Exit and transition | £7,500 | Export, migration, parallel running and deletion evidence |
| Total, year one | £127,500 | Setup, one year of recurring and assurance, contingency and exit |
Keep planned improvements separate from response to incidents. A major migration error or safeguarding case can require decision authority beyond the community budget, so it is escalated rather than absorbed. Line-by-line costing without invented rates is covered in costing an English community.
Before you act
- Give each uncertain line low, expected and high cases with a source, access date, owner and confidence level.
- Rate each line low, medium or high confidence.
- Add the full expected-to-high gap for low-confidence lines and half for medium-confidence lines.
- Show contingency as its own line, linked to the lines it came from.
- Attach the official price record and written quote for each technology and supplier line.
- Keep planned improvements separate from response to incidents.
Common questions
Why not add a flat percentage for contingency?
A percentage inserted to make the total appear safe cannot be explained line by line. A contingency linked to identified uncertainty can, and it moves when the evidence moves.
What does a medium-confidence line add?
Half of the gap between its expected and high cases. A low-confidence line adds the full gap, and the total of these additions becomes the contingency line.
Does contingency pay for incidents?
Keep planned improvements separate from response to incidents. A major migration error or safeguarding case can require decision authority beyond the community budget.
