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Costs should be linked to savings over time

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Letters

The complexity of issues of sustainability and economics are underlined in 'Guiding Light', (AJ 31.8.00). It is interesting to reflect upon the editorial in the same issue, which notes a 'glut of grandiose Lottery buildings'. On an absolute level the Guide hut is far from grandiose, but one does wonder if it illustrates the folly of Lottery grant money: that it frees clients from facing real decisions about time, money and indeed sustainability.

If capital money comes without cost, of course it makes sense to spend as much as possible to reduce ongoing costs (presumably still obtained through bring-and-buy sales), but one might suspect that this building may have consumed excessive resources when built, in exchange for relatively small future savings.

The economist Samuelson cautioned that unless one considered the time value of money, it would make sense for every railway line to be built absolutely level, because over centuries the savings would compensate for the colossal cost of removing all the hills and valleys. If the flow of savings over time, as discounted at some reasonable rate, does not justify the extra initial expenditure, resources have just been wasted.

Surely more information is required so the reader might understand how this building works to reduce lifespan costs in a realistic manner. Otherwise, one might suspect that it is yet another case study of how efficient decision-making can be derailed by unrefined government programmes.

Ian Ellingham, Cambridge

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