I welcome members, the press and the public to the seventh meeting of the Finance Committee in 2004. I remind members to turn off all pagers and mobile phones. We have received apologies from Jeremy Purvis.
It goes without saying that the last thing on earth that I wish to do on behalf of the SPCB is to come before the committee to report further increases in the cost of the Holyrood building project. As you said, the committee has received the Presiding Officer's most recent report and a separate letter that details a number of points that the committee raised on other matters.
I will raise a factual issue from the Presiding Officer's report, which says:
The committee is well aware from previous discussions that the contractual method means that we do not have a fixed-term, fixed-price contract. We cannot give the committee absolute guarantees about the matters that you mentioned. However, the nearer we are to the contract's finalisation, the fewer issues we will have to resolve and the more confident we will be. Through our officials, we have sought precisely those assurances. The Presiding Officer has been greatly involved in the discussions. The statement in his letter represents exactly the position that we must take before the committee.
I welcome to the committee Margo MacDonald, who has just arrived.
It might be appropriate for me to chip in, because Holyrood progress group members put those questions to DLE and BLL representatives again yesterday. DLE and BLL reported confidence, but that must carry a health warning, because we have heard similar expressions of confidence before. However, we are close to the end—a relatively small number of windows have still to be fitted and a relatively small amount of work has still to be undertaken—so I find that confidence more credible now. All that we can do is maintain the pressure on them. Robert Brown has outlined the position, which members understand well. Under the contract, there can be no certainty until completion.
DLE's confidence in costing this programme and our confidence in receiving its estimates are different from before because sufficient work had been done before the programme was put together to allow it to be based on known productivity levels by all contractors. In other words, nobody had to estimate what a contractor might or should achieve. The programme contains the known output of the past couple of months.
If I understand you, your answer is that we are further on with the project, so you know more about the contracts that have been let, and that your information from Bovis and DLE is that fewer external factors than before could increase costs. Is that a fair summary of your answer?
That is correct.
If BLL cannot complete programme 7B on schedule, I presume that more cost increases will be incurred.
That is absolutely the case. That is why it is so important to focus on the programme.
Can the committee have any idea of the maximum cost increases? At an early Finance Committee meeting, I plucked a figure from the air and jokingly—well, not jokingly, because the situation is not funny—asked whether we would go beyond £500 million, which I could not be given a guarantee about. I thought there was absolutely no prospect of our reaching that figure, but now we are up to around £430 million. If BLL does not complete on time, what is the maximum that the building could cost?
I understand why you are asking the question, but it is almost impossible to answer. If the building is completed on time, which we are focused on, the cost will be somewhere in the region of what we are talking about just now. If it is not, the cost depends on how long the delay is, the reason for the delay, who is involved and all that sort of thing. We just cannot answer the question.
The letter from the Presiding Officer states quite clearly that if the date of July cannot be achieved, entry could be delayed until 2005. I would have thought that the cost rises in that event would be massive. I just wanted to probe—
I just want to make a brief point to put the issue in context, if I may. It is important to understand that the first issue is construction completion and the second issue is the physical entry at a time convenient to the Parliament, which is why the summer recess is so important. When we talked about 2005, we were not suggesting that there is a likelihood of the project going on until any such date.
We will see. I am just reading from the report, which also says that snagging will be carried on until August. I would have thought that it was difficult to occupy a building in which snagging was taking place. I turn to the advice that the cost consultants have given. If I may say so, the answers to the convener seemed to be from a master of ambiguity and were not the sort of open and straightforward answer that people in Scotland want. Last week, when Mr Fisher was giving evidence to the Fraser inquiry, he stated that 49 out of the 92 packages for the Parliament have yet to be completed. He described that figure as "exceptional" and went on to say:
It is not Mr Fisher's job to advise on the programme. John Home Robertson can explain what goes on in Holyrood progress group meetings, which I do not attend; perhaps Mr Fisher is part of a round-table discussion. Hugh Fisher would be the first to say that we have been really quite strict on this. Cost consultants will say, "Give us the programme and we will tell you what we think it will cost." That is what has happened here. I do not think that you would get Hugh Fisher to give you a professional view on whether the Bovis programme is achievable, because he is a quantity surveyor. He would properly say that that was a matter for programmers and would therefore put the question back to Bovis.
I just want to be clear about this. You tend to talk in the general rather than the specific when you give your answers, Mr Grice. We are interested in the specific. Specifically, you are saying that Mr Fisher does not generally give advice. Will you confirm, specifically, that no advice has been received by the Scottish Parliamentary Corporate Body, by your office, by the HPG or by the project director regarding whether the July date is likely to be achieved?
I can tell you specifically that Mr Fisher has not given me such advice, if that is helpful.
We took evidence from Hugh Fisher as well as from Alan Mack, the construction manager, and the design team yesterday at the Holyrood progress group meeting. Alan Mack spoke to the programme and gave us an account of how the packages are progressing in accordance with the programme. Hugh Fisher, on behalf of Davis Langdon & Everest, spoke to the costs, which is his job. The evidence that we heard yesterday is that, as you have said, the site is busy and a lot of work is going on but, in accordance with what has been achieved to date, with the window fixing and the cladding completion, the July date can be achieved and it is our intention that it will be achieved to enable the Parliament to flit in the summer as planned.
So Mr Fisher has not given the HPG, the SPCB or the project director any advice as to when the project is likely to be completed or, in particular, as to whether the July deadline will be achieved.
That is not his job.
It may not be his job, but I am just asking whether or not that has happened.
If it is not his job, then that will not have happened, Fergus. The Presiding Officer's letter makes it clear, when it says:
I understand that, convener—although normally it is the witnesses who answer the questions. It might not be his job, but Mr Fisher offered views to the Fraser inquiry last week, which clearly indicate, if one thinks about what he said, that the proposition that we are going to complete the project by July is extremely ambitious. Reading between the lines, judging from what he has said on the record, that is unlikely to be achieved.
It remains the fact that it is not Mr Fisher's job to give us estimates or things on which we rely as far as the programme is concerned. That is the bottom line.
What Hugh Fisher has said is that if the programme had to be extended, it would cost more. It is our intention that that should not happen.
Has Mr Fisher produced cost estimates that we have not yet seen?
No.
Presumably Bovis has advised you that the project will be finished in July. How confident can we be that Bovis is correct? There is a feeling that—
As I have said already, Bovis is expressing great confidence. My anxiety is that I have heard similar expressions of confidence from it in the past.
Yes—Bovis has always been confident in the past, but we have had reason to dispute that confidence.
However, we are so much further down the line now that Bovis's assurances are, frankly, more credible.
Can I move on to—
May I make an observation, if you do not mind? We are not professional managers; we rely on those who work for Bovis, who are, and who are paid to give that guidance. Therefore, that is the best guidance and advice that there is. Whether it proves to be reliable remains to be seen but, because of the progress of the contract, we are much more confident that the deadline can be achieved than we have been at earlier stages.
Let me move on to the advice that you have received from the cost consultant regarding the additional £20 million to £25 million. That increase has appeared despite the fact that prolongation happened a while ago. Four weeks ago, we were told that the project was on target at £401 million. Now, it is suddenly £430 million. That is not just a matter for regret; it is a matter for extreme frustration for everybody involved.
I will ask Sarah Davidson to deal with the background to how the costs come forward and how they are dealt with in relation to the points that you raise.
There is a distinction to be drawn between the different figures. First, there are the figures that are listed in the annex to the letter as draw-downs from risk. Those are risk figures that were already predicted by the cost consultant back in August as likely to be required for the various packages, and which are now being drawn down into commitment. What is being reported this time, over and above that, is the impact of the slippage and disruption to the programme: that which has already happened over the past couple of months and which was touched on in the Presiding Officer's letter of January, and that which is anticipated over the coming months.
I am not particularly concerned about the spurious neatness at the moment—things seem to have been so inaccurate that that must be the least of our concerns. I am concerned about something else. We are told that the sum will be £20 million to £25 million yet none of us have any idea how that figure has been arrived at. Nothing that has been presented to us suggests why it is suspected that those extra costs have arisen. I feel as if we are being asked to nod something through on the basis that it is only another £30 million and we will probably get in by July or August, although we might not, of course. I feel that we are all being softened up to prepare us for more delays and expense. I do not have much confidence in this at all.
Part of the difficulty in breaking down in any public way the increase at this point is that it concerns only a small number of packages. The vast majority of the 49 packages to which Mr Ewing alluded earlier are not attracting additional costs. I think that about six packages have a significant amount of disruption and prolongation. Obviously, we do not want to disclose those figures to the contractors involved at the moment. The project team has received from DLE a breakdown of the particular problems relating to each of the key packages and an explanation of where the additional costs have come from. We are privy to that commercially sensitive information while the argument is being had with the trade package contractor.
So all the Finance Committee can be told is that we have to trust you when you tell us that we have been told the truth this time.
That has always been an issue. We have had some discussion previously about the balance between public knowledge and commercial confidentiality. The main object of the exercise is to deliver the project with as much concern for economy as we can manage. At the end of the day, we have to rely on our professional advisers to do that—that is what they are paid to do. The issue is one of timing. At this stage, it would not be helpful to the project or the financial interests of the Parliament for us to discuss publicly the information to which Sarah Davidson referred. I know that this is a difficult issue, but we have to take a line on it.
I am interested in the 43 other packages that Sarah Davidson mentioned. As far as you know, Sarah, they have not accumulated any extra expenditure. Is that correct?
Yes.
I appreciate the notion of commercial confidentiality. It has been alleged that—perish the thought—some contractors might feel that they have you over a barrel, given that we have told them when the Parliament has to move to Holyrood and so on. Can you give us an idea of what the packages are? What sort of work are we talking about?
I just want to be clear about the first question. Were you asking which packages are the ones with particular problems?
You said that only six of the 49 outstanding packages were causing problems at the moment.
I can say where the packages that are causing problems are. The key problem is in what we call the envelope of the building—the cladding of it. There have been problems, which has been well rehearsed before the committee and in other places, about the fitting of the windows. The problems go right back to changes to the window structure that were made in response to bomb-blast requirements and the strengthening of the window sections, which has meant that not only is the window itself a different creature from what was envisaged originally but the way in which it is put into the building is quite different. A company that started off with a relatively small contract is now doing an enormous piece of work, the programming of which has been complex, and dialogue between that company and Bovis has continued throughout.
I want to ask a question at this point—I will come back to the toilets. If the problem is in the marrying of the different materials, such as marrying the different specifications of the steel, aluminium or whatever metal of the windows with the inside stone and the outside cladding, was it not up to the designers to get that worked out a while ago?
It is up to the whole team to get those things worked out, but the problems that we have encountered latterly have largely been logistical and are to do with getting things on the walls. That is something that Bovis has to programme along with the specialist contractors and the people who are responsible for scaffolding and cranes. It has been a hugely complex task.
Sorry, with all due respect, I understand that it is complex and I am not a builder. Even I can work out that there should have been some forward planning to cope with that. You are saying that it is the reason for the prolongation and therefore the greater costs and all the rest of it. You have had a while to think about it.
Obviously from the very beginning and all the way through a buildability plan was being developed for how all the different components were to be put together, particularly where there were different trades interfacing in the way that you described. Bovis has been telling us that it has been much more difficult for it and the trade contractors than it anticipated. In due course we will have to take a view on whether that was reasonable.
You said the most important thing last there. We have to consider whether it is reasonable to expect the client to say, "We appreciate that this is difficult, so it will cost a lot more money that you didn't tell us about."
There have been a number of adjustments to the toilet package, on which the progress group received a report a few meetings ago. I do not have the report with me, so I cannot remember off the top of my head what the adjustments were.
If they are not gold taps, you are in trouble.
It is a site-wide package; there are a lot of toilets. We can certainly provide the committee with a report on the adjustments.
I used the toilets as a example, because unless someone is an expert, when they read phrases such as
What I can tell you is that in the list of draw-downs given in the February report, almost every, if not every, draw-down is specifically to do with prolongation and delay and not to do with changes in design or changes in specification or putting in something that was not there before. The only way in which we can verify in due course that that is not back covering on the part of cost consultants or anybody else is by ensuring that the documentation that supports the claim for payment for final account justifies every penny of the money that is here.
Do the witnesses agree that we are fortunate indeed to have George Reid taking command of the situation, given the shambles that he inherited from his predecessor? At long last we have someone who has a concrete way ahead in tackling the shambles, which is the best word I can use to describe it.
Come on, John, you have to ask a question.
I am asking a question. We should be hanging our heads in shame, rather than worrying about an opening ceremony. Would the witnesses agree with me that the figure of £0.5 billion is more accurate than the figures that are currently being bandied about?
Was there a question there, convener?
Most of that was a statement. I refute entirely what Mr Swinburne said about the difference between the previous Presiding Officer and the current one. The reality is that the corporate body, which has been in charge of the matter and of which the Presiding Officers have been the chair, has done its best with the project throughout. There comes a time when it is possible to reach agreement on capping the architects' fees and so forth. We have been able to do that in this session, which would not have been possible further back in the project.
Perhaps it is because I share Margo MacDonald's slightly lavatorial sense of humour, but I would like to pursue the matter of the toilets. I, too, noticed that £0.5 million had been moved into the budget from the various contingency areas for toilet fit-outs. Is that £0.5 million contained within the figure that we have, which is approaching £3 million for toilets?
The £3 million being the figure that was contained in the more substantial report that I passed to the committee last time.
Yes.
Yes, it is contained within the £3 million.
I looked at the original figure for toilets for the building, which came out at £934,963. The figure is now £2.9 million, which is three times more than was estimated for toilets alone. I know that that is over the whole period. Some of us have been fortunate enough to go down and see interior parts of the Parliament. I probably would not disagree with Robert Brown when he says that we perhaps have something to be proud of down there, but being proud of it is one thing. In the toilets, the water switches on automatically, the lights go on automatically, the mirrors come out from the wall and are backlit and so on and so forth. Has somebody gone a little bit mad in designing the toilets? Was that all assumed?
On the last point that you make, the lighting and the water are all part of the general approach of trying to be environmentally sound. That is environmental good practice in a building.
Was that included in the £934,000?
Environmentally sound practice was included within the user brief for the building, so any tender estimate that was initially made for toilets should have taken that into account. However, you are absolutely right. The toilet fit-out package has concerned the project team and the progress group and for that reason a report on the package was asked for, which broke down all the amendments that have been made over time and costed them, and also set out clearly the cost of delay. I do not have that information to hand today and I cannot remember the exact balance of figures off the top of my head; however, a very substantial proportion of the change in the overall cost of the package is down to site-wide delay, for the same reasons that all the rest of the fit-out has been delayed.
We have a major manufacturer of toilet porcelain, urinals and so on in Scotland. Was that company given an opportunity to quote for the toilet ware in the toilets?
To the best of my knowledge, anyone and everyone was given an opportunity to quote.
Can you confirm that the contract went to a European firm rather than a Scottish firm?
Off the top of my head, I cannot remember which company has the contract for toilet fit-out, but I will confirm that. The information will be in the cost report.
We can get that information in writing.
It would be useful to have the information in writing, but I am still slightly aghast. I can understand that certain things might go somewhat over cost—without wanting to be too lavatorial, I can understand that bomb blasting would require certain adjustments to be made in certain places—but I still find it unfathomable how the cost of toilets could go up from under £1 million to £3 million. From what I hear anecdotally, the cost will not stop there but will be nearer £4 million by the time the toilets are finished.
Ted Brocklebank makes a good point. As Sarah Davidson said, that point has been raised in the Holyrood progress group. The way in which the figure has escalated and the fact that the package has become so complicated are extremely worrying. We have been doing some work on that.
Perhaps we could be provided with a written response to the issues that Ted Brocklebank has raised about which company was awarded the contract and the procedures for that. It would also be useful to be given a specific explanation of the growth in the cost of the package.
I want to make two points, one of which is technical and the other more general.
The clause was included at the time that the contract was let. The contract is based on the standard Royal Institute of British Architects contract, although I understand that this clause was a standard Scottish Office clause that was routinely added into the standard RIBA conditions. Obviously, the clause gives the client slightly more protection as it does not give the architects an opportunity to revisit and dispute cost valuations on which different levels of fees have been agreed. The clause has actually been quite useful to us and has been applied throughout the duration of the project, but it was something that we inherited.
Fine. That is helpful.
The figures that are reported today are the outcome of the cost consultants' review of what they call the package risk register. That review is now carried out by the cost consultants very frequently—more frequently than was previously the case. It takes the form of the current pricing of risk, which has been done ever since the Auditor General's 2000 report, as you rightly say.
I understand what you say about the assessment of risk for individual packages. One of the two risks that are involved relates to the cost of individual packages, but what has bedevilled the project is the highest-level risk, which has two dimensions: cost and completion date. I accept that all of the figures are stated within an envelope that assumes that the project will be finished this summer. However, as part of the overall risk assessment, and given the number of packages that are still outstanding, an assessment must be made at a high level—not at the level of every individual package—of the likelihood of hitting that June target.
There is an on-going exercise that examines how we are going to get into the Parliament and which marries the construction programme and the migration programme. There are something like another 54 contracts for various services in Holyrood. Around 49 of those have been let and the remainder will be let by the end of next month. Bringing those contracts together will be a complex exercise and deciding when to activate them in the light of the uncertainties of the programme has been an enormous challenge for parliamentary staff.
I will not pursue this line of questioning further. I accept that a degree of commercial sensitivity surrounds the idea of completing the project in time and that you are not anticipating scenarios of non-completion. That said, I think that it will be important that the progress reports that the SPCB gives the committee in the coming months cast a little bit of light on what those scenarios might be and where we are in relation to them. I will leave it to the SPCB to decide exactly what to do in that regard. My point is that it creates a false impression if we are spending our time micro-managing the risk associated with detailed sub-packages when there is a higher-level risk about which scenario will prove most likely over the coming months. The SPCB might want to reflect on the way in which it reports to us on those matters.
In the figures that you have before you there is £2 million to £4 million of non-allocated contingency funds to allow for accelerated working where necessary. That is there so that, where it is physically possible, and where it would represent value for money for the Parliament, we could speed up some bits of the work to ensure that we achieve the target end date.
Can I just be clear, though? To pursue Wendy Alexander's point a wee bit further, are all the figures that we have and all the risk estimates that you have been talking about absolutely centred on the idea that we will be in situ in September? Is that the core basis on which you are proceeding? Is the commitment that you are giving that that must be delivered?
We want everyone to be focused on that.
I just want to be absolutely clear about that. I think that Paul Grice suggested that a number of the service contracts that are likely to be let in March are based on that assumption. In other words, more financial commitments are likely to be made on the basis that your underlying assumption will be reached. Therefore, you will have to be absolutely clear—if not at this point, when the contracts are let—that the target will be delivered. I just want an assurance from you that the only way in which those service contracts will be let and further costs committed will be on the basis of absolutely robust evidence that the target date can be delivered. On the other side of that, do you have any ballpark estimates of what the cost might be if you are forced to abort making those decisions and go for a much later date of entry?
Further to that, are there any penalty clauses, so that if we do not deliver by the September break we can claw back some of the money?
To deal with the first point, we have been aware for some time that one of the real difficulties has been marrying the service contracts to the programme, because of the movement in the programme. A year or more ago, we set upon a strategy of having as much flexibility as possible in the activation dates for contracts, because our procurement team spotted the potential difficulty early on. We have managed to let all the contracts with a degree of flexibility.
I suppose that, in a sense, we are saying that that is not only the critical path but the only path to hold the project within even the broad parameters of the cost estimates that you have. We have to deliver on it.
The Presiding Officer has taken an absolutely determined view that we must get in. None of us is pretending that we can guarantee that, much as we would love to—it would be nice to be able to sit here and promise that but that would not be an honest response. There is no doubt that the Presiding Officer is absolutely focused on the summer; he is not focused on any other time. He believes that we have to give that everything—and I think that the progress group and the corporate body back him 100 per cent. We must not fail because we did not commit ourselves to it. That is our position.
Fergus Ewing wants to ask a specific question about architects' fees, after which I will bring in Jim Mather.
Given what Mr Grice has heard, it occurs to me that if the July date is not met—I get the impression from the witnesses that in their heart of hearts they do not think that it will be met—the question will be whether the money spent on acceleration has been wasted and, if so, how much has been wasted.
I just want to be careful. Is that a question for us?
It is a question about the cost of the Holyrood project. I thought that that is what we were here to get at. Perhaps I have been labouring under a misapprehension. We have the witnesses here and I have asked a serious question. I would be concerned if any money had been wasted in paying for travel costs other than strictly in accordance with the contract. I am bound to say that many other people outside this room would be concerned as well. It may be that the witnesses cannot answer the question today, but I hope that they will answer it pronto.
It is a serious question, but it is a question for the Audit Committee rather than the Finance Committee. I certainly cannot answer it today and I very much doubt that my colleagues can. The issue should be taken up through the Audit Committee or the audit process.
The question has been taken up by the Audit Committee and will be answered properly in that way. With great respect, Mr Ewing, I do not think that we should encroach on the function of another committee.
I refer to annex A. What steps have been taken to analyse at a reasonable level of detail the reasons for movement in individual trade packages under the specific headings of original agreed adjustments to the original cost, inflation, subsequent approved changes and final cost overruns? What has been done to document that?
Within the project team and Bovis, to whose records we and the auditors have full access, there is a file record of every single change order that promotes or enacts a change, all of which have to go through a process that involves all parties signing them off. The auditors are dragging themselves through the file record on the packages at the moment. In many instances, the story is long and complex, but the full record is there.
Will it subsequently be published?
Do you mean what the auditors are doing or the documented—
I mean the documented report. The bill of materials that explodes each of the reasons.
We have not considered that specific question. There would be an enormous amount of paper to publish and I suspect that much of it would be open for examination under freedom of information legislation anyway. The record of everything that has happened under the budget is the Parliament's property and, after the final accounts have been confirmed, I do not imagine that any of the information will be covered by commercial confidentiality rules.
To move on from that specific point to a more general one, as you move along, is anyone documenting the lessons that have been learned about project management and about this particular style of project?
We feel that we have been entirely taken over by people who are trying to learn lessons from the experience. After the project has been completed, one of the tasks for what will remain of the project management team will be to draw together an end-of-project report on exactly that issue. I am sure that the report will be heavily informed by the conclusions that are reached both by the Auditor General for Scotland and by Lord Fraser.
Will the report be written in terms that will enable it to be a constructive, workmanlike road map for people who come after you to run similar major public sector projects?
In so far as I can respond to that, we have a duty to ensure that it is, otherwise the document would be fairly worthless.
I offer a bit of advice. I appreciate that it is difficult to quantify the risk of a programme overrun of one or two months, as Wendy Alexander tried to do. However, bookies in this town are giving odds on that sort of question. The public relations people whom you employ to help the team should have a mind to that. You cannot be absolutely accurate about the cost, but you should try to identify for people a ballpark figure of the possible cost if the July deadline is not met.
Margo put her finger on the issue when she made that final point. If a delay were to arise, the cost would really depend on why the delay had arisen, in which part of the site and the effect that the delay would have on the other people on the site. That would become clearer, as other things will become clearer as we progress. However, I honestly do not think that it is of particular public or other advantage to speculate about that now—the position would depend on the section where people were held up or whatever the problem was. The answer must be that we are focused on trying to complete the building by June or July, so that we can get in and get on. That is the central issue, and we should not be diverted from that. I do not think that speculative issues—which are really what we are talking about—much advance the sum of human knowledge on the matter.
Let us agree to disagree on that.
We have been meeting for months but, whatever question we ask, the answer always seems to be the same: "The building will be finished when it is finished and it will cost what it costs."
Technically impossible, I think.
However, it would be sensible—and courteous to the committee—for the witnesses to have to hand information on matters about which they might guess that the committee will question them.
Can I make an initial observation on Kate Maclean's first point about the difference in price? It is obvious that we have been discussing this issue for quite a while. It is a question of the contractual method—we do not have a fixed-price contract. Against that background, and bearing it in mind that the contract was put in place by other people before we were on the scene, the initial pressing of the button had many implications. We are not in a position to do anything about those implications, given that the project is to be completed to finality. I ask Sarah Davidson to deal with the details of Kate Maclean's questions.
On disability access, I do not want to give the impression that liaison with disability groups has caused the project to run late. Kate Maclean is right to say that there has been consultation of groups that represent disabled people and that a consultant on access issues has been employed from the beginning. The consultant's advice has informed the design of all the packages. I meant to imply that, because of that, the design team is particularly sensitive to ensuring that those issues are addressed. After the tender was put together, the toilet fit-out package was amended to introduce accessibility issues. We will ask in due course whether the team should reasonably have known about such issues when the tender was priced. If so, why were the issues not taken into consideration? Did the issues come on stream later, perhaps when representations were made about them? We do not yet know the answer to that question, which is perfectly legitimate.
Could not that have been predicted when the windows were being manufactured?
Apparently, the advice that we have received is that that could not have been done. It is something that we will need to examine in due course.
I hope that the convener will guide me as I attempt to raise a matter that relates to a question that was asked by Fergus Ewing. I am aware that the convener suggested that Fergus Ewing's questions should be dealt with by the Audit Committee, rather than by this committee, which is responsible for consideration of the financing of the Fraser inquiry and for examining its costs.
The corporate body has taken a firm line on that, not just with Benedetta Tagliabue but with all the consultants. It does not see itself meeting any additional costs that are associated with providing evidence to the Fraser inquiry.
Do we know if she is actually going to turn up?
It is impossible to say. I would not want to give a guarantee on Benedetta turning up to anything.
Someone had suggested that to me.
I understand that she is scheduled to appear in the next month or so.
I was going to suggest that if you do not pay her she might turn up, but perhaps that would be a little bit flippant.
Oh, come on.
I may never see it. When we were there, we were struck by the fact that there seemed to be large groups of people standing around brushing up puddles. I am not blaming the guys who were doing that, but I had a strong feeling that day that there is not much planning of the way labour is used. You said that there were 1,200 people on site. If their work is not co-ordinated, there will be a great loss of money because they will not be being used productively.
The figures that we give in the papers that are before the committee today under the broad umbrella of prolongation could equally well be described as prolongation, disruption and non-productive working. We would not disagree at all with what Dr Murray says, but the way in which the building is being completed—because it is the only way in which it can be completed to programme—involves working that is, in many ways, not particularly productive, although it is highly programmed and highly scheduled. In other words, Bovis has to move people around the site in order to work on faces wherever they can, because it has not been able to proceed in the logical sequence that it wanted and which it originally programmed.
What about the cladding, the internal finishes and the external envelope? Is that troublesome work complete or will it be completed in the next couple of months?
It is very nearly there: 100 per cent of the windows have been handed over on towers 1 and 2 and more than 90 per cent have been handed over on towers 3 and 4. The contractors will start stripping the external scaffolding from all those areas around the end of March, by which point the envelope will be closed down.
Will we know at that stage whether we are on target?
Yes.
I have two points that I hope will remain technical for ever. The first concerns the parent company guarantee. The witnesses—particularly Mr Grice—will be aware that I ascertained in January that no parent company guarantee had been secured, which would secure the obligations of Bovis by having the parent company agree to step in should anything untoward happen to Bovis.
Can I first of all acknowledge that Mr Ewing raised that issue with me previously and that I was grateful to him for coming to discuss it with me. Indeed, that discussion helped to inform the advice that we put to the corporate body and which it considered on Tuesday. In fact, that was the second piece of advice. As a result, the corporate body decided that it would be right to pursue a PCG, which we are doing. I cannot give a timescale today, but I am happy to try to indicate a timescale to the committee once I have had a bit more feedback. The next stage, to be frank, would be for Bovis's lawyers and ours to engage in. Once that engagement has taken place, I ought to be able to give the committee a better estimate, rather than make a guess off the top of my head. I will be happy to do that.
Another matter that has arisen is a technical one—at least, I hope that it will remain so—about the level of professional indemnity insurance; namely, indemnity cover for Bovis and for the architects, for example, in the event that there is a negligence claim or litigation. We have heard from Miss Davidson, I think, that it is by no means impossible that there will be litigation. Under the contract, as I understand it, both Bovis and the joint venture company architects have to provide, and have provided, indemnity cover to a limit of £5 million per claim. That, of course, was in the original contract, when the estimated budget price was £50 million. In other words, the indemnity cover was 10 per cent.
Are you asking about Bovis and the architects in that connection rather than about the individual contractors?
Yes.
My understanding is that you are correct, Mr Ewing. Again, though, I would be happy to check that and if it is not the case, I will confirm that to the committee. As Mr Ewing rightly understands, I do not want to speculate at this stage. Action could be considered against anyone who has contracted with the Parliament and, of course, that is a very wide range of people. I would rather not say anything more at all on that at this stage, other than to reiterate a commitment that I gave previously to the committee on behalf of the corporate body, which is that we will look carefully at the issue and that we will do, in due course, whatever we regard as being in the Parliament's financial interests.
I have received the following piece of information since the beginning of the meeting, when I was probing about the cost of the loos. I have had information to the effect that the firm that is well known throughout Scotland as the country's major supplier of toilet fitments—Shanks of Barrhead—was not, in fact, invited to tender for the toilet facilities within the Scottish Parliament. Indeed, when Shanks approached the people involved, it was told that the deal had been done. That sounds extremely serious to me. I hope that you will consider that matter and come back to us with some kind of response.
That obviously must date back to some time ago, but I would be more than happy to take up Mr Brocklebank's concerns. If there is anything we can say to the committee to shed light on that matter, we will certainly do so.
Thank you.
My question is actually for the convener. We can infer that there may be questions as to how Bovis has macro-managed and micro-managed the works packages. We have been talking about that, but we are, obviously, dependent on Bovis's advice as to whether it has used the most cost-effective or the most time-efficient way of getting the job completed. Who decides at the end of it all? Is it the Auditor General for Scotland? Does he run his eye over Bovis's practices, or is there another consultant or a professional body? Who does it?
Bovis, did you say?
Yes. I may not have made myself plain, but we were talking about the balance that is to be struck between economy of construction and speed of construction. Bovis made a judgment call—because you said that we want into the building quickly—about guys standing around and so on. Who decided whether that was a good idea?
The corporate body will ultimately have to make a judgment on all these matters. I am clear, convener, that I am not singling out Bovis or any other contractor although, as you know, we have a contractual relationship with a very large number of people. That is the nature of construction management.
So, in essence, you are saying that the corporate body makes that decision, and that the Auditor General's role will be to review that and other decisions in the context of retrospective analysis.
Yes. You are right that, in due course, the Auditor General could also look at the corporate body's decisions on any future post-completion issue, but that is entirely a matter for the Auditor General somewhere down the line.
We have sought guidance from the Auditor General on a variety of issues, not necessarily on Holyrood. There is a more complicated interplay than has been suggested.
Margo MacDonald raised a serious point, which was followed up by the convener. I make no judgment of the performance or otherwise of members of the corporate body, but is not there a case for recognising that as the corporate body is the body that decides solely whether or not, for example, to pursue legal action, and as it has been involved throughout in making decisions on the project, it could be seen to be marking its own exam paper; that is, judging its own work? There is a potential conflict of interests that could put members of the corporate body in a potentially difficult situation in respect of some particular examples, which I could go into, although perhaps it is better that I do not at this stage. Just as we have a Holyrood progress group, is not there a case for having a committee—perhaps a resolution committee—that is entrusted with advising the corporate body and giving it a separate view on how issues such as potential litigation, for example, should be pursued? Is that something that we could consider before we go much further?
The corporate body is a legal entity. There are individuals on it at any one time, but the corporate body is the corporate body, whoever is on it, and the corporate body legally must make those judgments. It is legally the client under the Scotland Act 1998—subject, of course, to direction by Parliament. The whole Parliament has directed it on a couple of occasions in relation to the Holyrood project but, nonetheless, legal responsibility lies with the corporate body.
Further to Margo MacDonald's question, I find it strange that there is not someone from the corporate body—a supremo—on site. There are bound to be dozens of questions hourly, let alone daily, on which someone has to either make decisions or refer to you, which causes delay. We are relying on the contractor to say, "This is the best way to do it—let's do it that way and we will get more profit from it." It seems incredible that there is not a supremo in charge to report back to the corporate body. Do you have such an individual?
If I may say so, the last thing that we need down there is politicians going around telling contractors what to do.
I am not talking about politicians. I am talking about a civil engineer who is capable of doing the job, with a squad behind him to back up all the decisions that must be taken. That is instead of finishing up like the committee that set out to design a horse and ended up with a camel. I am talking about daily decisions that should be taken instantaneously, to get the project completed quickly. Do you understand? Decisions should not have to be referred back—
I am anxious to help Mr Swinburne. The progress group has been there for some time and it is well served by project managers and the project director, who are on the spot all the time and who act on behalf of the Parliament day in, day out.
Well, that's a relief.
This is the point at which we draw the meeting to a close. I thank the witnesses for coming along and giving us their evidence. We should re-emphasise the point that I made at the beginning: it is with deep regret that we deal with the increase in costs thus far. The signal that we should send out is that we must move towards completion as quickly and as cost-effectively as we can. All the information that we get from the witnesses suggests that the consequences of not being in the building in September would be significantly worse than the estimates that they give us. We must make progress on the matter.
The Presiding Officer made it extraordinarily clear—
I apologise for bringing this point in, but I do so simply because we have an example of it already. It is unfortunate that we had to have this meeting today, as the information that Wendy Alexander sought will not be available until tomorrow. If we will be better informed at the end of March, as Paul Grice reckons, can we try to co-ordinate the dates so that—
I think that we will. If there is a key date at the end of March, and if the information will be available for the first appropriate date in April, we will try to co-ordinate the process to get the best scrutiny by the Finance Committee.
In conclusion, I want to say that it is clear from everything that the Presiding Officer has said—with the corporate body's full authority, agreement and backing—that getting in on time is exactly what the corporate body and its officials are focused on. Clearly, that must be the priority and there cannot be any doubt about that. If there is a single message to go out from today's proceedings, it has to be that.
Thank you.
Meeting closed at 14:08.