Scottish Parliament Building Project
Item 2 concerns the Scottish Parliament building project. I asked for this item to be put on the agenda so that the Auditor General for Scotland could update the committee on Audit Scotland's plans in connection with the project. As the summer recess is now over, more information might be available, and the Auditor General has kindly agreed to report to the committee on the stage that he has reached.
I welcome Margo MacDonald, who has just arrived. We have just got on to the item about the Holyrood project, Margo.
The good bit.
Yes.
I invite the Auditor General to address the committee and thank him for coming along.
Mr Robert Black (Auditor General for Scotland):
Members will recall that, at the committee's meeting on 17 June, I indicated my intention to make a further report on the Holyrood project at some point. As the convener indicated, it might be helpful to the committee for me to provide a more detailed outline of my intentions.
I will examine and report on the management of the Holyrood project, using my wide statutory powers to access documents and make a report that will consider the economy, efficiency and effectiveness of the use of resources. That report will build on the earlier reports that I made in September 2000 and December 2002. I will also draw on the report that the previous Audit Committee made in December 2000 after it took evidence on the basis of my September 2000 report.
My current intention is to report in the summer of 2004 as, by that point, the project should be nearing completion and most of the expenditure will have been incurred. However, I will keep an open mind on the exact timing of my report, depending on how events unfold. Preliminary work will commence soon.
My examination, using my statutory powers, will include the following areas. First, there will be an updated assessment of the procurement strategy, together with an updated assessment of the project management, control and governance arrangements. Secondly, there will be a full and detailed audit of the contract management and controls and related value-for-money issues. Thirdly, there will be an analysis of the delivery of contracts against the targets, and I will examine the reasons for the increases in the costs and for the delays. Finally, I hope to draw some general conclusions and highlight lessons that seem to me to be important for the future of public projects of the same kind.
My report will, of course, be made to Parliament in the normal way and will be made available to the public. It will then be appropriate for the committee to consider the report and decide whether it wishes to take evidence in due course.
I have discussed my intentions with Lord Fraser of Carmyllie, who is about to start an inquiry at the request of the First Minister and the Presiding Officer. I will use my statutory powers, as I have outlined, to report on contract management and value for money. Lord Fraser is in a position to examine matters that involve policy. I consider that, taken together, my three reports, along with the report that Lord Fraser will prepare, should present a full and accurate record of the costs and of what happened with the project, and that there should also be lessons for constructing public buildings in the future.
I would be happy to answer any questions that the committee might have for me.
I invite committee members to ask any questions that they may have, after which I will come to other members who are attending, who may also wish to ask some questions.
What impact will the proposed work have on the other work that Audit Scotland is scheduled to undertake in the coming year?
We will take the work on as a significant project in the coming year. To make room for it, we will be required to reschedule other projects. We are currently planning our forward work programme for next winter and we will take into account the need to revise our programme. We hope to plug the resource gap by other means—for example, by using consultants more than we would otherwise intend to—in an attempt to deliver the full programme to which we are committed.
It is too early to say what the overall cost will be, but we are minded to keep the cost to a minimum. To that end, we will use Audit Scotland's internal resources to the greatest extent. I envisage using consultancy support for some analytical work on the detail of the contracts although, at the moment, I intend to use Audit Scotland's resources for that. As the work progresses, I will keep the Parliament advised of the implications for our budget through the Scottish Commission for Public Audit.
When will you be in a position to advise us of the projected studies that will slip to allow your office to undertake the work?
I will be able to give the committee a general indication of the programme in the fairly near future. Certainly, by the early months of next year, I will welcome discussion with the committee of what our programme might look like through to the end of 2004 and beyond. The committee will have opportunities in the coming months to discuss with me the implications for the programme.
You said that the programme of work was being discussed with Lord Fraser of Carmyllie. I would like clarification on the relationship between his work and the work that your office will do. What work—if any—would you have undertaken in any event? To what extent has the catalyst been Lord Fraser's inquiry? To what extent will the substance, the processes and the reporting dates be dovetailed? Forgive me if that last point has been covered, but I would appreciate clarification.
You asked whether the work would have been undertaken in any event. The short answer is that I would have intended to report in the terms that I just outlined. Given the scale of the project and the related issues, it is appropriate for the Auditor General to report. However, as I said, Lord Fraser is much better placed than I am to consider policy matters, which are not appropriate for the Auditor General. He is also better placed than I am to examine events that occurred before devolution—before my office existed. However, I am not in a position to say in more detail what Lord Fraser will examine. That is a matter for him to determine.
In our preliminary discussions, we have agreed that there is complementarity between Lord Fraser's work and mine, in the terms that I outlined. We are committed to working closely together. The inquiry that he will run, which I understand will involve taking evidence in public, will be his inquiry, not mine. We will provide him with as much support as we can through access to our work, so that he is fully informed, and through helping him to understand our reports as a context for his work.
We are committed to dovetailing as effectively as possible. It is for Lord Fraser to determine the time scale against which he reports. I understand that he might report on a similar time scale to mine and certainly not sooner than I report. Matters that relate to his inquiry should properly be addressed to him rather than me.
The Hutton inquiry has engendered a high expectation of your inquiry, coupled with Lord Fraser's inquiry, and a sense that the public would like to see the evidence for themselves, to find out for themselves what happened in relation to the Scottish Parliament and to get at the truth. Therefore, I will start by asking two questions about access and whether information will be made public.
As you know, I have taken a passing interest in the matter and have studied your reports of September 2000 and December 2002. Both reports stated conclusions, but many of the documents that were discussed in the major report and the Flour City report were not made public. That is unfortunate, unnecessary and not, perhaps, required by the law. What will your approach be to making public the documents that, of necessity, you will have access to and will study? Will they all be made public? If not, what criteria will you use to determine which will not be disclosed to the public?
I will answer that question by making a preliminary comment. My statutory duties are clearly prescribed in the Public Finance and Accountability (Scotland) Act 2000, which followed the Scotland Act 1998. There are things that I can do and things that I have no power to do. Strictly speaking, I have no duty to report to the public, although it is clear that making my reports public is in the public interest. I therefore need to take care over the material that I put into the public domain and to have regard to my statutory duties.
The second preliminary point is that my statutory role is to make reports to the Parliament. Through its standing orders, the Parliament has decreed that my reports will be considered primarily by the Audit Committee, which meets in public. Therefore, the Audit Committee has the power to question me thoroughly on my reports and to ask for further documentation that it feels is appropriate. In my reports—such as some of the detailed documents that are on the committee's agenda for today—I endeavour to present as full an analysis as possible of all the evidence and information that I gather, so that the committee has a full picture.
I will narrow my remarks to your question against that context of statutory powers and duties and the openness of the Audit Committee's work, which is important. I form professional judgments that are independent of the Parliament or any other party and are based on the information that I gather through the audit. That information comes from a wide variety of sources and I do not intend to publish them all, but I have regard to the public interest in making available as much as I can. The report represents my findings and conclusions, together with the significant evidence that I gather.
During an audit, we gather partial and incomplete information. I have a concern, which is recognised in the Freedom of Information (Scotland) Act 2002, that if taken out of context, that information could give rise to misleading conclusions. Sometimes, I need to obtain professional work to inform my judgment. In general, it is in the public interest that I judge which technical papers should and should not be made readily available.
Generally speaking, I take the view that if the Audit Committee sought access to papers in taking evidence from me on the basis of my report, I would do my best to accommodate that requirement. However, I cannot give an absolute guarantee that all papers will be made public, for the reasons that I outlined.
Very occasionally, commercial confidentiality might apply to audit papers, which makes it difficult to put them into the public domain. Having said that, I finish by saying that, in principle, I am committed to being as open as possible in communicating with the Parliament on these matters.
I want to mention a particular example—the selection of the construction manager—of an area for which the public may wish to see the documentation. In the report that Sir Robert provided in September 2000, he said that four companies bid for the tender of the construction manager's position. Of those four bids, the second highest was submitted by Bovis. However, that bid was selected. The company that put in the lowest bid was, I believe, a company that had certain well-known connections with the Conservative party. That has already been made public in David Black's book and in other ways. However, in correspondence with your office, Sir Robert, I asked whether the amounts of each of the four bids could be made public. The tender process is over and, as in local government, there is a strong argument for saying that the public is entitled to know, once such a process is over, what bids were made. The public would certainly want a valid explanation, with the provision of documents, of why the lowest bid was not accepted. What was it about the second-highest bid that made it preferable? Your conclusion in the report was that the decision was based on quality, but how could quality be assessed at that stage? What led civil servants to assess quality?
I am not asking you to answer those substantive questions, Sir Robert, but I raise the issue as an example of an area in which the public would want to get at the truth. That can be achieved if everyone—in this room and outwith it—can see all the documents and draw their own conclusions. What would be your approach to that?
You may care to answer that question, Auditor General, but you are here to talk about the report that you are putting together and the evidence that you may then make available, so you do not have to justify previous reports.
Mr Ewing has given me an elevated status to which I am not entitled: I am but an ordinary citizen.
I will try to be helpful and answer Mr Ewing's question. The main point to make is that there will be an opportunity—on the basis of my next report together with the work of Lord Fraser—to revisit these issues. The points that Mr Ewing raises were touched on in my earlier report and I would refer him to particular paragraphs for a full understanding of my position. My report will be available to the committee when it takes evidence in future. At that stage, it may be appropriate to revisit some of these issues, if the committee is minded so to do.
I emphasise that matters that preceded devolution were not, strictly speaking, within my statutory powers, although I established a good understanding with the Scottish Executive that I could mention them. It is very possible that Lord Fraser will look into such matters in more detail than I was able to at the time.
Are you finished, Fergus?
I have different areas to cover, but may I ask just one further question?
Just one, and then we must move on to Margo MacDonald.
Thank you—and I apologise for ennobling Mr Black prematurely.
I want to raise an issue that arises from something that Lord Fraser said last night on "Politics Tonight", a programme in which I took part. I hope that I am not misquoting him. He said that work done in the process of the inquiry may lead to a reduction in costs. I welcome that and, in particular, I hope that the Flour City losses will be recovered from those responsible. Mr Black, do you share the view that the combined inquiries will lead to a reduction in costs? That view would suggest to me that your inquiry will allocate delictual responsibility. In other words, it will say that company A, B or C was negligent. I had understood that that would not be within the remit of your inquiry, or of Lord Fraser's inquiry. What does Lord Fraser think will lead to a reduction in costs? I welcome any such reduction but I am puzzled as to how this inquiry can examine an issue from the point of view of a court trying a negligence case.
As I am sure Mr Ewing will understand, I am not in a position to comment on opinions that Lord Fraser has ventilated on this matter or any other matters that relate to his inquiry.
In our own work, when conducting any audit we have to be mindful that commercial litigation issues may arise. Often, we are looking into cost overruns or poor value for money. In such instances, money may be recoverable through the courts. Therefore, I have to be careful about the terms in which I express my findings on the basis of Audit Scotland work. However, I have statutory powers to report objectively, using the audit process, on matters of fact. We clear those matters of fact quite carefully with the interested parties. It is then for other parties to determine whether information in my reports may be relevant to any further matters that may be pursued in the courts or in other ways.
The short answer is that there is no direct relationship between my work and the likely cost of the parliamentary building. However, some of the information that we produce will be relevant to that.
Fergus Ewing's interpretation of Lord Fraser's words last night is also my interpretation. My impression is that there is likely to be a more transparent examination—not because people have suddenly become nicer but because we have been round the course before and recognise what has to be investigated and explained to the public.
I want to ask the Auditor General about his reference to the use of more consultancy services than he might ordinarily seek to use. Lord Fraser's inquiry arose out of a consultancy report that was not published. I asked whether it could be published so that I, on behalf of the public whom I represent, might better understand the processes that led to the Auditor General's report in 2000. At the time, Mr Black, you explained to me that you did not think it necessary to publish all the consultancy and expert reports. You have reiterated that view this morning. In light of public feeling about this project—and in light of the project's importance to the respect in which the Parliament is held—would you agree that MSPs who have shown a serious interest in the project might be taken more into your confidence than I was over that report? Regretfully, I was forced to make that report public after it had been leaked to me. That report led directly to this inquiry.
I note what Margo MacDonald says and will certainly take it into account in future work of this type. I determined that the particular report to which she refers was technical. I used its contents in the report that I made to the Audit Committee, which I considered to be appropriate. Lord Fraser will have access to the report if he so wishes. There will also be an opportunity for this committee to consider the issues in the round when we consider the entire project at the end of the day. These matters will not go away and there will be opportunities to revisit them in due course.
Will there be a bit more trust between the people who are intimately concerned with the project—either in its construction and management or in its monitoring—and people who may be outside that loop, such as me?
I am not sure that trust is the appropriate word to use in this context. I have statutory powers and duties to investigate through audit and to reach findings on matters of fact. It is inappropriate for me to place trust in people as part of that exercise. I consider matters objectively. The best thing that I can do is to build confidence in the committee that I will continue to analyse thoroughly and objectively all issues of concern, whether they relate to the Scottish Parliament building or to other matters, and report objectively on them to the Parliament. That is my commitment.
If there are no follow-up questions from committee members, that draws the agenda item to a close. I hope that it has been of use to the guest members who came along. They are welcome to stay for the other agenda items if they wish.