Good afternoon. This is the Audit Committee's first meeting on the costs and management of the Holyrood Parliament building project, following the publication of the Auditor General's report and his presentation to the committee last week. We will hold another meeting next Tuesday.
I am happy to answer members' questions.
What, in relation to the Holyrood project, do you regard as policy matters, and on which matters should we remain somewhat circumspect in our questioning this afternoon?
As members know, it is not in my remit to question Executive policy. I suggest, however, that five major issues arise from my report to Parliament. The first is whether the project management was adequate to meet the challenges of the project. That question is really about the mix of skills within the project management team at certain times and about whether the plan was sufficiently clear to ensure proper implementation of the project.
You pose a question in your report about the mix of skills—you also referred to that a moment ago. In paragraph 3.13, you refer to the absence of construction expertise. I can see that it was necessary to ask such questions, but what was the impact of not having a construction manager for a large part of the time?
I deliberately put my comment as a question rather than as an assertion. When I considered the material, it occurred to me that there was perhaps a weakness in the skills that were available to the project management team. Treasury guidance on that is interesting; it recognises the importance of having top-quality project management skills available to projects if they are to proceed according to plan. An added complication is that, for perfectly understandable and appropriate reasons, it was decided to take the construction management procurement route, which leaves more of the risks with the client. It is also quite a complex and demanding arrangement to manage.
Would a construction professional have been able to flag up risks that materialised subsequently?
Yes. That is speculation on my part, but it is reasonable to take the view that somebody who had experience of running such a complex project might have picked up some of the difficulties earlier.
Mr Black, you say that the type of construction management contract left considerable risks with the project. Will you expand on the risks that you believe the project was left open to?
In the report there is an exhibit that outlines different types of contract. I will not go through the process in detail, but in a traditional contract an architect is appointed to design a building. Once the design is broadly settled, cost experts put an indicative price on it and the contract then goes to tender and somebody is selected through competition to build it. The advantages of that are that there is usually a fixed price and the risk is transferred to whoever accepts the tender.
I have a follow-up question. Throughout the report, you mention the uniqueness of the Holyrood project and the fact that it is difficult to compare it with other projects. Could any comparison have been made with other projects in which such a contract had been signed up to?
We were not able to find a comparable project on a similar scale. If I recall correctly, I used the word "unique" in answering a question at the previous meeting. The use of the word in that context reflected the fact that there was a change of client, which is extremely unusual. I would hesitate to use that word in relation to the contract, but it is true that we could not find in the public sector a comparable project of the size and complexity of the Holyrood project and that had been run using the construction management procurement route. That is a question that members might well care to put to other witnesses.
On page 43, you indicate that
I am afraid that the history of large public projects is one of cost overruns. That is not too sweeping a generalisation. A poor track record over decades ultimately led the Treasury to produce guidance. The guidance emphasises the importance of accounting properly for risk. On the Holyrood project, it is important to acknowledge that the Scottish Office recognised at the outset the importance of risk management. It was mentioned in the project brief and two risk workshops were held at early stages of the project—one in August 1998 and one in March 1999. My concern is that I am not convinced that that thinking about the importance of risk was carried forward into the quantification of the financial figures that were used. There was a hiatus somewhere in the process.
You indicated that Treasury guidance was issued in 1997. Are you satisfied that it was adhered to?
No.
Despite that, there is a separate question. In paragraph 3.58, you mention that the risks that were mentioned by the permanent secretary did not materialise and were overtaken by subsequent changes. Despite the fact that the Treasury guidance was not followed, did the fact that a risk assessment was not done turn out to be detrimental?
The memorandum from the permanent secretary to which you refer gives the impression that the need for the separate risk assessment was not entirely accepted in the Scottish Office at the time. The language in the memorandum points to a reluctance to include any additional items without strong justification. Treasury guidance says that items that are definitely included in the base budget must be included in a risk assessment. It also says that things that might happen must be considered to give the client an indication of the overall liability that might be incurred. Treasury guidance is clear that there should be a separate risk assessment.
When you spoke to us last week, you suggested that project management might have encountered major challenges in managing the complex environment, not least because of the change of client and the significant changes in the specification. It is not 100 per cent clear from the report how many of the changes were set in train before the handover.
I acknowledge that there was a view within the Executive that the building could have been built for the budget that was available at the time of handover. However, I cannot give a positive assurance that the project was handed over in very good order. I have three reasons for saying that.
Can you give the committee an idea of what proportion of that list of difficulties came about as a consequence of decisions that were made prior to June 1999? Were any of the difficulties consequent upon what happened to the project management between June 1999 and the identification and reporting of the problems in August 1999?
It is difficult to say what proportion of the difficulties were the result of those decisions. Last summer, we were still at a very early stage of development of the project. In the report, I attempt to apportion the reasons for the increase in cost to extra floor space and improvement in quality. As members can see, some elements of costs of the extra floor space had started to kick in at an early stage. I am afraid, however, that it has not been possible to be specific about what elements of the subsequent cost increase were due to events that occurred before June last year.
Was the Auditor General able to identify the status of the project at the point of handover? In other words, did the then Scottish Office hand to the corporate body a document or report that indicated the status of the project?
From the evidence that was available to me, it seems that the handover was relatively informal. There was an exchange between the antecedent client and the new client about the project, which was supported by the presence of senior civil servants.
Despite the fact that the team had no construction expertise?
As I said, I have put the reference to construction expertise in the form of a question, as the observation is certainly made with the benefit of hindsight. At the time, there were good, well-qualified people from a variety of backgrounds on the team, including people who were experienced in project management. My reflection with the benefit of hindsight is that, in view of the complexity of the contract, perhaps the team needed something more.
The last two paragraphs of the report refer to the establishment of the progress group. You have highlighted a number of concerns with the project up to that point. Do you believe that the establishment of the progress group and the work that it has done so far will ensure that effective control is exercised on the project?
You are right to say that my report stops at the point at which the progress group comes into being. We have not actively examined how things have gone subsequently. It is most encouraging that the corporate body accepted and put into effect pretty well all the Spencely recommendations, not least of which was the recommendation that the progress group should be created. It is also encouraging that the corporate body and the progress group have accepted the recommendations in my report. Against that background, we can be confident that the project is on a much sounder footing than it was before.
What one piece of advice would you, as an auditor, give to the progress group on how it should monitor the project to limit any future difficulties?
Is this within the scope of your report?
This is like "Desert Island Discs". Can I choose a double album?
You referred to local inflation in construction projects. I am reliably informed that it is very high in Edinburgh and that it ain't getting lower. Are you satisfied that the risk assessments that are being built into the new management are coping with that factor? Although you do not make political pronouncements, you will understand that it is politically embarrassing to have to admit that even sticking to the scheme that we have will cost more because of local inflation.
Your first question related to the implication for the project of construction cost inflation in Edinburgh and whether I was satisfied that that would be taken into account through risk assessment. As I remarked a moment ago, the cut-off point for my report is the point at which the progress group came into being—there had to be an end date for my report. I have not examined the project subsequently.
Can I ask one more brief question?
A very brief question, as our time is tight.
You were very generous in saying that the project had difficulties all through 1999 and the earlier part of this year. It took at least 15 months to put right problems that had been flagged up by Mr Bill Armstrong when he left his position as project manager. Do you agree that that suggests that there was very poor management of the project?
It is clear from my report that there were shortcomings in project management in all the areas that I mention—I do not have to repeat them here. The period to which you refer was a very difficult one for all the reasons that I outline in the report.
Thank you. We will adjourn for a couple of minute to allow the next witnesses to take their places.
Meeting adjourned.
On resuming—
I welcome Mr Muir Russell and his colleagues to the Audit Committee. I will run through the form that the questioning will take this afternoon. We are going to ask about project management, cost reporting, managing the project risk and the state of the project at the time of the handover from the Scottish Office to the Scottish Parliamentary Corporate Body. We also intend to consider the forward state of the project, although that is not your concern.
Thank you, convener. I am the permanent secretary at the Scottish Executive and the principal accountable officer of the Scottish Administration. On my left is Robert Gordon, who is now the head of the Executive secretariat. Before that, Robert was the head of the constitution group and was responsible for the devolution project throughout. He was also responsible for matters including the selection of the site and the design team and the oversight of the project until it was transferred to the Scottish Parliamentary Corporate Body. On my right is Dr John Gibbons, the chief architect of the Scottish Executive; before that, he had been the chief architect of the Scottish Office since 1984. He has provided professional advice throughout the project, in support of the project sponsor.
Thank you, Mr Russell. We are not the Public Accounts Committee at Westminster and I hope that in Scotland we will find new ways of working. We might not follow the old and hallowed paths of tradition, but I hope that our approach will lead to a certain amount of elucidation, rather than obfuscation.
I am not quite clear on the dates—the 1998s and the 1999s—to which you have just referred. The point about freezing the scheme relates to March 1999 and the architect was appointed in July 1998. There was an optimistic sequence of expectations about when various stages would be reached, but the period in question runs from July 1998 to March 1999 and to the handover in June 1999.
When I said March 1998, it was a slip of the tongue. I meant March 1999, of course. However, there was almost a year between the appointment of the architect and the handover. The report seemed to suggest that that was quite a long time to come to a point at which the scheme design could be frozen. Let us now move on to deal with the project management.
I want to talk about how the construction management type of contract was chosen. The report says that it was
First of all, let us talk about the choice of the construction management approach, which is discussed in the third section of the report. Quite a lot of thought was given to the elements of procurement. Paragraph 3.19 considers the issue of having private finance initiative procurement for the project. Throughout the process, experienced construction professionals in the office—experienced administrators—were advising on the approach that should be taken.
You used the interesting phrases "in the office" and "associated with the project" in relation to how the decision was arrived at. Did the Scottish Office take outside views on the appropriateness of that type of contract or was the decision entirely internal?
In Paragraph 3.20, there is a suggestion that we should have had a strategy and taken all the decisions at the beginning of the process. What we could do was consult the design team when it was appointed. The design team confirmed that, in its view, the approach was correct. That provided a degree of external validation. My assertion would be that, first and foremost, we were using our professional resources. With hindsight, the decision seems correct.
If the decision were correct, it would be imperative to manage the risks closely. If the risks were left with the future owner of the project, careful consideration would have to have been given to what risks might develop. Is that a fair summary?
The arguments about the procurement route acknowledge that it contains more risks for the client than a single, traditional, one-off contract.
I want to pursue the question of risks. How did the Scottish Office and the Scottish Executive decide who should be the project management personnel?
Project management was arranged in accordance with the good practice gained from the models that are illustrated in section 3 of the report. For example, paragraph 3.8 of the report says:
Yes, but in paragraph 3.13, the Auditor General quite clearly raises a question about the seniority of the construction professional throughout the process and particularly after December 1998 when the previous project manager resigned. Bearing in mind the fact that you chose an innovative construction management contract that leaves many of the risks with the client, are you absolutely clear that the project management team was as robust as possible to cope with the risks that might have been left behind?
I do not want to be facetious, but I was taught never to say never. Your question refers to a world where one could have had more people and a bigger team. However, the project management was properly put together with the right mix of skills and there was no gap for any material period. Furthermore, we were meeting the Treasury guidance's suggestion that where the project sponsor is not a construction professional, a client adviser should be on hand. I really think that we were covered in the project management set-up.
I wonder whether the points outlined in paragraph 3.20 of the report represent one of the areas where you have a different perspective to, or disagree with, the Auditor General. He is not asking a question in that paragraph. He says:
Could we have a question, Ms MacDonald?
Yes, the question is coming.
I do not accept that, nor could one make such a judgment even with hindsight. The contract was the right route to provide the flexibility and the ability to make progress that we needed. Even if we could wind things back, we still could not inject some fixed contract arrangement into the process. I do not know whether either of my colleagues wants to comment on that point.
Construction management is still the most appropriate route to take. It would be very interesting now to see where we would have been with the traditional Joint Contracts Tribunal 1980 contract, taking into account all the problems that the project has encountered.
That is the point. You might not have had the same problems.
We would have had enormous problems with a traditional contract. The flexibility of the construction management procurement route has enabled us to manage our way round some changes to the brief and so on. For those reasons, contrary to what the Auditor General's report suggests, construction management is an increasingly commonplace method of building procurement.
I want to follow on from Euan Robson's line of inquiry. How big was the project management team?
Dr Gibbons has just suggested to me that, in round terms, 20 people were involved.
In paragraphs 3.11 and 3.12 of the report, the Auditor General recognises that the project managers had a lot of previous experience, but he questions whether
I do not have that information with me, but Dr Gibbons will try to answer the question.
As client adviser, I can say that this is one of many projects since 1984 on which we have built up an historical database. We came off the National Museum of Scotland building to the Holyrood project, which means that we had an historic base from which to start.
That is all useful information, but a construction management contract was put in place and I was looking for information on people in your project team who had expertise in managing such a contract.
In theory, all members of the project team were up to speed with the difficulties of construction management. Forms of construction contracts are what those people live and breathe. They were all well aware of the opportunities and benefits that construction management brings, and the risks that one takes in going down that route.
Did any of your team have practical experience?
We very quickly moved to employ Bovis Land Lease (Scotland) Ltd as the construction manager—not as a contractor, but as a member of the team. Bovis supplies us with advice. It is employed as a member of the team and not in the traditional way. It is the biggest construction manager in the world.
Are you saying that none of the 20-strong team that was involved in the construction management had any practical experience of running a project of the construction management type?
I cannot be sure of their exact experience, but all were well versed in the issues that surround construction management.
It might be helpful if you were to find out and let us know, in writing, specific details of the experience that the team had had with construction management projects that were the rough equivalent of this project.
Yes, that information would be easy to provide. A point that I did not make is that you cannot generalise to any great extent about construction management. Every contract is a bespoke contract. We have certainly learned lessons from this project that we will apply to the next. However, I can certainly give you more specific information about the team's relevant expertise in construction management.
One presumes that the members of the project team were there for a purpose.
Yes.
Their previous experience would be important.
Yes, and that experience was in managing construction contracts.
But not this particular type of contract.
What I am trying to say is that every contract is different. However, one approaches every contract with the same basic discipline and knowledge.
Euan Robson mentioned that the original project manager had resigned in December 1998. I appreciate that that position was filled by another person, but why did you not think it appropriate that someone from a construction background be appointed to fill that vacancy?
It is important to get the most appropriate person for the job. I do not accept that, in this context, the construction manager had to have a construction qualification. My experience of working with a number of project managers who do not have construction qualifications is that, by and large, they turn out to be very good project managers. This man had other skills, and that was attractive at the time. He was highly recommended by the person that he replaced—in fact, he was initially recruited by the person that he replaced ultimately to replace him. I therefore do not accept that the role had to be filled by someone with a construction background—especially when that someone had two immediate deputies under him with exactly the skills that you refer to.
Do you believe that the person who was appointed had a strong enough personality to handle the people with whom he was negotiating?
The personality of the project manager is terribly important. We certainly needed a person who could manage carefully the situations that we had at the time, and that is what we got. I made the point earlier about his being a Spanish speaker. He is an able facilitator between the various members of the design team.
Did I pick you up correctly: did you say that he was recommended by the outgoing person?
Yes—that person endorsed the appointment.
You said that the individual who left recommended his successor. Are you saying that the job was not advertised and that there was no specification for it?
At the time, the project manager that we had was due to remain on the project for another nine months. For the interim parliamentary accommodation, we had to recruit another project manager. That recruitment was done with the aid of the first project manager. That is how it came about. I was not involved, but I understand that it was done through a form of competition. I do not know the details.
As you were not involved, I will ask Mr Russell—the senior accountable officer—exactly who was involved. Was an advertisement placed, and was the post open to competition? What was the specification for the job? If you do not have the answer to hand, I would be grateful if you would supply me with that specification.
I would be happy to do that. However, I would make the point that filling the gap and ensuring that there was not a problem seemed a sensible way to respond at the time.
I am not disputing that. I am asking about the method by which the post was filled.
I would be happy to provide you with information about that.
Do you not have that information with you this afternoon? Can you not tell the committee how the post was filled?
No. I am sorry, but I do not have that kind of detail with me.
At the outset of the project, it was expected that the completion date would be July 2001. That was a pretty tight time scale for so challenging and ambitious a project—especially for a Parliament that, at that point, had yet to be established. Do you think that the time scale was sufficient? What led you to believe, at that point, that three years would be long enough?
As I explained, that judgment was made on the basis of the initial feasibility work and costings that were done and on the set-up following site identification and the appointment of architects. It was the best professional judgment that could be made. Anybody looking at it would have said that it was demanding. It was not stupid or ridiculous; it was not a figure that was simply plucked out of the air. It was based on the work that John Gibbons and his colleagues were doing.
If the figure was not plucked out of the air, who took the decision? Can you give any examples of similar challenging projects that were completed in such short time scales and on budget?
The decision was ultimately a ministerial one, based on the best advice—of the kind that I have described—that we could give. In drawing up time scales, people consider what is achievable in all aspects and phases of a construction project. To that extent, the decision is based on a composite of experience, rather than saying, "There is a parliament building or office block that we are just going to mimic." The decision is not made in quite that way. This project will have different kinds of construction demands and emphases. Anyone considering the project in the notional design stage at the outset will simply say roughly how things will go and how long they think it will take.
I can appreciate that you did not look at a list, but did you look, for example, at Portcullis House, which Spencely referred to? That was a considerable building project that affected the Westminster Parliament and involved parliamentarians. Could you have learned anything from that project, or compared the Holyrood project with it?
I do not think that we could have said explicitly, "We are mimicking it", "We are not mimicking it" or, "Don't build a building on top of an underground station." The project was not viewed in that way, to the best of my knowledge. John Spencely's report, pointing out the cost of Portcullis House, offered the unit costs that he worked out as a benchmark for a parliamentary building that is built to good-quality international design. The costs were high, but we did not think that that sort of information would be needed up front by John Gibbons and his colleagues.
At the point of selection, all the architectural contenders showed us their plans for delivering the project. A number of architectural firms made that commitment; all of them said that it was tight but deliverable in autumn 2001.
Was any mechanism to monitor the time scale built in, to see whether it was going to work and that the timetable was a serious one?
Yes. One of the key roles of project management and the project sponsor was to see that the very detailed project timetables were being met. The permanent secretary mentioned that in spring 1999 we faced the problem that stage D finalisation was not being achieved as quickly as had been intended, that we were not getting sign-off in March. We were close to it in June.
Time is marching on. Please make your questions and answers succinct if possible.
I will keep my second question short. You anticipated that the design period would be nine months but it was nearly two years. Can you give me any examples of similarly challenging projects where the design period was as short as nine months? If you had looked for similar projects, do you believe that might have suggested that nine months was a bit tight?
John, are there examples you can point to in the profession?
We put the design and building programmes to all the competitors and all agreed that the time scale was realistic. The building component of the programme is based on spend and there are distinct advantages to building quickly. I have no doubt that we could have built a £50 million project in the time available. Yes, it was a challenging design programme and that is the more difficult aspect to estimate because design does not just happen, as we found out in the protracted design period. It did not all come together as sweetly as we would have liked—but that would have been difficult to predict.
Just to be clear on the timings, the design for what was going to be stage D was available and exhibited in early April. As I will explain when we talk about the state of the project at handover in June 1999, the stage D report was for all practical purposes ready at that time and planning permission for that design was about to be obtained. The project was really quite well crystallised at that point. The following year is another phase in the life of the project and there was slippage in terms of the initial judgments that we made and targets that we set. It should be thought of in terms of the period March to June 1999 rather than March 1999 to June of the following year.
You discussed the replacement of the project manager following his resignation. Would you say that the appointment procedure was usual or unusual?
Filling a post urgently with a suitable, available professional who is in the system does not seem to me a silly thing to do. I come from a culture that commonly moves people from one post to another; you would not axiomatically look outside if you had resources inside. We will get back to Margaret Jamieson with details of how that appointment was handled, but to fill a gap with somebody who was suitable, on all the grounds that John Gibbons has explained—
With respect, that is an answer to a different question than the one I posed. I asked if it would be a usual or unusual procedure. However I am happy to have the details as part of your written response. We need to know whether in such circumstances that would be the normal course of action.
You are right to indicate that there needs to be a range of dates—that is the real world. When we were talking about the various announcements made on timing we used phrases such as "the second half of 2001" or "autumn 2001", acknowledging that it is not possible to be precise at the stage when you are talking about preferred sites, for example.
It is always difficult to draw the line between optimism and being unrealistic.
For clarification, did you ever advise against the original timetable? I think you said earlier that it was a ministerial decision.
I said that it was based on official advice—
Did no one advise Donald Dewar that it was an extremely tight timetable?
I do not have the words at my fingertips, but I think that the advice he would have been given would have indicated that it was demanding but achievable.
Could you explain why you switched the competition from a design to a designer competition, as the Auditor General's report says?
I do not think that we switched it. The decision taken at the start was to go for a designer competition.
Given that the reason for a designer competition was that you felt that by having a relationship with a designer, as opposed to a design target to be met, you would bring the project in on time and on budget, was that the correct decision?
I will ask John Gibbons to comment on that, but the basic judgment was that with a designer you would have more of a relationship and more control over what was happening than you would have had following a design competition.
That is the case. We looked very carefully at the question of design versus designer and selected a designer competition for that reason. It meant that we could move very quickly to having an architect working with us on developing the brief rather than waiting until the brief was finished. He also had a responsibility for the development of the brief.
I am going to move on but, as convener, I want to indulge myself with a short question. You raised an interesting point about communications—that one of the reasons for choosing the project manager's successor was that he spoke Spanish. Was he the only Spanish speaker on the project team? How was communication between the Spanish architect and the project team handled? I met Enric Miralles and thought that his English was remarkably good, but I can understand how the nuances of architecture may be lost in the mists of language.
I shall ask John Gibbons to comment on that, as he has been integrally involved. We should bear in mind that the project is a joint venture with a large Edinburgh-based practice, RMJM. The interface with the project team was not always and uniquely with people in Barcelona.
Enric Miralles had a substantial team in Barcelona, and he and his wife both spoke excellent English. That was not a difficulty. I was careful to say "nuances", because any difficulties involved only nuances of the language. It was in matters of contract rather than design that we had to be very careful and specific, so it was a help to have a Spanish-speaking project manager. I would not place a great deal of stress on that, but it was a benefit.
Did you have any other Spanish expertise? Did you have Spanish lawyers on the project team?
No.
I shall now move on to the next section, on cost reporting, and I invite Paul Martin to open the questioning.
In paragraph 3.50 on page 41 of the report, Mr Black states that
The answer to that is essentially in the same area as the reasoning that was set out in the annexe to the report that relates to the other incident or phase that is mentioned, involving the estimates that were built up at the time of handover. The approach that was being taken was quite clearly to aim to deliver the project for the £50 million. The design that came in at that stage was quite a preliminary one and was the subject of a huge amount of discussion and debate between the project team and the design team. It is in the nature of such things that a design team will come forward with ideas on many features that it would be nice to have but which, when aiming to stay within a certain cost, the project team must reject. That is the process, and nothing that the Auditor General has said about putting a risk margin on top undermines the notion that it is the proper function of a project team with such a brief to react in that way.
You are almost saying that you were uncertain about the figure of £69 million. Is it correct to say that you and your team were uncertain about that figure?
The figure of £69 million was an estimate of the cost of the preliminary design as it appeared at that stage of its evolution. I think that that estimate was made in the autumn.
I am trying my best to translate exactly what you are saying. You are saying that you were uncertain about that figure and that that is why the Secretary of State for Scotland was not advised of the exact figure in November 1998. You have not answered that question.
The answer is that that was a stage in the design process. A quick costing was done, and it looked as if the cost would be £69 million. It was clear that it was more than the budgeted amount. The job of the project team was to get the amount back within budget rather than to accept it. That is why people did not tell the secretary of state that the budget needed to be increased. They were working to get the cost down.
Can you clarify this point? Mr Black's report shows that up to £2 million has been spent so far on cost consultants to the project management. That is a large amount of money. Why did you not accept the consultant's cost analysis? Why did you not take that expert advice?
I will answer that by reference to the comparable process that took place for the handover estimate. Annexe B of the report explains that the cost consultant produced an expected cost of £62 million—there was contingency and various other elements to add to that. One element was a little list of things that might happen. Those things were sliced out and not included in the published estimate. Paragraph 3.58 acknowledges that they did not materialise.
Could I come in on that point?
Could I ask you to wait a moment?
Who in the project team took the decision not to provide this information to the secretary of state? Was it you, as the accountable officer, or was it the project team?
The decision was taken by the project team, which said that, in its professional judgment, those things, which would burst the budget, need not happen, and that therefore it would keep working on them and would not report them as an increase in the budget.
With the greatest respect, I have asked a very clear question. Who decided not to advise the secretary of state of the fact that costs were escalating? Was it you or the project team? I am asking for an answer to a very clear question, Mr Russell.
I will give you a very clear answer. That decision was taken by the project team.
Were you made aware of the £69 million cost estimate, and of the fact that the project team had decided not to inform the secretary of state of the estimate?
I do not recall being told that there was a price for the preliminary design in November 1998 that was higher or lower than £50 million. The design was very much a preliminary exhibit of what was evolving from the work of Miralles and RMJM. It was part of a process of explaining how the project was coming on and how the design was developing, after all the talk in the summer of upturned boats.
You are telling us quite clearly that you were not informed that the cost estimates were well over budget, and that therefore you could not have advised the secretary of state.
It would be fair to let Mr Russell refer to Mr Gordon at this stage.
The point is that in autumn 1998 illustrative options were displayed. There was an iterative process going on between the architects, the cost consultants and the project team. The message that went back to the design team at that point was that, if it continued with such a design, it would be over budget, so it had to work to bring the design back within budget. That process could reasonably be contained at project level and was not one that needed to engage ministers at that stage, as no one was saying that more money would have to be spent on the project. There was a professional process of telling the design team that, although the design, which was then at outline stage, was all very well, the team had to get the costs of developing it down.
That is the real world. In accepting that such a process was going on, I would not expect to be involved in any crunch decision about what was or was not advised, and I was not involved.
Who was the head of the project team? Does it not seem unusual to have an estimate that is higher than the original budget of £50 million by a third? How could you say with any certainty that you would reduce such an overrun, given that there was an evolving design? If the design were evolving, one would not know what the end point would be. You did not have cost estimates done, so how could you say with any certainty that that amount would be reduced to the figure of which the secretary of state had been informed and which he had announced to Parliament?
One could not say that with certainty, but people were trying to reduce the amount.
Who was the head of the project team?
The project owner was the then director of administrative services in the Scottish Office. That person was between Robert Gordon and the main team.
And that person, who was not as senior as Mr Gordon, took full responsibility for the overrun of the budget?
Remember, there was no overrun of the budget. A design was being developed. People were working on it and attempting to make it cost as close as possible to the budget amount. As you say, the budget had been announced, and one does not change such things lightly.
I appreciate what you say, but I cannot see how you could have any confidence in the outcome. If you had no confidence in the outcome, I would have thought that the secretary of state should have been informed that there was a problem.
All I can say is that people were doing their best to get the project on track. A few months before, when they were appointed, the architects had made it clear that they thought the project could be completed for £50 million. It was the job of the project team to say to the design team, "Right, guys, come on." When, after the first cut at it, the design looked more expensive than had been envisaged, it was the project team's job to get the cost back into shape. I do not think that it is unreasonable that a project team should try to do that.
The process is not unreasonable.
We will move on, as I think that what is being discussed will be developed in further questions.
In paragraph 3.34, Mr Black talks about the lessons that the Government learned in 1997 from the British Library project in London and refers to the financial incentives to complete projects on time. Why were there no incentives in place for the consultants?
Do you mean the idea that the fee might have been scaled in some way?
Yes, I am talking about incentives for the consultants to complete the project in time. There were quite clearly lessons for the Government to learn from the 1997 British Library project in London.
As far as the handling of fees is concerned, we must remember that what the Auditor General is saying is pretty tentative stuff. It is not possible to say with certainty what wider impact different fee arrangements may have had; they might not necessarily have been more economic in this case. I hope that that sets the context. We are talking about a pretty tentative suggestion.
Before we do, Mr Russell, Paul Martin has another question for you.
I know that we are pressed for time, so I shall conclude on this point. It is quite clear that, in 1997, it was Government policy for fee incentives to be used, lessons having been learnt from the British Library project. Are you telling me, Mr Russell, that you decided, as permanent secretary at the Scottish Office, not to act according to the Government policy of the time, which was to introduce fee incentives for cost consultants? That was clearly Government policy in 1997, but you decided not to follow that line for the Holyrood project.
The context in which that is being offered does not state that it will always automatically be possible to agree with the profession the sort of fee that would be in exhibit 15. I do not think that the Auditor General is suggesting that it would have been doable, and I do not think that he is insisting that it would have been better. He is saying that it is something that might have been considered. In so far as there is a lesson for us to learn for the future about that, you may rest assured that we will learn it.
We fully support the concept of fee incentivisation. There is a place for it, but this was not the place for it. The context was set by an international designer competition, and that is the real world in which we were working. We had to find a fee package that would be compatible with the people that we were trying to attract. The mechanism that we set in place was to use a database of competitive fee arrangements as a yardstick. At the end of the day, we compared the fee that was put forward with the database, and it was acceptable.
What the committee would like to know in this context is whether any attempt was made to negotiate a fee or whether it was just accepted, in the view of someone in the organisation, that it would not be acceptable to the sort of architect who would be attracted to the competition. I would have thought that a project such as the Scottish Parliament building—with international prestige and visibility—would have presented an ideal opportunity to negotiate on the basis of a reduced or capped-fee basis.
I do not see it quite like that. The arrangements that we had in place were appropriate for what we were trying to do. We know that signature architects are at the expensive end of the market. The arrangement that we put in place was to select the architect on the basis of the quality of what the architect had to offer. There was no attempt to get a specific design, but there was an attempt to talk to the architect about the concept that he brought to the project.
For clarity, let me confirm that you are saying that there was no attempt made to negotiate fees. Things were accepted on the basis of what happened to be in a database.
Yes. A fee that we thought represented value for money was placed on record. We used a two-envelope system. The second part of the competition consisted of the final five architects submitting an envelope that contained the fee proposal. The envelope from the architect who had been selected on the basis of quality was opened first. It was agreed that, if that fee proposal fell within the band, it would be accepted. That was agreed on the basis of advice from the International Union of Architects and the Royal Institute of British Architects.
Paragraph 3.43 talks about the lack of a cost plan. Why did the project team, the design team, the project manager and the cost consultant not agree a cost plan in March 1999 for delivering the project as first planned?
We have touched on the fact that it was not possible to freeze the design at that stage. I have said that the design was about to be frozen at the beginning of June. That is the stage at which one would have expected to see the material that was immediately to hand come together in the shape of a draft cost plan. A cost plan would have been available on that basis had the design as it stood at that stage gone forward.
I can see that it would be difficult to produce a cost plan if there were no firm design. However, the Auditor General suggests that a provisional cost plan could have been agreed between the parties. At that stage, would it not have been sensible to prepare at least a brief outline cost plan on the basis of the design, even though that design had not been finally signed off?
John, can you say how much information there was around the cost plan at that stage?
At that stage we felt that we could have moved to a finalised cost plan within the four-week period. Some issues had to be agreed between the design team and the project team about the extent of the specification, but we had quantified those. We felt comfortable that we could have moved to a completed cost plan on the basis that there would be no change to the design that was agreed at that time.
I would not want to leave the committee with the impression that people were negligently breezing ahead without going through various disciplines. The reason why there could not be a finalised plan was that the design was not finalised. However, that plan was coming together.
I am sure that people were going through the disciplines, but the fact is that no cost plan was produced. The fact that they went through the disciplines did not have much effect on the final outcome, did it?
Meeting adjourned.
On resuming—
We will move on to discuss whether there was insufficient accounting for risk.
Convener, before we move on, I would like to ask one other question on the previous topic, if that is all right.
Yes, of course.
Mr Russell, you said that you were unaware of the explosion, or the increase, in costs in November 1998. When did you become aware of it?
I think that we should be aware of the phraseology that we use. We are talking about a preliminary design with a cost rounded higher than the budget. To call it an explosion in costs is perhaps a little over the top.
I corrected that to "increase".
I became aware that the project team was forming the view that it was not possible to live within the £50 million in the advice that was being prepared in the period leading up to handover. The questions then were to what extent ministers would accept the changes and increases that were envisaged, how those increases would be handled and explained, and what the relationship would be with the SPCB. That was when dealing with the issue became an active process.
You are saying that that happened broadly around the time of handover, but you do not give a specific date.
It was part of the process of working towards handover.
Are you saying that the cost consultants, who were paid a considerable sum of money, reported to the project team in November that there was an increase—or whatever you want to call it—in costs at that time, but that you, as accountable officer, knew nothing of it until six months later?
In terms of engaging it as an issue that I had to tackle, yes.
The project team did not report an increase in costs in November 1998 to the accountable officer or to any of your colleagues, and that increase emerged only during the approach to the handover, but at no specific date.
I will have to defer to others in the hierarchy on points concerning the supervising of the project. Robert Gordon can explain more about that.
Mr Wilson refers to this as an increase in costs. As I explained, what we had in autumn 1998 was an indicative proposal that the cost consultants said would cost more than the budget. Thereafter, the design team was sent away to rework the proposal to bring it within budget. That iterative process continued throughout that period and into spring 1999. As Mr Russell said, at the point of preparing for handover, when we were almost rounding off stage D, we were having to take decisions on whether the £50 million budget was the right budget or whether an increase should be allowed—which, of course, is what was done.
So no one stewarding the project—from the First Minister through to the accountable officer or anyone else in the civil service—was aware that the significantly recompensed cost consultants had suggested that this issue was a live one before the turn of the year. I find that bemusing—in terms of the control of the significant costs by the civil servants as opposed to the project team.
I am asking you to accept that the project team was zealously doing its best to contain the cost of the project. It was working on design and on ideas that were coming from the design team, and it was conscious of the obvious need—which I do not think anyone here would challenge—to live within an expressed target figure. That is what it was trying to do. It was not satisfied that it was ready to trigger a process of putting up the budget, and it was not satisfied that it was ready to say that, in its professional judgment, that had to happen. Now, the team may have been wrong—that is a judgment that this committee will make, informed by the comments that the Auditor General has made. However, the team was as zealous as it could be.
Would you, as accountable officer, not have found it desirable to know that the cost consultants had said that there was at least a possibility that the budget would be breached and that more funding would be required? Do you agree with the conclusion that it was more and not less important that the client, at the highest level, be informed of the cost consultants' report? Do you think that that was desirable or not desirable? We know that the team was doing its best—there is no question about that—but the question is whether it was right to keep that information from you.
I do not believe that it would have kept it from me or from anyone at a point at which it would have had an impact on commitment of money.
Nor do I.
Remember that this all happened at the design stage when many things were fluid. The team would not have kept information from me if it had related to some part of the financial processes of the office. The team was working away in its area of business trying to get this right. That is what was happening, and it is not clear to me that reporting to me, as a matter of practicality, would have—
Accountability, surely?
I was not spending that money and I was not signing cheques. The project was still at a pretty early stage, well in advance of tender documents or designs that would have led to spend. The notion that there was accountability for money that was going out the door is not valid.
I must insist that we move on to ask about insufficient accounting for risk.
The report said that the procurement strategy lacked a systematic assessment of the risks to the project. What was your appreciation of the risks in the chosen procurement route—designer appointment and subsequent construction management—and how did you plan to manage the risks, given that no systematic assessment was made?
We have already discussed the construction management route and have established that it provided flexibility to cope with the evolving nature of the project. I hope that we have established that nobody thinks that that was wrong. The fundamental question of assessing risk at the beginning is logical and acceptable for particular projects and contracts. However, at the very earliest stage, when discussing working to a target budget, I find it difficult to accept the practice of adding on another number. I suggest that it makes it harder for the project team to live with the basic target if one lets it be known that one has another £N million in one's back pocket.
I would have thought that the early stages to which you are saying it is not legitimate or realistic to apply a risk assessment are the very stages where such an assessment is necessary. Surely, when dealing with such an open-ended project, a contingency well beyond that of 10 per cent, which is in place now the plans are firmer, should apply at an early stage.
You are saying that it might have been prudent to have said that we were working to a £50 million target, but to have run the public finances on the basis that it might cost more.
Is not that what the Treasury asked you to do?
I do not think that that is the point of the Treasury guidance. The guidance is about saying, "We are going to build this for £50 million, but we might be beaten up to £70 million."
Are you saying that a risk assessment should apply only when the risks are small and intangible, rather than at the start of a project when they are quite the opposite?
I will not say yes to that question. I would say that a risk assessment should not apply at that stage of such a project.
And the Treasury guidance?
It is guidance—the sort of thing that has to be tailored to meet the circumstances of particular projects at various stages. We would not ignore Treasury guidance. I would not say that my office would ignore Treasury guidance systematically; it will use such guidance maturely. It is important to understand how that is translated from the general to the particular.
On the Treasury guidance, there is a gap between theory and practice. We are aware of the guidance, which, as the permanent secretary has said, is just that—guidance. We have considered using the risk allowances as the Treasury suggests on other projects. It is very difficult to work in that way without encouraging inflation within the project. As soon as we identify a risk, we have to have the resources to deal with that risk.
You seem to be telling us that a risk assessment is an incentive to overrun on cost.
In theory, it is desirable to carry out a risk assessment. However, in practice, particularly in the public sector, where we disclose our accounting, what we set on one side as a risk allowance will become known to the design team fairly quickly and soon becomes the upper working limit. That is the difficulty that we have encountered when we have tried to translate the theory into practice.
With respect, you are asking us to agree to the idea that Treasury guidance is inappropriate in this case and that it is an inappropriate policy approach because it encourages inflation in public sector projects, although it is designed to do the opposite. I find that bemusing.
All that I was saying is that that approach can cause inflation within the context of an individual project.
In that case, why does the guidance exist?
We have to develop a method to apply the guidance in practice. The new building was not a project on which we wanted to develop another bit of theory; it was a project that had to be delivered in a tight time scale and in the public arena. The theory on risk allowance has developed largely from the private sector, where there is greater flexibility in the approach to procurement.
I assume that you have written to the Treasury about your views on the inappropriateness of the guidelines, not just to this specific project, but in general.
The Treasury is well aware of the Scottish Executive's views on some of its guidance.
We are straying from the point slightly.
Annexe B of the Auditor General's report includes your minute to the First Minister, which explains that the project team had made the judgment that a number of risks that your cost consultants had included in their reports would not materialise. What advice had they received to support such a judgment?
That was the team's professional judgment. Those people work daily with designs and plans, talk to the design team, look at the brief and decide that the standard is already high enough, that high spec has already been designed in; and that we do not need some of the major risk allowances that are mentioned in the minute. For example, we do not need any art, as the art is the building. However, we need to take into account issues such as contingency. The project team makes those judgments as professionals, keeping their end of the wicket with the design team at the other end. Although I might be getting boring about this point, the matter comes back to the project team's aim to live within a budget. At the time, the team had accepted that the figure was moving from £50 million to £62 million; however, it had recommended that identified specific elements should not get into the frame, except to the extent that I have explained.
Given the professional advice that you had received, were you satisfied with that report to the First Minister?
Yes. Given the way that things had been handled, it was very important to be crystal clear for the public record that this had happened in the middle of activity between the design team and project team and had not broken out into First Minister world at all.
One of the cost consultants' risk allowances that the project team completely rejected was £5 million for delays during the handover to the SPCB. What was the rationale underpinning that judgment?
The rationale was that we were handing over the whole running show—the people on the project team who were fully familiar with the project. That risk allowance was recommended in case the team would have to stop and start one month along the chart, and the clear implication of ruling out such a recommendation is that that would not happen. When we come to discuss the handover, I will mention what was flowing through the system at that point, and nothing in the mechanics of the handover would have stopped anything. As it turned out, a quite different dimension of change was created. However, the cost consultants were not saying that the Parliament would redesign the project.
If I understand you correctly, there was a recommended £5 million allowance for a brief delay in the construction following handover, which you discounted, but there were no allowances for the client making any design changes.
That is correct. If the client wanted to make design changes, that would be a budget factor for the client.
Last week, the Auditor General said that he was concerned that
That question probably does not lie within Mr Russell's province. We have already established that there was no cost plan in place on handover, and I think that that is as far as Mr Russell's brief goes.
For my information, convener, who is currently responsible for a cost plan?
The responsibility now lies with the new client and, through it, Paul Grice as clerk to the Parliament and principal accounting officer of the Scottish Parliament.
I just wanted to know because it has been difficult to find out who knew what, when.
If you will just pause as we move on to discuss the status of the project on handover, we might explore the subject more fully.
There is a short answer to Ms MacDonald's question. Although I do not want to transgress on Paul Grice's area and the ground that you will cover with him, I understand that there is a definitive cost plan reflecting the stage D that the changed design has now reached.
Thank you. I want to move on to the next stage, which is the status of the project in June 1999 at the point when responsibility for the project was transferred to the SPCB.
I do not know whether Andrew Wilson set a bad example, but I will follow him and start with a question on the previous matter. Throughout this evidence-taking session, cost and time pressures have been mentioned as reasons why you used certain processes for the management and cost reporting of the contract. Do you accept that, as the project is outside the budget and the deadline, those processes actually failed?
I agree that the processes did not deliver a project for £50 million and that it was right to amend and increase aspects of the brief, with associated cost drives. Beyond that, "failed" is a big word to use to describe an evolving process. You will understand if I do not agree with the use of that word. The outcome was different in a number of what I believe are explicable and justifiable respects. We have got into semantics now—I am sorry.
Given that much of what we have covered so far is to do with the process of how the situation was arrived at, and given that you have dismissed the alternatives that were suggested by the Auditor General for Scotland, have you an idea of how you would tackle the matter now? Dr Gibbons said that lessons were to be learnt from the process. Would you use the process for another major project, or would you use an alternative?
That is a difficult question. I am not sure that the Auditor General for Scotland is offering you a set of prescriptions that he thinks would definitively have made a great difference. I am not sure that he is doing more than answering what he described as quite tentative questions. With regard to his comments on the project management expertise, I am not sure that he has made the linkage between his risk graph and the outcome as I have explained it. There are wee gaps between the Auditor General for Scotland's comments, which are about aspects of process as defined in guidance, some of which is dated 1999, which means that it came after we had started on the project and is not relevant to the reality of what we were trying to do. That does not mean that everything that we did is perfect.
Mr Black was at great pains to indicate to us that he had some questions. Perhaps you might care to offer your view of what the answers should be—perhaps not immediately, but after having had some time to consider the issue further. Perhaps Dr Gibbons could tell us what lessons could be learned from what has happened—again, that could be done at a later date.
If we could at least get the train out of the station, Mr Adam.
The report says that, when the project was transferred to the Scottish Parliamentary Corporate Body in June 1999, there should have been an independent review. What evidence did you have about the health of the project immediately prior to transfer?
We must think of what it was that was handed over. It was a project that had been subject to all the processes that I have talked about, going right back to the setting of the target figure and the one-year consultation on the brief in the real world. The process had built and developed the design during that time and, after a lot of huffing and puffing and reluctance on the part of the team, it had been agreed that there were some increases that should go in and were perfectly well justified.
I know that you listened to Mr Black's evidence earlier. I asked him, in relation to the statement that he made to us last week, whether he would clarify where and when in the process the additional specifications that led to some of the additional costs came in. He said that he was not sure whether he could differentiate between what was before and what after the handover. Will you or your colleagues give us guidance on how much of the 47 per cent additional costs due to enhanced specifications was as a consequence of decisions, thoughts or discussions prior to the handover and how much after the handover?
There was a lot of redesign work as a consequence of a decision to revisit the shape of the chamber. Somewhere we are told that 75 per cent or 80 per cent of the design work had to be redone as a result of that and the other changes that were—
That is one element of it, but it might be helpful if you could write to us about that. It is a detailed technical point. Would it be reasonable to ask you to do that in a fairly short time scale?
Can I make sure that I fully understand the question? The report says that 50 per cent of the cost increase was due to size factors, and that 50 per cent, give or take, was due to quality—or rather area and quality. You would like me to say how much of that rise in the construction costs from £50 million to £108 million was included in the £62 million and how much came later. You are asking whether that was to do with area or quality.
I am not just referring to the amount of the increase taken into account for the £62 million figure, as there must be some doubts about that figure. How much of the increase was because of processes, discussions and decisions? How much of that was before the handover of the project to the SPCB and how much of it was post-handover?
We will do our best to answer that. Remember that the £62 million contained a DLE estimate. The base estimate was DLE, and there was then an extra figure.
I know that there was another £6 million in contingencies.
There is a lot of firmness around the £62 million figure. I am very happy to try to answer that question for you, Mr Adam, and we obviously want to do that fairly quickly. The question of what happened over the cusp is something that you might also have questions about.
Yes, I would appreciate that. It was not until June this year that the project management, the cost consultants, the design team and the construction manager were able broadly to agree on the expected total construction costs of the project. Why did that not happen before the transfer to the corporate body in June 1999? Exhibit 18, the graph on page 41 of the report, shows the consistent gap between the different figures for the estimated expenditure, and the figures only come together at a later stage, this year.
The process that would have ensued in June and July 1999, if the decision had simply been to continue with the handover, would have closed that gap fairly quickly. Manifestly, the £25 million or £27 million would not have been included, stage D would have been ready and some of the issues that were subsequently opened up would not have been opened up. Planning permission was about to come through. The figures were on a convergence course—and that is the difference. Perfectly legitimately, for reasons that I do not remotely want to challenge, the members of the Parliament decided that they would consider other options, and that led in different directions.
I notice that you used the phrase "closed down". In reality, the gap between the two estimates was closed up, was it not? By that I mean that the figure which was budgeted for had to increase in order to meet the figure that had been suggested by the cost consultants. In fact, it got very close to the cost consultants' figure, which had been in existence for several months.
You will have to ask the people who have formal responsibility for that.
Yes, but my point is that the gap between the different figures was always there. At the time when the figures closed together, if I may phrase it that way, it happened to be under someone else's responsibility. However, the gap was consistent throughout.
Do not forget the value of engineering, the £20 million. Most of that was lost because, in the mêlée of redesign, the savings could not then be delivered. It is a dynamic situation, and you have to remember that, once the constraints are taken off, a lot of different things run in.
Can I ask—
No, sorry. I want to bring in Euan Robson first.
For the sake of clarity, I refer you to annexe B, paragraph 1, in which you say:
I cannot tell you what the project team then did in relation to the corporate body in terms of indicating any aspects of the back history. Given that the team had made the judgment that those things were not going to happen, I suspect that that is right, but I am guessing. I have not asked.
Why did you not insist on a firm design before the transfer to the SPCB? Was it not originally intended that there should be a firm design?
Yes, it was.
Coming back to my question about cost transfer, why did you not insist on a firm design, so that you could at least give a baseline to the SPCB for any changes that it might want to make?
The transfer date was set in statute. People were doing their best to work towards it. I know that it was not a firm design, because stage D was not complete. The information that I have is that it was a few weeks away. It was substantially complete; there were a few details to deal with to complete it. I have given you the other elements of context that suggest to me that the design was firm and was being reacted to by planning authorities and others. People were working very hard. They missed the date by a few weeks, but the numbers that they had for the cost were robust in terms of what stage D was going to show.
One of the areas of potential risk identified in the report is the recommended £5 million allowance for the handover. That struck me as rather odd, as it was broadly the same project team before and after the handover. Where was the big risk?
Precisely. That was the judgment that members of the project team also made—that is why they knocked it out.
We now know that the project ran into difficulties in August 1999, about three months after the SPCB became responsible. How many of the points in paragraph 1.18 on page 12 of the Auditor General's report do you think arose from the Executive's period of stewardship? In particular, I would like to get back to the business of the design element, as it seems that the design team designed the chamber to a design that did not meet with universal approval—that is an understatement—when it came before MSPs.
I could make the rather jejune point that there were no MSPs until May 1999, but there was a process of consultation, which Robert Gordon and John Gibbons can explain.
There were public exhibitions of the emerging proposals and people had an opportunity to comment on them. There had been consultations with the political parties on the design brief. The design team was picking up the language from the consultative steering group, to get a feel for what kind of Parliament this was going to be. For example, one of the objectives was to avoid the adversarial nature of the chamber in Westminster, and the architect had come up with a shape to achieve that. Ministers were not inclined to impose a view on the design at that stage.
We had developed a well-detailed brief on the basis of a series of desk appraisals of modern parliamentary designs and the consultation process that Robert Gordon mentioned. The design, in what we call the not-quite-finalised stage D, fully met the requirements of that brief, so the architect had not in any way strayed from what he had been asked to do. At that time, the concern that you have referred to was emerging: some MSPs were not entirely enamoured of the idea of a banana-shaped chamber, as I think it was described at the time.
That was one of the descriptions that was applied to it.
I would like to be clearer about some of the answers that have been given to Mr Adam and to you, convener. Looking at the various items in the Spencely report for stage D at the end of May, we see such headings as "Enhancement" and "Contingencies & Design Reserve". You did not think that the risk of change to those items was alive before handover. However, within 12 weeks, all but one of the figures has considerably increased. The Auditor General was clear that, in his view, not a great deal had changed during that 12-week period to have brought the increases about. However, you have said that they were all due to changes in that 12-week period. As Lord James said, both views cannot prevail. How are we to make a judgment? Whom do we trust? Can we have more of an explanation?
If Mr Wilson will allow me just a second, I will try to decode some numbers from Spencely.
Okay.
I heard the Auditor General suggesting that, if I may put it crudely, things could not have been all that well with what was handed over if so much changed so quickly. Mr Wilson has made that point too. The other view is that specific things were changed that accounted for the differences. If that is the case, it is only fair that members should know about it. My gut feeling is that the latter view is correct, but I will need to analyse these numbers to help Mr Wilson with that.
That would be helpful.
I will do that by next week, when you are seeing Paul Grice.
I asked a question about paragraph 1.18 of the Auditor General's report. We have acknowledged that there were no MSPs to be awkward before the Parliament first assembled, but what about the other elements in paragraph 1.18? Which ones were in your control and affected the project after it was handed over to the SPCB?
My clear impression is that the process that I described, with much hand waving and words like "closed down", did in fact change quite dramatically, instantly, in terms of where resources were going. People were travelling, looking at different design possibilities, and they were not closing it down, but were into a different ball game.
I think that there are distinct possibilities of overlap on this issue between you and the other accountable officer. I am sure that Paul Grice's views will also be taken into account. We may want to return to that in the future.
In Mr Black's report Mr Russell points out that the cost reporting was unsystematic and did not give equal emphasis to different aspects. Why did you not make sure that all the relevant cost information was reported up the line on a regular and consistent basis?
What was being targeted was in the public eye. The headline number was the construction cost; that was the thing you could find all the way through. At various times, as things began to crystallise, other elements entered into the information as people were able to give it. The central thing was the construction cost, which was systematically reported on. As I say, when other elements were settled and people began to get a handle on the associated costs, they emerged into the public domain as well.
I would like a yes or no answer. In paragraph 3.51, Mr Black points out that the reports were
They were systematic in relation to construction costs. At various times, reports included elements such as fitting out costs—that is what the Auditor General is referring to when he talks about estimating fees, furniture and VAT. Some reports included those costs and others focused on the central construction cost. I am content to put up my hand and say that the Auditor General is right on that point. He has seen the documents; I would not say that he cannot read.
I thank Mr Russell, Dr Gibbons and Mr Gordon. I would like to remind you what we have agreed this afternoon. You will provide: notes on the degree of practical experience of construction management projects in the project team; details of the job specification for the replacement project manager and the method of his recruitment; an outline of the general lessons that the Executive has learned from its involvement in the construction of the new Parliament—I look forward to that one—and a note on the proportions of the increase in construction costs that are attributable pre and post-handover.
On behalf of my colleagues and myself, I thank members for the courtesy that they have shown and the mature way in which the debate has been conducted. If the committee needs further information about the project during the time that it was in my stewardship, I will be very happy—perhaps that is the wrong word, I should say "prepared"—to offer any help that I can, in the form of written or oral evidence as the committee wishes.
Meeting continued in private until 17:30.