7.1 Concern about accommodation was the starting point of the Ibbs Review and the main catalyst for change.
7.2 Criticism focused on four areas: delays in carrying out minor repairs; poor planning of more substantial work, and delays in its execution; a backlog of major maintenance and improvement; and the quality of planning and management of major new building work (principally on the Bridge Street site).
7.3 It was expected that some £220 million (in cash terms at the time) would be needed over the next ten to fifteen years to bring the estate and its facilities up to a reasonable standard for the next century. This included Bridge Street Phase 2 (now Portcullis House); modernisation; major maintenance projects as yet unprogrammed; and minor repairs. But accommodation and works was in the hands of the Department of the Environment, and the expenditure was borne on the DoE Vote.
7.4 Ibbs took the bull by the horns. He took the view that the Houses requirements had become increasingly specialised, and that it was within the House itself that spending priorities should be determined. Changes within the DoE in preparation for the privatisation of the Property Services Agency meant that the existing arrangements would have to be reconsidered. He recommended that the House should take control of works expenditure as a distinct Vote. He recognised that the difficulties of the site and surroundings meant that this would not be a panacea; but he judged that the exercise of control, and the setting of priorities, would lessen discontent and frustration. A key proviso was that such a change should not take place until an effective system of cost control under a Finance Director was in place, together with clear leadership on financial management issues from the Commission; and until a Director of Works was established in post.
7.5 The Director of Works was to be the Houses professional adviser on all works and accommodation matters, preparing a programme of works for the Commissions approval, and then managing it. As with the Director of Finance and Administration, this appointment should be made from outside the House, probably for a fixed term. Ibbs thought that the appropriate place for this post would be within the Department of the Serjeant at Arms, in view of the Serjeants existing role in relation to works. The Director would be supported by a few highly competent technical and administrative staff, including finance and contract management experts.
7.6 Under the new arrangements, the House would become the client; the exact nature of the supply function (whether inHouse, temporarily with DoE/PSA, or entirely from the private sector) was left for further examination.
7.7 The Ibbs recommendations were accepted in full; a Director of Works was appointed in July 1991, and each House took over responsibility for works from the Department of the Environment on 1 April 1992, establishing Works Services Votes.
7.8 The organisation took on some 15 technical and administrative staff to provide inhouse the functions performed by the DoEs central organisation. These included the finance and contracts expertise envisaged by Ibbs, supervision of major redevelopment works, estate and fire safety management, and conservation and curatorial services.
7.9 The PWD became the expert client for the two Houses, and the supplier function has been divided between commercial contractors and directly employed staff. Since DoE staff were transferred to the Houses in 1991, PWD has managed down directly employed staff to achieve better value for money.
7.10 Expenditure priorities are set within a 10year rolling programme of work which is prepared by the Director of Works and agreed with the Serjeant at Arms and the Director of Finance and Administration. The programme is then put before the Accommodation and Works Committee, submitted to the Finance and Services Committee and then to the Commission for approval. Financial provision is made as part of the wider PES/Estimates exercise. For much of the time since the creation of the Works Services Vote, and particularly during the last Parliament, the Accommodation and Works Committee has attempted to operate in the executive mode which Ibbs tried to avoid (the only formal delegation from the Commission was in respect of daytoday Portcullis House design matters). It is difficult to assess the effect on the planning process or the establishment of priorities, but it has not helped to achieve the clarity which Ibbs sought.
7.11 Parliamentary Works is a major area of expenditure. In 199899 (figures subject to audit) it accounted for £92.0 million (including £54.9 million on Portcullis House) out of total expenditure (all three Votes) of £259.4 million. In addition, £13.5 million was spent on behalf of the House of Lords.
7.12 The DoEs 1990 estimate was that £220 million over 10 to 15 years would be needed to bring the Parliamentary Estate up to a reasonable standard for the next century
on the basis of the known state of the fabric and the declared needs of the House. Further expenditure is forecast of about £285 million by April 2007. We understand that the neglect work is now about half completed. We realise that requirements change over time, but we believe that it is important that the Commission and the Board of Management should be able to monitor further progress. This is especially necessary because some remaining neglect work is substantial and will have significant expenditure planning implications. We therefore recommend that expenditure on this type of work be identified and reported to the Commission and the Board at intervals to be determined by them.
7.13 In the period since the Ibbs Report, the House has acquired significant additional accommodation (1 Parliament Street, converted under the previous arrangements and opened in April 1991, and 7 Millbank). Much of the Parliamentary estate has been provided with network cabling; repairs and improvements have been undertaken at the same time. Portcullis House, the major new Parliamentary building, is on schedule for completion and handover.
7.14 It is clear from the JLA survey that accommodation, the trigger for the Ibbs review, is no longer the source of dissatisfaction that it was. In 1990 31% of Members described the House as a very or fairly good place to work. That has now risen to a substantial majority: 70% in 1999. The figure for the 1997 intake was 64%, compared with 14% of those with 3 years service or less in 1990. Janet Levin Associates describe the overall change as a remarkably strong increase in satisfaction.
7.15 Members views about the House a place of work for their staff are less positive at 52%; but this figure has increased almost twice as steeply as the figure for Members alone; in 1990 it stood at 13%.
7.16 There is still some dissatisfaction, related to location of office. 67% of those giving poor ratings had an office in the Palace, for example. In any event, the addition of Portcullis House to the Parliamentary Estate will be a further major improvement. It is probably also true to say that no realistic level of provision will extinguish dissatisfaction entirely, so 100% approval is not a realistic target.
7.17 Progress since 1990 reflects not only the success of the radical Ibbs recommendations, but also the achievement of all those who have delivered the improvements.
7.18 The Portcullis House project has not formed part of our inquiry; the large majority of expenditure is already committed, and the project has been the subject of increasing scrutiny. We have had access to reports to the Project Advisory Board and Internal Audit reports, but the report of the Northcroft midterm review was not available before the end of our inquiry. Our concern has been with the works function in the longer term. Here we see two key issues:
works priorities and
value for money.
7.19 Over the period since the Ibbs Report, the main driver for the works programme has been addressing the years of neglect described by Ibbs; and this has provided much of the agenda. With the completion of Portcullis House in closer prospect, it is difficult to see what the drivers for non-maintenance and non-neglect expenditure will be. The 10-year rolling programme implies a strategic view, but without firm direction, there is always a tendency for such programmes to become accretions of wishes and suggestions. There is then a danger that the programme becomes self-fulfilling.
7.20 Accommodation as a resource will assume a new status with the introduction of resource accounting and budgeting. It should become more closely integrated into the planning process, with an increased emphasis on meeting operational requirements. The cost of accommodation, and the competing priorities on the Parliamentary estate, will become factors in future decisions on outsourcing and outhousing.
7.21 The current arrangements for scrutiny and approval of the 10-year rolling programme are not satisfactory. The programme prepared by the Director of Works is agreed by the Serjeant and DoFA and then goes to the Commission
via the Accommodation and Works Committee and F&S. The Board of Management is not formally involved, although the Board must make provision for works in the Estimates proposals it puts to F&S and the Commission.
7.22 The works programme should be an integral part of plans for the provision of services. It should be submitted to the Board of Management. They will wish to take the view of the Accommodation and Works Committee, and to be aware of any preferences which that Committee may have. However, following the Ibbs prescription, the Committees role should be advisory; it should not be a stage in formal approval.
7.23 When the draft programme has been finalised by the Board, it will be forwarded, as now, to F&S and then to the Commission.
7.24 It will be important that the phasing of the works programme process does not make the necessary Estimates provision a foregone conclusion. There will need to be enough lead time to allow full consideration by the Board and by the Accommodation and Works Committee, and for any reworking or preparation of options that the Board may request. The Board will also need to establish priorities for the Director in his preparation of the following years programme. We would expect these to be put to F&S and the Commission as part of a strategic planning process. Some works expenditure will also be subject to the capital expenditure review which we recommend in paragraph 15.60.
7.25 Value for money has received increasing emphasis. The term appointment of the Deputy Director of Works (Contracts and Procurement) is intended to give added momentum to the search for better value and the reduction of costs. His work is still in progress, but preliminary indications suggest that new approaches to the planning and phasing of work, the use of longterm partnering with contractors on projects, and more effective use of IT to do business, might offer opportunities for improvement.
7.26 The Ibbs prescription, largely followed, was that the PWD should be the expert client, with the supply function being performed largely outside the House. It is important to ensure that the functions of client and supplier do not become blurred, and we think that there is now a case for looking afresh at this relationship. There might, for example, be merit in distinguishing more sharply between estate management and formulating the Houses requirements, and the process of fulfilling those requirements. If under such an arrangement the House could become a tougher commercial customer, this would be a course worth investigating.
7.27 These important issues raise technical questions of a complexity which cannot be addressed in our study. We think that the right course is for a separate review to be undertaken of the role and structure of the Parliamentary Works Directorate, drawing on the work that is already under way. There may be knockon effects. The relationship of the PWD with other operations of the Serjeants Department will be important, and the reviews terms of reference should be wide enough to encompass these other activities. It should also take into account our recommendations on information technology. Close consultation with the authorities of the House of Lords will be necessary.
7.28 The review need not be lengthy, but it will need to be set in hand quickly so that its recommendations can be taken forward in the context of the other changes we recommend.