| Previous Section | Index | Home Page |
9 Mar 2005 : Column 509WH—continued
9 Mar 2005 : Column 510WH
Cost-effective Buildings
4.15 pm
Dan Norris (Wansdyke) (Lab): The title of this debate will be a mystery to many of those people who do not live in or near my constituency; however, the debate has come about is because of the bitter experience of council tax payers in the north-east Somerset part of my constituency. It has been a sad and sorry tale. I am referring to the Bath spa project, a new, modern and exciting development that has tragically gone wrong. It is at least three years overdue and at least three times over budget, costing about £35 million when it should have cost £13 million. About £5 million of additional costs will take the project up to £40 million, and there is still no opening date.
Although I know that the Minister is well briefed about the matter, perhaps I can explain to him a little bit about the history of the project. It was announced in 1997 that the Millennium Commission had agreed to pay about £7 million towards the project. Latterly it gave about an extra £1 million, giving it a total of about £8 million. It was announced also that the local council, Bath and North East Somerset council, would contribute about £3 million, and that a private operator would make an additional contribution of about £2 million to make a project total of about £13 million.
Through no one's fault, the project got off to a bad start. Excavations at the site were protracted. Bath has historical importance, and it is important to ensure that when new buildings are constructed, one knows what historical damage one is doing. That was a necessary delay and was compounded by nature, as mallards were nesting on the site and had to be left there before construction work could start.
The start was hopeful, but sadly progress was slow. In 2000 a key decision was made about the financing of the project. It is often referred to as the time when councillors signed a blank cheque and effectively underwrote whatever costs might accrue on the project, simply because they had had little success in securing other funding. That is regrettable and should have rung the alarm bell that they were likely to get into deep water. If private initiative examines a project and realises it cannot make money, that should be a clear indication to a local authority, whose job it is to provide cost-effective local services rather than dabble in the market and risk council tax payers' money.
With the benefit of hindsight, 2000 was a bad year. There was a hung council, and all the Liberal Democrat councillors, except those with a pecuniary interest, supported the project, and about half the Labour councillors supported the underwriting of the project. About half the Tory councillors supported the project, although that is denied by Conservative councillors. However, Councillors Bailey, Dewey, Hawkins, Kew and Organ are on record as having voted for the project, so perhaps they can write to tell me if they disagree.
The year 2001 was another bad one, with very little progress. It was significant because it was the year in which the Bath spa project was intended to open. The opening date came and went, and it turned out to be the first of six opening dates that have not been achieved. The council so lacks confidence that it is not prepared to say whether the project will open this year.
9 Mar 2005 : Column 511WH
Then came 2003, which turned out to be yet another bad year. The three tenors gave a terrific concert, which was very well received by local people but, sadly, it was not possible for them to open the spa as planned. The four pools were filled with water, so everything looked fine from the outside when the media were allowed in to see the three tenors walking around the premises. However, most of that water came not from the thermal springs that make Bath famous but from the mains supply, because there was difficulty in obtaining sufficient water. Questions have been raised about the contamination of some of the spa's sources, but it is hoped that those can be resolved.
Then, significantly, peeling paint was spotted in the pools. At that time, it was expected that it would cost some £500,000 to correct. That might have been a subtle issue in the general scale of things, but council tax payers started to become very angry when they realised that, in order for them to enjoy the wonderful spectacle of the three tenors at the Bath spa project, cobblestones had been laid to make the area look attractive on the outside, although it was known that, only weeks later, they would have to be dug up at the cost of many tens of thousands of pounds. There is dubious benefit from the project to my constituents, who live in the part of Bath and north-east Somerset that is outside the city—in fact, many of them live closer to Bristol than to Bath—so the requirement on them to contribute to the project via their council tax had never been received with great joy. When they saw expenditure such as that on the cobblestones, they questioned the wisdom of the project, and asked whether there was sufficient skill and talent to manage it. It was being overseen by the council.
Then we arrived in 2004. That was a truly appalling year, a year that my constituents are unlikely to forget when it comes to the saga of the Bath spa. It turned out that a special paint was required for the pools and a special surface was also needed, so the previous estimate of £500,000 was incorrect. It was estimated that that would cost between £3.4 million and £4.3 million. That is a huge sum of money for paint for four small pools. In addition, it was decided that because the surface had to be scraped away and blasted off back to the concrete for the new surface to be applied, the original concrete steps were no longer adequate and what was needed to allow people to enter and exit the pools were stainless steel steps costing £500,000. In addition, the council announced that it had overlooked £300,000 in architect fees. The public were, understandably, very concerned. In fact, they were mystified.
Can the Minister shed any light on the saga of the huge cost of the paint? How was it not foreseen at the start of the project that such expensive paint would be needed? Why was the cost not factored in at the outset? The total that is to be spent on painting four small pools is something like the cost of a small primary school; we know how much more wanted and valued a school would be. The figure defied the belief of my constituents.
Now we are in 2005, and that started badly. The per-head cost, that is the extra cost over and above the original amount for every man, woman and child in the district, including people in my constituency and that of the hon. Member for Bath (Mr. Foster), turned out to be £116. To put that into context, it is nearly seven times the £17 per head that the millennium dome cost
9 Mar 2005 : Column 512WH
every man, woman and child. It is a stupendous figure, and one that has sent shock waves around my constituency and elsewhere in the area. The project is infamous not just among my constituents but across south-west England and beyond. Indeed, I have read reports from America about the farcical circumstances that surround it. The total cost has escalated from £13 million to about £40 million with hidden costs, and I suspect that it will be higher by the time the project is completed.
I should tell my hon. Friend the Minister that his intervention last month, when he visited the spa, was very timely and much appreciated. So far, I have not mentioned the fact that the project has been cloaked in tremendous secrecy. As soon as things started to go wrong in 2003 and 2004, media access to the project and to information about it was conspicuous by its absence, as was co-operation with representatives of the media who wanted to go inside and see what all that council tax payers' money was being spent on. That is why the Minister's visit was so valuable. He was able to call the bluff of the various parties. The construction company, Mowlem, said that it was happy for the media to attend, and claimed that Bath and North East Somerset council was causing the difficulty in terms of access. The council said the exact opposite—that it was happy for the media to attend, but the construction company had failed to let them in. A Shakespearian situation was set up. The Minister, having obtained unconditional access and agreement from Mowlem that he could attend and bring with him whomever he wanted, invited, through me, all the media.
Mr. Don Foster (Bath) (LD): Will the hon. Gentleman give way?
Dan Norris : I shall not give way now, but might do so if the hon. Gentleman tries again slightly later.
There was disagreement about who was responsible for the access—or the lack of it—by the media. I have here a letter from BANES' lawyers, Veale Wasbrough, dated 24 January 2005, writing to the solicitors who represent the construction company Mowlem; effectively, it is a letter from the council to the construction company. I shall not read it all, but the key paragraph says:
"No statement or comment must be made to the press or in public with regard to the Project Works without the prior written consent of the Council."
I shall leave it for them to carry on arguing, but I know who my money is on as the cause of the difficulty about access.
The Minister came, the bluff was called and the media were allowed in. That was important and made a difference; huge public pressure developed as a consequence of people's knowing about the huge delays, and about the fact that all that money had been spent on the project, yet years on it was still a building site. Within about three days—on the Thursday following the Monday of the visit—the council and the construction company were having face-to-face meetings lasting for hours, whereas in the previous 12 months they had had hardly any face-to-face meetings at all. That was very helpful, and I thank the Minister for his important intervention. Without it, we
9 Mar 2005 : Column 513WH
would still be sitting there without media access and, I suspect, without discussion of the offer made by the construction company to complete the project in six months.
Mr. Foster : Will the hon. Gentleman give way?
Dan Norris : I want to push on. I shall give way to the hon. Gentleman if I can.
I must thank the Minister also for his frankness in discussing the competence of the council. The story is rather like that of the emperor's new clothes. The Minister came, saw and stated what everyone in my area really knew; the council had been incompetent in its handling of the project. That was confirmed, if confirmation were needed, by a television poll on BBC's "Points West" regional news programme on the evening of the Minister's visit. More than 1,200 telephone calls were received in about 20 minutes. Bath and North East Somerset council was backed by 11 per cent. of those who rang in—people who thought that the project had been handled in the right way—and 55 per cent. of callers wanted the construction company's offer to finish the project within six months to be accepted. However, amazingly, 33 per cent. were so fed up with the incompetence of BANES that they wanted the project to be abandoned, and no more money to be wasted on it. They had lost faith that it would ever be completed.
The whole affair has been a case study in how not to manage a building project and how to alienate council tax payers. Some years ago, would you believe, a council employee admitted on ITV West that the project was a loss leader. That was later denied, but was none the less said on camera. When I was in a live interview with the council leader on national breakfast TV, he just lost his temper; clearly he is not used to being criticised or asked questions about the project. I suggest strongly that he surround himself with people who do not just say yes all the time.
A year ago, I believe that the Minister set up a confidential meeting between the three parties; the council, the construction company and the architects. Unfortunately, that confidential meeting was undermined by the fact that it was leaked to the media by councillors from Bath and North East Somerset council. That was terribly unhelpful. Litigation has been rife in this matter; all the parties have been sending legal letters left, right and centre. As I understand it, only last year that council had to pay legal bills of £500,000. There is a lot more of that to come, I am sad to say.
In many respects, the council has been irresponsible in how it has dealt with the project. It produced a brochure that described what it was like to be in the spa, as if the spa had been open, and left us all with egg on our faces when people arrived from the USA, for example, only to find that it was not open. Motorway signs near the project still point to the spa, even though it has not been completed.
Mr. Bill Olner (in the Chair): Order. I remind the hon. Gentleman that this is a time-limited debate of only half an hour. I am sure that he wants the Minister to be given sufficient time to respond.
9 Mar 2005 : Column 514WH
Dan Norris : Thank you, Mr. Olner; I shall respect that.
I say in conclusion that modern methods of construction should mean cost-effective buildings for council tax payers; buildings that bring pride, not ridicule. The problem with incompetent councils is that they are often way out of their depth and cannot deal with such things. I hope that Bath and North East Somerset council will stick to basics in future. The Millennium Commission needs to think about how and when it gives such large sums of money to organisations that are not up to scratch when it comes to fulfilling their commitments. The district auditor needs to be clear about how council tax payers can best be guaranteed to get value for money. The whole Bath spa fiasco has brought humiliation and damage to our area; it is like a "Carry On" film, but I am afraid that no one in my constituency is laughing.
4.32 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths) : I congratulate my hon. Friend the Member for Wansdyke (Dan Norris) on securing this debate on behalf of his constituents; the council tax payers, every man, woman and child of whom, I understand, is paying an estimated £116 for this absolute fiasco.
I should like to praise my hon. Friend. At times during the nine years of this fiasco, it must have seemed to him that he was a lone voice, speaking up and stating quite proper concerns on behalf of council tax payers. I am pleased that the vast majority of people in his and neighbouring constituencies now endorse what he is doing.
As the Minister with responsibility for construction, I like to get out of the Department of Trade and Industry once a week, if I can, and visit manufacturers, business groups and construction projects. Construction makes a great contribution to the UK economy. It is worth more than £225 billion a year, more than 8 per cent. of our GDP, and employs more than 2 million people in many of our leading companies and small businesses.
British architects are hailed around the world for their bold and gracious designs. British construction companies work in more than 100 countries. I have seen the work of Sir Nicholas Grimshaw, the architect of the Bath spa, on the fabulous Eden project; he is an architect of world renown. The contractor, Mowlem, also has an international reputation, with vast experience of bringing in projects on time and on budget. Both Sir Nicholas and Mowlem work with clients who are highly professional and highly competent, and who adopt modern methods of construction, consult our construction flagship body Constructing Excellence, examine the benefits of build off-site and look at best practice wherever that is found in the world. Such clients have achieved higher quality and better standards than ever before. They have reduced waste, cut deaths and are, I hope, achieving the target that I am setting of zero tolerance for any deaths in this great sector.
The best clients attain such a record. Sadly, neither Sir Nicholas nor Mowlem have found such a client in Bath and North West Somerset council—not at the inception of this ill-fated project, nor at the humiliating
9 Mar 2005 : Column 515WH
appearance of the three tenors at the so-called opening in 2003, nor at the building site that is the Bath spa, which I visited a month ago.
My hon. Friend the Member for Wansdyke would not have called this debate if it were not that, as far as his constituents are concerned, there is no opening date, nor end in sight for this project. In any traditional JCT contract, the construction costs represent about 85 per cent. of the project and the consultants on-costs about 15 per cent. In the Bath spa project, the client— the council—forced down the construction costs to £11 million, less than 50 per cent. of the consultant's on-costs. To achieve that, it insisted on reducing the quality of certain items. The most staggering example was a £200,000 reduction in spending on paint. There is a highly specialised type of paint that makes baths watertight. The paint—Kartoxon paint—is used by pool contractors all over Europe. It was deemed too expensive and was substituted by a concrete that was merely painted with a cosmetic paint, in spite, I understand, of there being no track record of similar usage on any similar project anywhere else.
Half a decade later, when everyone accepts that Kartoxon is the solution to the Bath spa problem, the cost of rectifying that false economy of £200,000 has risen to more than £4 million. If that were the only failing of the client, Bath and North West Somerset council, it would be put down to inexperience or incompetence; costly, but no more than that. Sadly, it appears to have been only the tip of an iceberg of incompetence.
A year ago, aware that the Government have very limited powers to intervene in such cases, I contacted, in confidence, the three main parties involved. I invited the chief executive of Bath and North West Somerset council, Sir Nicholas Grimshaw from Grimshaw's and Sir John Gains from Mowlem to meet me in the Department of Trade and Industry, away from any blaze of publicity, to discuss my solution to their seemingly intractable problem. It was a simple proposal; that the client—the council—should instruct that the work be completed, and that the other two parties should agree to abide by any arbitration or court finding.
I was operating, in strict confidence, on the principle that the work that had stalled and been delayed for years should proceed, and that no party sitting around that table should undertake any face-saving in public. Although I secured the agreement of all parties that the meeting would be kept confidential to ensure that no one faced any accusations of backing down, the chief executive of the council told his leader, councillor Paul Crossley, about it, and he told a local newspaper. In effect, that sabotaged my attempts to resolve the issue, even before we were able to sit around the table. Sadly, I am told that there is a pattern of those councillors shooting their mouths off in public and jeopardising progress at almost every stage of the project, while costs have shot through the roof.
We have a deadlock with the council, but there is also a problem of facing facts. I am pleased to say that my visit resulted in a round-table meeting with Mowlem in the same week. During that meeting, the company followed up on an offer that it had already put in draft and in writing to the council. I hoped sincerely that progress would be made. However, the council is
9 Mar 2005 : Column 516WH
delusional. At the time that the council chief executive was writing to me that access to the media was entirely a matter for Mowlem and that the contractor, not the council, was blocking access, the council was sending—not in confidence—the letter from its solicitors to Mowlem that my hon. Friend passed me at the beginning of the debate, stating almost precisely the opposite. The letter censures Mowlem for briefing the press on a number of occasions.
As Mowlem made clear to me, in, I think, the presence of all those present on the day of my visit, it was happy for the media to visit the spa. It is now clear to me that the council were not happy about that. The reasons are also clear; we are nine years into the project, £14 million, £15 million or £16 million has been spent and the bill is estimated by the council at in excess of £20 million, with estimates rising to £35 million. I have seen the figure put at £39.5 million, and I would be surprised if it stopped there. From those escalating figures, it is clear that the council has little or no intention of coming clean with the public on its handling of the case.
Mr. Foster : I genuinely believe that the Minister has misunderstood, or been misinformed on, a number of points. I draw attention to the fact that he has got the name of the council wrong. It is Bath and North East—not north west—Somerset council. He keeps referring to his visit as "the visit of the Construction Minister". Will he confirm the letter from his private secretary that I have seen, which says that, when he came to Bath in February, he did not come as the Construction Minister but in a private capacity?
Nigel Griffiths : I am the Construction Minister and I am addressing the debate as such. In checking the record, I am surprised that the hon. Gentleman has not sought an Adjournment debate on the issue. I am surprised that the excellent briefing I received from my civil servants shows that he has not sought an Adjournment debate before. To their knowledge, he has not asked any Department to help the council in trying to resolve the mess. We have a lot of expertise in the area. The sad fact that I conclude is that the most incompetent council in the country also has the weakest Member of Parliament. The problem is a council that is indecisive and a Member of Parliament who, because that council is run by his Liberal Democrat colleagues, will not stand up against them. We see many Members of Parliament having to do that in tough local situations in which we know that a council of the same political party is getting things wrong.
Nigel Griffiths : I am happy to give way to the hon. Gentleman, because what we and the people of Bath want is an apology from him for the Liberal Democrats' handling of the matter.
Mr. Foster : The Minister is making the debate personal. I know that my time to intervene on him is brief, but I point out yet again that he has got so many of his facts wrong. He ought, at least, to know that, as his hon. Friend the hon. Member for Wansdyke pointed
9 Mar 2005 : Column 517WH
out, Bath and North-East Somerset council is a balanced council and is not run by the Liberal Democrats.
Nigel Griffiths : I am afraid that the defence of, "It's not me, guv" is not good enough. It is not an excuse that my constituents would accept. I am sure that the hon. Gentleman's constituents would not accept it either. I have given him the chance to join us in criticising, if not condemning, the shambolic handling of the affair by his Liberal Democrat colleagues. I have thick piles of press cuttings. In them, I see not one word of criticism directed at his council colleagues on the issue. In the meantime, of course, the costs are escalating horrendously.
I understand that the council has in front of it a possible solution to the issue. The hon. Gentleman has written to me saying that he does not accept that that is
9 Mar 2005 : Column 518WH
a solution. The possible solution is a design-and-build completion to the project that would cap the spending at £26 million. I was hoping that the hon. Gentleman might, in his intervention, give me a progress report about the months since I went to Bath on exactly how far they are down the road in agreeing that settlement. The important thing is, of course, that a settlement must not prejudice what the people of Bath get at the end of the day. At the moment, that is, as far as I can see, the only solution on the table.
Nigel Griffiths : I am happy to give way to the hon. Gentleman if he will endorse that solution.
| Index | Home Page |