2Key considerations
8.On the basis of the report of the Joint Committee on the Palace of Westminster, we took evidence from David Natzler, Accounting Officer, the Clerk of the House of Commons, responsible for the delivery of the programme, an external consultant and an external member of the Restoration and Renewal Programme Board. We also took evidence from the Chief Executive of the Infrastructure and Projects Authority, which provides expertise in the financing, delivery and assurance of major Government projects, and supports more effective management and delivery across government, together with the Chief Executive of Crossrail, who represented an example of a major project managed by an arm’s-length delivery authority.
Programme Options and Costs
9.One of our key concerns about the project related to cost assurance at this stage. Without adequate costing information, it would be difficult for Members to make informed decisions about the programme.
10.Between £50 million to £60 million each year is currently spent on the upkeep of the Palace of Westminster. An amount already considered to be insufficient to maintain a level of patch-and-mend repair where the building continues to fail.5 6 We recognise the cost effectiveness of investing now to save money for the taxpayer over the long-term.
11.The estimated costs for the programme are currently rising at a significant rate due to the delay in scheduling debates and votes on the floor of each House.7 The IOA states that the delays to the decision in principle may add between £60m and £85m per year, at today’s prices,8 to the capital cost in additional tender price inflation, based on current forecasts.9
12.The Joint Committee report states that “it is not possible to set a precise budget for the Programme at this stage”.10 As acknowledged by the Accounting Officer, the figures produced by the IOA provided only an “order of magnitude” at 2014 prices, and were only intended to allow for comparison of different options.11 There will be a need for detailed surveys and exploratory work of the often fragile and inaccessible nature of parts of the building before some estimates can be arrived at.12
Option One (rolling programme)
13.The Accounting Officer told us that Option One, without any kind of decant, was technically impossible.13 Replacing the mechanical and electrical services of the Palace was judged to be unachievable while both Houses remained on site.14 The Comptroller and Auditor General added that Option One led to an increased risk of a catastrophic event requiring a swift exit from part or all of the Palace, leading to uncontrollable costs.
Option Two (partial decant)
14.The Accounting Officer told us that there would be huge challenges in trying to replace a complete electrical infrastructure while also running half of the building,for example either on the old electrical system or a temporary replacement.15 The Palace is, so far as its services are concerned, one building.16 Whilst a partial decant would be possible, the Accounting Officer considered this to be high-cost and high-risk, given that it would require a footprint to be maintained within the Palace while dangerous construction work, including potential asbestos release went on across the site.17
Figure 1: The backlog of significant repairs is compounded by the presence of asbestos throughout the building (© UK Parliament)
Option Three (full decant)
15.In the view of the Accounting Officer, a full decant of the Palace of Westminster represented the best value for money, was the most technically feasible, offered the minimum disruption to business, the quickest protection against the risk of fire or other catastrophic events and would allow the removal of asbestos as safely and sensibly as possible.18 As quickest, with six years being the most likely duration, the scenario could also work out the cheapest to deliver in real terms.
16.The IOA and the report of the Joint Committee represent, in our judgement, the best available estimates of the costs and risks of the options examined. All those involved recognise a substantial degree of uncertainty in these costings, but to keep these options in play for a further period would, the evidence clearly demonstrates, increase costs, delay and additional work, some of which would be bound to be unnecessary.
17.This Committee is appointed by the House to be the guardians of efficiency, effectiveness and economy in the use of public money. It is crystal clear to us that further delay and indecision will inevitably result in costs to the public purse whichever option is finally settled on. It is also clear to us that the option of a full decant is the most economic choice. A full decant is the most efficient choice, allowing the work to be concluded in the shortest time with the minimum disruption to the work of both houses. It is the most effective choice, allowing not only the restoration of the Palace as a safe, sustainable and efficient building, but also permitting the most economical route to a building that will house a modern, open and accessible legislature.
18.Without hesitation we recommend that the House swiftly proceeds to a decision-in-principle and that the decision is to pursue a full decant from the Palace whilst it is restored, renewed and made ready for at least another 150 years as the home of Parliament.
The way forward
19.The Chief Executive of Crossrail told us that in two-tier delivery authority models, the sponsoring organisation (i.e. the client) makes the case for investment and secures the funding. The client then specifies what the outputs are the benefits are to be delivered.19 The delivery authority then needs to be empowered to work unencumbered by the complications of that sponsor organisation. The sponsors need to own the high level requirements, the funding model; and they must exercise the oversight to ensure the authority delivers, but without the temptation to micromanage and change to new specifications.20 We recommend the two-tier delivery authority approach. The Restoration and Renewal programme can build on the examples of Crossrail and the 2012 Olympics: both Government major projects delivered by a two-tier delivery model.
20.We consider that a successful sponsor body should have a clearly-defined relationship with the delivery authority, as it will be based on a high level of trust.21 We heard from Crossrail that it was useful for a sponsor body to have a project representative with complete access to the delivery authority’s information to provide embedded assurance.22 Based on the Crossrail model, that representative would have an absolute working knowledge of where the risks are and how they are being managed. We consider that this embedded assurance would enable the Parliamentary sponsor body to hold the delivery organisation to account during the programme.23
Programme Risks
21.We recognise that the choice to pursue a full decant option carries a degree of risk due to the already high level of dilapidation of the Palace and the high risk of unanticipated failure or incidents.24 The External Member of the Programme Board was clear that there are risks that would affect the costs of the work.25
22.Other risks of a full decant option include not being able to secure alternative accommodation for Houses, of the physical limitations of temporary accommodation having an unacceptable impact on parliamentary business and a lack of available skills to conduct the works.26
23.We fully support the conclusions of the Joint Committee that the feasibility of a full decant must be demonstrated clearly, and beyond reasonable doubt, with a comprehensive risk analysis before a final decision is made. We are clear that we need to watch the costs and spending very closely.
Accountability for the programme
24.The Cabinet Office reports that five out of eight common causes of failure in major projects like this come down to weak governance.27 It is essential that throughout the programme its delivery is subject to independent assurance and evaluation at appropriate stages. The Accounting Officer told us that the sponsor body and the delivery authority would be responsible for ensuring audit and external assurance within the programme, alongside the creation of an audit committee.28 It is important that the National Audit Office is also empowered to audit the delivery authority and carry out value for money studies.29
Communicating benefits to the public
25.The Accounting Officer told us that commissioned polls showed that the wider general public were generally supportive of the broad principles of the programme.30 The Palace of Westminster is not only an internationally recognised historic UNESCO World Heritage site and one of the most iconic buildings in the world. It is a building which belongs to the people and the nation and a symbol of our democracy.31 One million people visit the Palace each year, including 100,000 school children.32 The Restoration and Renewal programme would provide an opportunity to create better access and allow greater public engagement with the work of both Houses.33
26.Ultimately, as a UNESCO World Heritage Site, it is HM Treasury which is responsible for the site. According to Historic England, protection of a World Heritage Site is the responsibility of national governments.34 The UK government, as a signatory to the World Heritage Convention, has committed to identify, protect and conserve UK World Heritage sites for future generations. UK government policy is to prepare a World Heritage site management plan for each site to ensure it is managed in a sustainable way. These plans are reviewed regularly.35 Designation of a World Heritage Site by UNESCO brings no additional statutory controls but protection is afforded through the planning system as well as through other designations such as listed building status. The Palace of Westminster has been a Grade I listed building since 1970.
27.Local government policies and strategies, in this case, the City of Westminster and the Greater London Authority, also provide for protecting and conserving World Heritage properties.36 There is guidance on managing views to protect perspectives from Parliament Square towards the Palace of Westminster
28.It is vital that both the sponsor body and the delivery authority engage in effective public engagement, underpinned by a good communications plan with a strong narrative.37 We would stress to the project team that a strong communications plan is vital as the programme progresses, to actively communicate the benefits of the project to all stakeholders, including MPs, Peers, staff and the wider public. It is, at its heart, a project that belongs to all of us in this country, not just to Parliament.
6 Joint Committee on the Palace of Westminster Restoration and Renewal of the Palace of Westminster, September 2016, p. 5
8 At P50, which means that there is a 50% chance of it being delivered at that point—so there is a 50% chance that it could be more expensive or it could be less than that. P90 means that there is a 90% chance of delivery at or at about that price and a small chance that it would be more than that.
9 Deloitte LLP, Palace of Westminster Restoration and Renewal Programme Independent Options Appraisal, September 2014, Vol 1, p. 24
10 Joint Committee on the Palace of Westminster Restoration and Renewal of the Palace of Westminster, September 2016, p. 40
26 Joint Committee on the Palace of Westminster Restoration and Renewal of the Palace of Westminster (September 2016) p. 46, 49
31 Joint Committee on the Palace of Westminster, Restoration and Renewal of the Palace of Westminster, September 2016, p. 6
32 Joint Committee on the Palace of Westminster, Restoration and Renewal of the Palace of Westminster, September 2016, p. 72; Q30
34 Historic England, Heritage Protection Guide: World Heritage Sites, accessed 2017
35 Historic England, The Protection and Management of World Heritage Sites in England, June 2015
36 Westminster City Council, World Heritage Site, 23 June 2016; Mayor of London/ Greater London Assembly, London World Heritage Sites, 2017
8 March 2017