Letter from Rt Hon Steve Barclay MP, Chief Secretary to the Treasury, to Rt Hon Dame Eleanor Laing MP, Chair of the Estimates Commission, 23 March 2021
1.Thank you for your letter of 8 March regarding the Main Estimate for the Parliamentary Works Sponsor Body (‘the Sponsor Body’) for 2021–22. As noted in your letter, Schedule 4 to the Parliamentary Buildings (Restoration and Renewal) Act 2019 requires the Parliamentary Works Estimate Commission to consult the Treasury regarding the annual estimates for the Sponsor Body, and to have regard to any advice provided by the Treasury. I am grateful to the Sponsor Body for providing a copy of the Estimate in draft to Treasury officials to support this advice, and would welcome further engagement between the Sponsor Body and the Treasury in the future as spending and delivery plans for the programme continue to develop.
2.The Palace of Westminster forms an iconic part of our national heritage. Preserving and protecting that heritage for future generations is of vital importance. But doing so in a way that delivers value for money is also crucial, and all the more so in the current fiscal and economic context. As outlined by the Chancellor in the Budget on 3 March, public sector net borrowing in 2020–21 is forecast to be 17% of GDP (£355 billion), a peacetime record, as a result of the impact of the Covid-19 pandemic on the economy and the decisions taken by the government to protect jobs and livelihoods. Next year, borrowing is forecast to be 10.3% of GDP (£234 billion). While decisions over the direction and funding of the Restoration and Renewal programme are for Parliament rather than government, I hope that the Commission will consider this backdrop both in assessing this Estimate and future Estimates presented by the Sponsor Body.
3.The Estimate presented by the Sponsor Body for 2021–22 seeks funding of £155.6 million. This funding would support the development of an Outline Business Case (OBC) for the Houses’ approval, including detailed feasibility surveys and exploratory works, during ‘Phase 1’ of the Restoration and Renewal programme. I understand that the Infrastructure and Projects Authority considers this budget to be broadly in line with the costs of preparatory works for other major projects and programmes as a proportion of total capital costs. The funding sought for 2021–22 has also reduced following consideration by the House of Commons Commission on February 22nd and the measures subsequently taken by the Sponsor Body to reduce costs in Phase 1, for example via a reduction in the number of scheme options developed through the OBC.
4.I welcome the scrutiny that both the Sponsor Body itself and the Commissions have applied on how we can increase the programme’s efficiency while still achieving the ultimate objective of the restoration of Parliament. As OBC development continues, I would encourage the Sponsor Body to think more radically and innovatively about how changes in ways of working in response to Covid-19, and the experience of virtual and hybrid working in Parliament in particular, could continue to play a role in delivery plans for the restoration works. I would also encourage the Sponsor Body to learn from best practice and changes in major projects guidance being pursued across government, including through Project Speed and the revised HM Treasury Green Book guidance.
5.I would be grateful if this letter could be made available to the members of the Commission as part of their review of the Main Estimate for the coming financial year.