Parliamentary Works Estimates Commission
Oral evidence: Parliamentary Works Grant Main Estimate 2023-24
Tuesday 9 May 2023
Ordered by the House of Commons to be published on 9 May 2023.
Members present: Dame Eleanor Laing (Chair); Lord Gardiner of Kimble; Mrs Sharon Hodgson; Lord Macpherson of Earl’s Court.
Questions 1-26
Witnesses
I: Sir John Benger, Clerk of the House of Commons; Simon Burton, Clerk of the Parliaments; Dr Patsy Richards, Interim Managing Director, Restoration and Renewal Client Team; David Goldstone, Chief Executive, Delivery Authority.
Witnesses: Sir John Benger, Simon Burton, Dr Patsy Richards and David Goldstone.
Q1 Chair: Welcome to today’s meeting of the Parliamentary Works Estimates Commission. We are here today to consider the parliamentary works grant main estimate for 2023-24. We are delighted to welcome our four witnesses for this afternoon’s public session. Ladies and gentlemen, could I ask you to begin by introducing yourselves for the record?
David Goldstone: I am David Goldstone. I am the chief executive of the R&R Delivery Authority.
Sir John Benger: I am John Benger. I am the Clerk of the House and a member of the R&R Client Board and Programme Board.
Dr Richards: I am Patsy Richards, and I am the interim managing director of the Client Team.
Simon Burton: I am Simon Burton. I am Clerk of the Parliaments in the House of Lords, a job that brings with it corporate officer and accounting officer, which are very relevant to today. Like John, I am also a member of the Programme Board and the client body.
Q2 Chair: Thank you very much indeed. We have been recalling the discussion that we had a year ago. We appreciate that a lot has happened in the last year—that is a bit of an understatement—and that there have been significant political changes, but it is our duty to consider the figures involved and to consider what we last discussed with you and the answers that you gave at that point to our questions.
Dr Richards, are you currently on track to complete shortlisting by July, and for approval of the strategic case by both Houses by December?
Dr Richards: Thank you, Chair. Yes, we are, but those milestones are at risk—they are amber in our latest highlights report. We are working well with the Programme Board, which has a lot of material in front of it to help it down-select, or shortlist, those options. The plan is still to take that to the Client Board before the summer recess. A lot will depend on how the Client Board reacts—we are going there more than once before the summer recess—but if we can find consensus, we are still aiming to take proposals to the Floor of each House by the end of 2023. We are very much pushing that ambitious aim. We call it the phase 1 plan, and we are very much still on track for it. We know it is challenging, but we are still aiming for it.
Q3 Chair: That is good news. The reason I started by asking you that question is that, this time last year, after our exchanges in a similar meeting to this, we were required to publish—well, part publish—what is called our comments. Those comments included a note of the Treasury’s advice to us. We will come more specifically to that later. We said this time last year in paragraph 6 of our comments: “Whilst we are content that the funding requested is appropriate at this juncture, it is clear that prolonged uncertainty will inevitably result in nugatory spend and, potentially, constructive losses. We therefore have serious reservations that in the absence of formal and definite political decisions on the Programme’s future being taken soon, value for money may be put at risk…We may not be in a position to conclude that subsequent estimates reflect value for the taxpayer.”
That is where we are now. Here we are, a year on, and we may not be in a position to conclude that subsequent estimates—we note that this year’s estimate is greater than last year’s—reflect value for the taxpayer. Of course, we appreciate that there are political decisions to be taken, and that they are not taken by you. You have had a change of regime; we have had a change of decision makers, and therefore decisions. Nevertheless, the extent to which a lack of political decision making is hampering what you can do concerns us very greatly.
Dr Richards: One of the many political changes over the last year that you refer to is that we have brought my team in house, so we are no longer at arm’s length, although the Delivery Authority remains at arm’s length. We now have political decision-taking structures in place. We have the Client Board, as you know—the two Commissions meeting together—and the Programme Board below that, which is the Client Board’s directly nominated representatives. We now have very well governed structures.
The deliberations and decisions are minuted. We publish the minutes of those meetings on our website in Cabinet Office form. We are now taking those decisions in a much more transparent, open and recorded way. That is what the Commissions asked us to do by creating those new governance structures. Of course, we can’t guarantee decisions, but we have created the right conditions for good decisions, and we have put a lot of evidence and information in front of the Programme Board. It has been very complimentary about the work that our teams have done, so I would like to say thank you to the teams. There is a huge amount of information there and possible permutations of what we can do, and all the evidence is behind it. We are trying to give the politicians—our colleagues—the very best chance when taking those decisions.
Chair: Thank you very much.
David Goldstone: I was reflecting, Chair, that if there were losses or nugatory expenditure, as you described, I, as accounting officer for the Delivery Authority, would have to report that and be accountable for it. The reference that you read from last year’s comments reflects the fact that if we had had delay since this time last year, that risk would have arisen. I think we can say that, looking back to what we expected 12 months ago, as Patsy said, everything that was planned to happen has happened almost exactly as planned, and to the time planned. We were aiming to be at the point we are at now.
The Programme Board is engaged on the shortlisting decisions. We talked about trying to get to a shortlist by the summer and the strategic case by the end of the year. We are on track, as Dr Richards has just said, for that timetable. There is still the risk that those decisions need to be made, but at the moment, the plan that we articulated a year ago has held water and has been kept to.
The new governance changes have happened on time. The work we have done to develop a new approach—developing options, evaluating them and then taking them to the Programme Board—has all happened as planned. We haven’t had the delay that we were all worried about a year ago, and that you articulated a year ago, but it doesn’t mean that the risk, looking forward, has gone away. It has not happened so far, is how I would explain that.
Q4 Chair: That is very helpful. You anticipated what I was about to ask. That is good. Thank you.
I have set out our concerns as formally expressed a year ago. Having heard from Dr Richards and Mr Goldstone, I was going to ask Sir John and then Mr Burton if they would tell us, very briefly, what has happened in the last year that is different and that should give us more confidence going forward than we might have had when we concluded our deliberations a year ago.
Sir John Benger: The key thing is the shift in governance, which is really like a wake up to reality. When the 2019 Act was passed by the Houses, there was some kind of assumption that if we created enough arm’s length bodies, R&R would happen almost automatically, and it was never going to happen automatically. That was just kind of wishful thinking, about having separate bodies—a separate sponsor body, a separate client body—with the example of the London Olympics still relatively fresh in people’s minds, which is quite a bad parallel in lots of ways, because that was definitely going to happen and definitely had to happen in a particular time, and none of those things applied. There was a kind of wishful thinking about it, really, there.
That illusion was then broken and reality set in: if an enormous amount of money was going to be spent on a cherished building, which is a UNESCO world heritage site, as well as the nation’s legislature, politicians could not be kept out of that process. I think the reality of the new governance arrangements, with the Programme Board, which benefits from external expertise, as well as Member input, and the Client Board, which is very high-level decision making, is actually the reality. That is what will happen. If R&R is to happen, key political players have to, first, approve it, and, secondly, approve the methodology by which it is delivered. My view is that that is now much closer to reality.
Keeping the DA separate is a wholly good thing. I am confident that the House’s own Strategic Estates team is not set up to deliver anything like the scale of the works that are envisaged for R&R. But, equally, I am confident that having the client function in-house is the right thing to do, because this is a political environment and we need people attuned to that political environment, who can work with the grain of politicians and key officials, as well as external experts.
So I believe the governance arrangements are markedly better. As we approach this drop-down and the selections and so on—these very gritty decisions that are coming—they are now being taken by the right people, in my view.
Q5 Chair: And that is different from last year.
Sir John Benger: Yes, because the client function was also an external body and didn’t seem to me—it did many things really well, and I do not want to sound overly critical of it, because I am not. I just think it was extremely difficult for them to absorb the kind of politics of R&R well enough. It was almost as if they wanted it to be just like any other major works project, with, you know, clear commercial imperatives or whatever. And it is not really like that here, for all sorts of reasons, not just the political pressures. The security situation is very complicated. The geography and so on is really difficult. I think it is markedly different. Patsy could maybe elaborate on that.
I have more confidence that we are better tuned in to the demands of both Houses and that the engagement function, which I have been on the record as saying I think has been a weakness in the past, is now improving and we can see real headway there.
Q6 Chair: If I may say so, that is a very important point. Of course, we have all been aware of that in our various capacities, as have you, Sir John. It was a great concern that there were people masterminding this massive project who had no idea about what actually goes on in this building. Do you have confidence that that has changed significantly?
Sir John Benger: Yes, I do. I have great confidence in Patsy and her team. I really must stress that I am not disparaging her predecessor; I just think the structure was wrong and now it is right.
Simon Burton: I share everything that John has said. The Programme Board has the right mix of people in the room to move things forward. In terms of things that have happened, there are a couple of specifics that I can get on the record. We have the new delivery agreement agreed between the two Houses and the DA, which is a very important document about how we work together. We have the new statutory instrument in force, which gives the new governance structure a statutory basis.
Crucially, the DA have been busy with the options assessment work and have come up, I think, with over 30 options, but they are working around the priority areas agreed by the two Houses, including fire safety, building services, asbestos, building fabric, inclusive design and so on. There is a Programme Board meeting tomorrow, where we will start going through the range of options in some detail and trying to narrow them down.
One other thing to get on the record is not quite what your question was about, but I think it indicates a change of mood. There is a much more integrated approach now between the R&R teams and the Strategic Estates teams. The Delivery Authority was set up deliberately to be separate from Strategic Estates, and the Act does provide certain constraining factors. Let me give you a couple of quick examples of how the new relationship is working. The new Director of Strategic Estates, Chris Elliott, attends the meetings of the Programme Board, even though he is not a member, and he contributes. Representatives of R&R attend a lot of our Programme Boards for things such as Victoria Tower; there is a good link there. I know that survey work is very important to David, and a lot of good survey work has been done. There is a lot of sharing of surveys between our in-house teams and David’s teams. Although those are not governance examples, I think they provide examples of how the spirit of governance is being delivered on the ground as well, which is very important.
David Goldstone: We are working together, as Simon said, with Strategic Estates and other House teams much more closely and in a much more integrated way, so we are making sure the plans are more aligned and integrated. When we are looking at opportunities to do work early, we are doing that in a joint way with the House teams. We are looking at what different R&R options would mean for accommodation around the Palace, and we are doing that jointly with the House teams. All these strands of the work that will inform the eventual decisions, we are doing jointly. That is really big step forward.
Q7 Chair: And you have confidence that that is really a very different approach from last year at this time.
David Goldstone: Yes, we do.
Q8 Chair: Before we move on to further detail, let’s look at the overall time plan. Dr Richards, there was a point when you said that you were due to put more detailed proposals to Parliament for a decision “sometime beyond 2023”, but do you now see that something might come before Parliament during this calendar year?
Dr Richards: There is a strategic case that we are hoping to put before Parliament towards the end of this calendar year. That will not be detailed, fully costed proposals; it will be “This is what the Client Board and the Programme Board recommend as the best way forward”. Those will not be fully costed proposals; they will be indicative of time and cost, essentially.
When we have got to that point, we will not go cold to the Houses. We have been engaging with Members as well, which is another big difference before. You might have noticed stalls in PCH and the Royal Gallery. We have had over 70 Members of the House of Commons and 50 Members of the House of Lords drop by to those. We are following them up with further one-to-one interviews with Members, and we will be getting back into PCH as soon as we can.
We are hoping that we can keep taking the temperature and the moods of the Houses before we ever have to go to the Floors of the Houses, and that the Programme Board can make its recommendations in the light of knowing what Members are thinking and feeling. That includes going around the domestic Committees in both Houses, to brief them as well. Really, we will be taking what we are calling a strategic case, not a full business case. That will come later, in 2024 or 2025, depending on the timing of any general election.
Chair: Thank you very much—that is most helpful. I am going to hand over to Lord Macpherson to go into more detail on some of these matters.
Q9 Lord Macpherson: Homing in on the estimate for ’23-24, last year activity in the Delivery Authority was stripped back to only essential activities. Interestingly, the costs for the current year are only 7% more than last year. Does that mean that the programme is still in an essentials-only phase?
David Goldstone: No, but it means that we are being careful about how, and how quickly, we are ramping up. What has changed from this time last year—we have alluded to this—is that first and foremost we had the new mandate from the Houses last summer. Subsequent to that, we agreed a plan for the rest of phase 1, up to the stages that Dr Richards just referred to. Because when we bring the detailed proposals back to the Houses it will be later than it was originally going to be, because we have had this reset, we are planning the growth in our activities over that longer timeframe, and therefore are not ramping up as quickly.
The increase from 2022-23 to 2023-24 that you describe is really about more survey activity and accelerating some of the things that we think that the programme will benefit from us starting early. We are looking at an early project that we could do within the Palace, partly to learn and partly to demonstrate the benefits of the approach. We are looking at the works that are necessary to enable the eventual work, so some of the temporary services, putting in a river jetty, utilities—things that are enabling. We would be starting those, progressing design work on those and planning for those in this coming financial year, and indeed the year after.
It is more activity of those sorts, on top of the scaled-back organisation that we established this time last year. That is where we are growing, but we are very mindful, first of all, obviously to do only the mandate and the task that we get from the client. We have a task brief that we respond to, and that sets our tasks. We agree with the Client Team what is necessary and what is valuable to do at each stage, and do only those works.
Q10 Lord Macpherson: Can I also follow up on the cost of this phase of the programme as a whole? You very helpfully provided an indicative cost estimate of £452 million to £472 million, which I think is a bit higher than last year but lower than the year before that. I recognise that it is indicative only, but obviously you have spent £350 million-odd. What assumptions are informing that estimate?
David Goldstone: We will have spent £357 million at the end of this financial year, if we end up in line with our budget. I suppose the way that I think about it is that we had two years within what will be the eventual total of phase 1, following the previous approach prior to the decisions in March last year. Effectively at the end of this year we will have had two years in the new approach. We will have had two years in one way of operating and two years in the new way. The total of that—the annual estimates that have been agreed—comes to, as you say, just over £350 million. In the spirit of how I described the ramp-up that we are anticipating in the coming year, we have then really just extrapolated forward to the point where, as Dr Richards said, we would bring the detailed proposals for a vote, which would be the end of phase 1, which we are assuming will be at the back end of the 2024-25 financial year.
In that year, we would be further increasing activity, really getting on with some of the early works and the enabling activity, and developing temporary accommodation in anticipation of whatever moves are required—temporary accommodation for House functions, teams and people, depending on which option we are progressing with. It is for those activities—quite specific things, but we have given a range, as you referred to, really because we cannot be certain at this stage. We need the decisions to be made, and we need to know which options are progressing. We have given a range, but it would be around ramping up those activities.
Q11 Lord Gardiner: This question is really for David, because I return to surveys. Obviously, £17.5 million is included in the estimate before us. Could you advise the Commission whether the 2022-23 activity was completed as you wished? Also, can you flesh out how many more surveys you think you would need in order to create the outline business case? Clearly, a lot is going to come before the consideration process. I am rather hopeful that your surveys are going to bear some fruit and value for money, as it were, in how we can resolve the conundrum of the restoration of this Palace.
As a rider, perhaps as surveys become more intrusive they become more expensive, but I have noted that surveys are getting more expensive per survey. I suppose at some point, you might get to a point where they are so expensive that there is a question whether they are value for money. This whole area has £17.5 million in the estimate, so could you flesh out for the Commission the value for money of that quite considerable sum of money and how you think it will bear fruit?
David Goldstone: There are a whole number of questions in there. Let me start with what happened in the year that has just finished, as I think you asked what the outcome was against what we planned a year ago. Financially, we underspent against our survey budget last year. There was a mixture of reasons, some of them good: we got some works done more cheaply than anticipated when we contracted through our supply chain. Some did get delayed, and some have been rolled forward into the coming year.
Before last summer, we had not done any intrusive survey work; everything had been visual and inspections, rather than getting into the ground or the building fabric to examine in detail. We completed eight different types of intrusive surveys last year. To give you an idea of scale, we spent over 8,500 hours doing survey work through last summer. We did our first intrusive surveys while the Houses were sitting in the early part of this calendar year, and we did another 1,000 hours of intrusive survey work over Easter. So we have really pushed on very extensively, seeing as we had not done any this time last year.
They are really quite complicated pieces of work in their own right. Intrusive works in the Palace need consent. We need a lot of collaboration with the House teams to ensure we have access and we are not disrupting House business. We have to work with the House teams and with our contractors to make all that viable. And, as you say, we have to be satisfied that we have a scope of survey activity that is good value.
To your second question, we have been looking forward towards a business case. We have been looking at what we really think is valuable, what is good value for money and what is going to really make a difference. I do not think this is quite what you said so I do not think I am disagreeing with you, but surveys are not going to give us the whole answer to Restoration and Renewal. They tell us about the condition of the building fabric and about the ground conditions—about what the ground can hold structurally, about the building fabric. For example, can you put a lift in a certain area? How fire resistant is it going to be? It is questions like that. It will inform design solutions, it will inform estimates of cost and it will inform risk, but it is not going to give us the design answer.
As you rightly said, there is always a question of what is value for money and what is not. We have been planning through over the next two years as to what would be good and valuable to do. We think there are probably around another 50 surveys; we have done more than 100 already, so we have done a large part of the total we think are needed, but there are further areas that we think will be of value, so we will keep looking at this. We will look at the scope and at what information we get from Parliament and other sources, and what we have got from the surveys we have done. It will be a continually refining planning process.
The other important constraint to bear in mind is that even if we wanted to do an enormous amount, we can only do what the Palace site and the work with the House teams can accommodate. We know that Strategic Estates are doing important projects and that there is important maintenance work. We have to make sure we are prioritising what is most valuable for R&R alongside those other priorities, which are no less important.
On the cost, the intrusive surveys will be more expensive per activity than the non-intrusive. The consents is a more complicated piece of work, but we are either digging into the ground or, in many cases, into the building fabric. When we did the first intrusive work last year—the building intrusive survey—we were in about 170 different areas. In that one survey, we were in well over 150 different rooms and areas of the Palace to look at the building condition and the fabric. There is more work involved if, for example, we are digging boreholes, some of which go down up to 70 metres underground. That is an intensive drilling exercise, and it will be a lot more expensive than some of the more visual survey activity, so undoubtedly they are more expensive.
There is £17.5 million in our budget for the coming year. Having done eight intrusive surveys last year, we think we will be looking at between 12 and 15 in the coming year—some of those are carrying on from ones we have already started, but a number are new—and a relatively small number of other non-intrusive surveys. So we have a plan that looks forward over the next two years.
The last thing I would say, to try to give you a complete picture, is that a lesson we learn every time we visit any other historic heritage restoration or renewal project is that they always say, almost uniformly, that discovery about the building’s condition carries on not only up until you start work, but after you start work.
Chair: There is no doubt about that.
David Goldstone: We are only ever going to learn a certain amount from surveys, but it does mean that the more we learn, the better our cost and time estimates and designs will be. There is real value in them. We do know it is only ever going to be so much value, because we cannot survey everything and, as we start work, we will discover new things—we will think walls are structural that will turn out not to be, and vice versa. We are very mindful that it is not going to stop at the business case—that is my point. We will carry on up until we start work and, in effect, carry on discovering after that.
Chair: There has never been a building project in the whole history of time that in the end finished sooner and cheaper and with fewer complications than anyone had said. I defy anybody to bring forward such a project. We do appreciate that, but of course it has to be built in and anticipated, and I think we have done that.
David Goldstone: You asked a number of questions—I am just checking that I answered all of them.
Q12 Lord Gardiner: Yes—thank you very much. I think where I derive confidence is the £17.5 million on surveys in your plan, but also—I picked this up; I think it is an increasing feature, and it may come up later—the greater integration with the in-house teams. There has, perhaps, been too much spinning in separate orbits or silos. I am detecting much greater integration, even if there are distinct projects that the Delivery Authority may be undertaking.
David Goldstone: That is definitely correct. It does mean we have other sources of information and are not totally reliant on surveys. Maybe this is a bit of proof of the pudding of what you have just described. The process for the sharing of information—us asking for information, often about condition or project work on different parts of the Palace—has got much better over the last few months. The number of requests that have been responded to has increased considerably, and the number that are open has significantly reduced. To that end, that is working very well.
Dr Richards: Simon mentioned this earlier, but my business case director sits on the project board for the Victoria Tower, for example. So we are building some structural linkages as well as just talking to each other. It is working much better now.
Chair: Before we talk about the digital side of things, I am going to go to Sharon Hodgson to explore other aspects of construction options and so on.
Q13 Mrs Hodgson: Thank you, Dame Eleanor. David, you mentioned that we are in the second phase of two years; we had the early stage, which was two years, and now we are in the second phase of two years. You have spoken about the value for money of the surveys and said that they were still much needed, but you estimate that we need 50 more surveys. Are you confident that the surveys that were done early for R&R constitute value for money and that, going forward, when you are looking at those 50, you are not duplicating any work?
David Goldstone: I am very confident we are not duplicating any work. On the question of work we did in the first two years, before the reset in the early part of last year, and whether that is value for money, at the moment I am confident. While we are developing all the options that we have discussed and taking analysis of those options through the Programme Board and the Client Board, all that work we did in the early period is still being valuable, because it is informing the way we have evaluated options. We are putting cost estimates to them and we are applying risk to that. The survey activity and, indeed, all the design work we did in those early periods has proven useful to inform that analysis. Therefore I would say that if and when we get to the decisions we talked about earlier, it will have informed those decisions and will have been of value.
Whether we use the specific pieces of work in future will depend very much on the options that are adopted through the decision making. It is quite possible that there is work we have done in the past that at some future point we will be able to look back at and say, “Well, actually, we might not have done that if we had known what option was going to be selected,” but I cannot say that until those decisions are made, and anyway it will definitely have helped inform the decisions.
Mrs Hodgson: I think that covers all my questions. Thank you.
Chair: Very good. Thank you very much. I now go back to Lord Macpherson.
Q14 Lord Macpherson: I am very impressed by your £5.5 million saving in the data and digital area. I am just trying to understand this. Was it the result of your achieving more favourable terms from your new supplier, or as a result of reducing the scope of the service?
David Goldstone: There was an element of both, actually, but primarily we procured a new contract. We did have some changes of scope, but it was a completely new contractual relationship. We rationalised what had previously been a number of suppliers and quite a complicated supply base that we had inherited from the previous arrangement, that the Houses had put in place prior to the DA. I think that this time last year you were asking me about the investment spend we were anticipating in data and digital, and one of the strands of that was to get in a new supplier to provide savings in the operating costs in future years.
That saving really relates to the part-year benefit of the new supplier who came in in the autumn; we had half a year’s benefit. In the coming year, our overall data and digital costs are reduced further, because we have the full-year benefit of that. So it is a new contract with a new supplier with better terms. We did take the opportunity to look again at all the service standards and the requirements in that contract, so there is a rationalising of scope as well, but predominantly, the saving was through the competition for a new, more integrated supply relationship.
Q15 Lord Macpherson: I am also trying to get a deeper understanding of the £9.7 million for operational costs. As I understand it, you have 39 full-time equivalents, so, presumably, given that that would imply a cost per person of £250,000, I assume that there is more to it than simple numbers of staff.
David Goldstone: I think the £9.7 million you are referring to is the budget for the operational service for the coming year, so it is both for the staff that we have employed and for what we are paying contractors. If I can just take a step back to what we anticipated happening, and which has now happened, we initially had no in-house team at all. We had, I think, around 20 different contractors engaged across different aspects of the data and digital service, and the shift we have made over the past two years is to establish an in-house team that has grown over the years, and, in parallel, to completely rationalise our contractual relationships—so from around 20 to now basically three main contracts. We plan to have up to 39 staff in the coming year—we have not got that today, but that is the budget for the coming year. The cost of that team is about £3.5 million of the £9.7 million you referred to, and the rest is the contract costs. The way I am looking at it is that we have made the £5 million-plus saving that you referred to, so what is now costing £9.7 million was costing £15 million last year. We have a slightly larger in-house team and they have enabled and facilitated much better value-for-money contracts, and therefore we have saved £5 million.
Lord Macpherson: That is very helpful.
Chair: Yes.
David Goldstone: It is a good story.
Chair: A story—we like that.
David Goldstone: I don’t think it is what we anticipated happening a year ago.
Dr Richards: It was the situation that you inherited. I know that you will not say this, David, but it was a situation inherited by David and his team from the previous in-house team, and also they are having some deep dives done. Everyone recognised that spending in that area was too high. It is a result of the checks and balances working as well.
David Goldstone: Just to nail the point home, our total spend on all data and digital services is less than half what it was two years ago. As Dr Richards said, it was too high. We knew it was too high. We knew we had to rationalise it, and we have.
Chair: Thank you. Along the same lines, I will go to Lord Gardiner to explore another aspect.
Q16 Lord Gardiner: If I can draw your attention to the corporate functions. In the estimate, £12.5 million is included for the Delivery Authority’s corporate functions. One area that I wanted to drill down on was the communications function. Picking up on what the Clerk of the Parliament said earlier about greater integration and working with in-house teams, my understanding is that it will be a new communications team of about half a million pounds—that is what I have here. What consideration was there as to how vital it is to have your own communications function—whether there is a greater way in which you could perhaps work with our communications teams, by which I mean Parliament’s, and the knowledge that the in-house team would have on comms?
I mean this in a positive way of mutual help. My scrutiny here is the extent to which you are satisfied that you absolutely need your own communications function, or whether there are ways in which, from a value for money point of view and, indeed, utilising expertise within Parliament, you could explain to the Commission whether this either could be reviewed, or whether you are clear that this is distinct. I just want to tease out a new half a million pounds. The corporate functions have, I think, a 78 full-time equivalent cadre. Picking up the spirit of working in closer synergy, which I think is very positive, I just wonder whether you will be thinking more about how this could be looked at.
David Goldstone: The first thing to say is that this is the product of that closer working. It may not be obvious on the face of it that that is the case, but part of the work that Dr Richards has been leading on how we should all work together in the future—the Houses, the Client Team and the Delivery Authority—is about where different communicating and engaging activities should happen. This was not solely a Delivery Authority decision; we all jointly agreed that there are some communicating activities that are very specific to the Delivery Authority’s responsibilities. For example, we will be engaging, and we already engage, quite an extensive supply chain of contractors, and we will be doing some major procurement in the future as the programme goes forward, so communicating with current and prospective suppliers in the market is very much our responsibility.
We are engaging around the whole of the UK to make sure the benefits of this project and the opportunities to develop skills are known. We are visiting all the nations and regions of the UK to talk about the opportunities, including where there are skills opportunities or specialist areas of industrial expertise. That is very much our activity. We talk about our surveys, and communicate what is happening and what we are learning from them.
There are some very specific activities that we all agreed, with the House teams and the Client Team, were a Delivery Authority responsibility. That is very distinct from all the parliamentary engagement that we discussed earlier, which is not our responsibility. This team does not have any responsibility for that. We are anticipating that we will effectively be working through to the House communication teams, so there is no duplication. Fundamentally, this is replacing a service that we used to have supplied for us by the Sponsor Body. The Sponsor Body, as you know, doesn’t exist any more, and that team isn’t functioning in the same way in the Client Team, so there is no duplication. It is a discrete activity that is Delivery Authority-specific.
Sir John Benger: To pick up on that, I agree with David completely. In Patsy’s team—the Client Team—we are absorbing the comms function into the House comms service. We have a very excellent communications function in the House. We have some very experienced people who understand Parliament very well, and I am confident that we can centralise that function and absorb the people doing the comms function, hitherto in the Sponsor Body, into the House team as we need them. We will look at value for money and organisational design while we are doing that. That work is very nearly complete. That is distinct from the engagement work, which sits squarely within Patsy’s team; it is at the heart of her team.
As part of the overall picture, we need to stress the importance of communication to this project. There is a narrative out there, which is: “Look at these spoiled politicians. They are in it for themselves, and you wouldn’t believe what they are spending doing up their own place.” I am afraid that is the reality.
Chair: We are very well aware of that, and we appreciate that it has to be constantly counteracted.
Sir John Benger: Exactly, and in that counteraction there is some hope, because this building is loved. It is a UNESCO world heritage site for a reason. Its inhabitants, including our good selves, may not be loved, but people are passionate about this building.
Chair: You are loved more than we are—but that’s not saying much.
Sir John Benger: On a weekday evening in the Benger household, we sometimes settle down and watch “Grand Designs”. Normally, it seems to involve a couple of people living in a caravan waiting for the glass to arrive from Germany, with the bills going up and up, but sometimes they recover and repurpose a historic building, and do exciting things to it. It is striking to me when I watch that programme, as someone with very little practical skill at all, how fascinating some of the technical problems that they seek to overcome are, and how well that programme—in my view, anyway—communicates those technical challenges. Actually, as you get absorbed in the story of the building, you are willing it on and you want them to succeed and not fail.
I think there is something here about that. It strikes me as very interesting that we might need a cofferdam to do R&R. I think they had a cofferdam in the 19th century when they were doing their own. That is really fascinating—the technology is the same. They were overcoming the same problem and, even with all the advantages of modern technology, we might still need a cofferdam.
On one level, R&R is just replumbing and rewiring and getting asbestos out of a very old, problematic building, but, on another level, it is creating and sustaining a building that is at the heart of the nation and at the heart of democracy. I think it is vitally important that that story is well told. Our teams will do really well on the overall narrative—the political narrative—and describing where we are there, but David’s team has phenomenal technical ability. They are talking not just to the people, although that is very important, but to the technical community. There are lots of trade publications, and we want them to feel involved and engaged as well. One of the keys to whether or not we succeed in R&R is how convinced the public are that we are doing the right thing.
Chair: When you think of the outcry there was when they put those glass pyramids outside the Louvre in Paris, and when they rebuilt the Reichstag in Berlin with that big thing on top, it would appear that we have all got used to those things and think that they are miracles of modern architecture; yet, when they were planned, there was a massive outcry.
Q17 Lord Gardiner: In terms of the two exchanges, and particularly picking up Sir John’s last points, I suppose my mind thinks of the importance, therefore, of the integration—that if the Delivery Authority has key communication functions, they are shared. One of the strengths of where we are, I hope, going towards is that actually we are all on the same team, and the expenditure on comms here actually bears fruit with other comms in Parliament. Everyone has their contacts and their level. In terms of value for money, I hope that this new comms team is embedded—although it may be the Delivery Authority’s—in the overall comms plan.
Dr Richards: We have had a piece of organisational design work done, and that is what it is concluding. It is designed to work in that way. Rather than having a comms team within the Client Team, we have a focus on what we really do, which is business case, assurance, engagement. It is not particularly comms. It has been designed so that there will be the function doing the external and supply chain communication in David’s team working with the Houses’ comms teams. We also envisage some sort of programme role that oversees those comms and areas, ensuring that they do not drift apart and controlling the narrative around the work that is already being done by the estates and security teams and the other major operational teams. It will not even be just about R&R the programme any more; it will be about, “This is what is happening on the Estate. These are the programmes that we are planning.” The audience are not particularly concerned about who is doing those works, as long as they are getting done. That will the approach—to ensure that it is totally seamless and actually being consciously designed in that way.
Simon Burton: If I may I add just one tiny point, Patsy has talked about the two Houses’ comms teams. There are already very well-established mechanisms for the Lords and Commons comms teams to work together and share resources, and we will build on that in bringing this new work forwards.
Q18 Chair: That is very reassuring; thank you. I have just a couple of small points before we conclude, then I will ask each of the members if they have any other leading questions. David, you referred to work in the regions and all around the country. It has been mentioned many times in the planning work that has gone on, and in debates in the Chamber, that it is important that the economic generation that comes from this massive project should benefit all parts of the United Kingdom. Is that under way in the way in which suppliers are being sourced, and so on?
David Goldstone: That is really important. Since the Delivery Authority was established, we have been very mindful of trying to make it, as you say, something that benefits the whole of the UK, partly to counteract the tendency that Dr Benger described of how the project might be seen as a London-centric, home-of-politicians one. It is, obviously, the UK’s Parliament.
We had an extensive programme of visits to all the nations and regions of the UK going on until a year ago, where we were engaging with local political leaders and businesses, and discussing with training providers what particular skills would be relevant to the project and the priorities, because there is specialism in different parts of the country. We paused that work during 2022 when we had such a level of uncertainty about the future of the programme, but we have recommenced it. We have been getting out and around the country again extensively over the past few months. We expect to have got around all the nations and regions of the UK by the end of this year.
I am always mindful of the reality of the spreading of the economic benefit. We have this overriding obligation to make sure we get best value for money as well and to compete our contracts openly, so to an extent who actually ends up winning work will always be determined by the competitive process. However, we make sure that the opportunities are understood and we do everything we can to make it easy for contractors all over the country to bid—that is, absolutely, a priority.
The survey work that we talked about earlier is, I suppose, the main area where we have on-site work going on already. We have had a good spread of contractors around different regions of the country. About two thirds of our survey contractors are small and medium-sized enterprises, so we are not just going to the large contractors—
Chair: That is good. That is already a statistic on which we can rely: two thirds. That is great.
David Goldstone: Yes, almost exactly two thirds. I think that is really important.
In this context, we also make a big effort to ensure that we are maximising opportunities for apprenticeships. We work with the Social Market Foundation to bring in interns who would benefit, and again that is from all over the UK. We are doing as much as we reasonably can at this stage of the programme, when we are not actually into the large construction work yet. Making sure that the opportunities are understood all around the UK, spreading the work that we are doing as far and wide as we can, and doing what we can to invest in skills around the country—we are doing all those.
Q19 Chair: Your delivery partner is based in London. I suppose that is not surprising.
David Goldstone: Yes. It is no secret who it is: Jacobs. Again, that was a contract that we inherited from Parliament, but we have refocused it on the current deliverables. That is our integrated team delivery partner, yes.
Q20 Chair: Will you continue with them, or will you develop your own in-house capability to a greater extent?
David Goldstone: We have been developing our own capability, and we have reduced our reliance on that team significantly over the past three years, since the DA was established. We reduced our resourcing from the delivery partner by about 30% this time last year, and it is at about the same level in the coming year as in the year just finished, so we are still about a third lower, partly as we have built up the Delivery Authority’s own team and from when we refocused the work. We are much less reliant on them than we were.
I don’t think it is any secret—I think I have said it here before—but we will recompete the roles once we know the future direction of the programme. Once decisions we discussed earlier have been made, at the right time we will go to the market for that delivery partner role and for the design teams we will need to take the programme into actual delivery—once we have the initial decisions. If we had done the competition earlier, we would in effect have stopped all the work that has been going on and had significant further delay, so we will time it around when we know the decisions will go through the approval process. We will recompete at that point.
Q21 Chair: Is it still envisaged that there is an R&R programme that will start on a particular day, or is it emerging that R&R is happening now, with the Victoria Tower and other work that is being done? This is something that has always puzzled us. What if I were to ask you the question: when do you envisage that the actual project will start in earnest? Or has the project started? Is it a rolling project? How is that now envisaged? I ask because I think this is something that may well have changed significantly since a year ago.
David Goldstone: I think it is a very good question and, “It is not a very clearcut answer,” is the honest truth. The Act defines very clear phases of the programme, and we are in phase 1; we are doing work under phase 1. This parliamentary process, by which you approve our annual estimate, is because we are doing live work planning and designing for R&R. So at that level, it has already started. We are planning to do an early project; we are planning early works that will lead into—will be ahead of and earlier than—the main works. There is a real decision point when the Houses have the vote on the detailed proposals—the point that Dr Richards referred to as probably the back end of 2024 or early 2025. That takes us from phase 1 to detailed costed proposals—
Chair: Sorry, could you just repeat that? The Houses will—would you mind saying that again?
David Goldstone: Both Houses have to vote to approve detailed proposals—
Dr Richards: Costed.
David Goldstone: Costed proposals for what the scope and cost of the future programme are going to be. At that point, with a positive vote in both Houses, we go from phase 1 into phase 2 and so phase 2 starts at that time. At that stage, we will be going into much more detailed design; we will go into the procurement processes I described earlier for the contractors to do the works. This is going to be a very large and complicated planning application. Getting statutory consent in relation to a world heritage site, with all the debates there will be about the level of work and the impact on the heritage facilities, will be really important. So we will go into detailed design, planning and procurement before the detailed work starts. “There isn’t a single start point,” I think is what I’m saying. What we have done, which we referred to earlier, is make sure the narratives are much more integrated. The works that Strategic Estates and House teams are doing now to sustain this place working effectively are an important part of a story, if you like, where Restoration and Renewal will come along and fix a large part of the Estate; there will have been a lot of work done beforehand, and we are much better aligned in our planning of that.
Dr Richards: We have a lot of jargon in this programme; there’s programme jargon. There’s parliamentary jargon and then there’s R&R jargon on top. So, as well as thinking of this as phase 1 and phase 2, we sometimes talk about main works. After the Houses have approved whatever David has proposed is when, in a way, it gets handed over to the Delivery Authority to do the main works, and that is when you think about everything in the basement and possibly having to vacate the Chambers and so on. But we are saying Restoration and Renewal has started, because the in-house teams have clearly done the encaustic tiles and so on. But that is different from the R&R main works. You might also hear us talking about preparatory works or early works, and those are things that we are allowed to do, if we can prove the proof of concept, before approval for the main works.
So it’s our own fault! We have had to produce a glossary for our own Programme Board, because there are just too many terms around. But you could think of the point where the building has been handed over to David and he can get a shovel in the ground as the main works. What we are trying to do all the time is think, “Can we get the Delivery Authority involved earlier, beyond the constraints of the Act, to just start working together with the Estates teams?” And there are some tests that the Client Board has agreed that say, “Yes, this would help qualify as early R&R works if it teaches us valuable lessons”—for example—"about how R&R could be conducted.” So we are constantly pushing those boundaries now.
Sir John Benger: The Act says at section 7(2): “No Palace restoration works, other than preparatory works, may be carried out before the Sponsor Body has obtained Parliamentary approval”—that was when we had a Sponsor Body, but that is now us, Simon and me; we’re them—“for…Delivery Authority proposals in respect of those works, and…funding”. What that is saying is that basically David has to fix the Building and we can’t beat him to it.
However, there is much more nuance than that, which is one of the reasons why David said it is complicated. First of all, Simon and I have a legal obligation to keep this building as safe as possible, so we will do safety-critical works, which is one reason. The Elizabeth Tower preceded R&R; that was already in train. The Victoria Tower does not precede R&R, but we will, none the less, start addressing all the stonework failings on the building because there is a risk to human life of keeping the stonework in an imperfect condition. There is a second point to make: when the Joint Committee did its report on R&R, it envisaged the Northern Estate as being part of David’s kingdom, which is a really chunky piece of work around Norman Shaw.
Q22 Chair: And by that you mean—
Sir John Benger: Norman Shaw North, Norman Shaw South, Derby Gate—
David Goldstone: Richmond House.
Sir John Benger: Richmond House. All of that would have been David’s. We have taken that away from him. An earlier decision was taken that we would fix those buildings. So, Norman Shaw North, now, is in the process of an extremely high-budget renovation programme. I think it is going very well by all accounts. We are doing that right now. As well as helping us fix a building that needs fixing very badly and urgently, I am hoping it will give Members confidence in the process of restoring and renewing this building.
My impression as someone who has worked in this building—the Palace—off and on over 36 years or something like that—I have been in other buildings too—is that this building is very much showing its age now. It is becoming very tired and that is even without the structural problems, the fire risk, the asbestos risk and goodness knows what. As we revive buildings—we have seen it with the Elizabeth Tower, actually. All I heard about a year ago were cost overruns in the Elizabeth Tower and that is fair enough; there were some project issues there. Now, people tell me how fantastic the Elizabeth Tower looks, how it is an absolute jewel in Parliament and people just say that it is brilliant. That psychological momentum is one of the things that we need to get in this project: that when Members return to those offices in Norman Shaw North, they are going to be very pleasantly surprised by the quality of those offices. We are already seeing it with Derby Gate, actually. The Derby Gate refurbishment has been done really well and people are very positive about it, but we need to get momentum behind it.
Q23 Chair: That is a very good point. It should be noted that although there is still preparatory work to be done on the big project, there is a lot happening right now, because if it were not, our collective health and safety obligation would simply not be fulfilled.
Simon Burton: If I may add two very brief benefits from this scenario that Sir John has just described. First, Members are beginning to see and take ownership of the benefits that these works bring, and a sense of pride is already creeping in around the place, which I think is helpful.
The other thing, counter to that, is the sense of realism: that we do actually work currently in what is largely a building site and we are continuing to deliver the business of Parliament safely in that environment. However, it is a different environment from what people were accustomed to 10 years ago. I think both of those psychological angles will help as we move forward, taking some of the bigger decisions about R&R.
Chair: Thank you. Let me just check if there are any other—Sharon.
Q24 Mrs Hodgson: A couple of follow-ups to your questions, Chair, if I may. On the contracts, the suppliers and when it comes to going further than we already are, is there anything built in that will ensure that they are UK-based and maybe UK-owned businesses that get these contracts.
David Goldstone: The ones we have at the moment were procured under EU procurement rules at the time. We will follow UK procurement legislation now. We still, in effect, are bound to have open competition so I cannot guarantee UK contractors. What we can do—which we are doing—is make sure that UK suppliers and the nations and regions of the whole of the UK are aware of the opportunities and aware where specialist skills may apply and that we are very keen, as we discussed earlier, to enable the whole of the UK to benefit. I cannot say that our team is going around the rest of Europe with those messages in the same way that we are going around the whole of the UK. We are doing that only in the UK.
Q25 Mrs Hodgson: Excellent. That is good to know.
I wanted to talk about after the main works have happened, and when it comes to the finer points inside. I do a lot of work with the Heritage Crafts Association, and I am chair of the all-party parliamentary group on art, craft and design in education. I was a big supporter of the continued use of vellum, and there is book binding. There are so many skills. When it comes to the carpentry and joinery and all of that, will you be ensuring that you call on the experts that exist within this country?
David Goldstone: Going to see other heritage projects, it has been very striking that those skills are absolutely crucial and are in very short supply. It is a very specific challenge for this project. We had a very interesting experience learning about the stonework team on some of the cathedrals around the UK, which we visited. Whether we wanted to or not, we are going to be tapping into those specialists with that expertise, because it is not doable otherwise. These are not general construction industry skills—they are very specific—and we will be employing those experts.
Mrs Hodgson: They will be very happy to hear that. Thank you.
David Goldstone: We might need to follow up with a separate conversation, given your wider interest.
Chair: Point well made. Lord Macpherson.
Q26 Lord Macpherson: What you have said today has been really quite encouraging in terms of slippage—that there hasn’t been any slippage of late.
Let us just assume that you don’t get a clear answer from Parliament at the various points where you are envisaging either strategic decisions or detailed costed decisions. What does that mean for your outfit, David, and the costs of phase 1? From what you have been saying, there is a degree of permeability between phase 1 and phase 2, but there must come a point where you start marking time and wasting money.
David Goldstone: Absolutely. This is a really important point, so I am glad we have come to it before we finish.
We resized ourselves, in effect, this time last year, but with very uncertain knowledge about what the future was going to hold. We have responded as we have gone through the various stages over the last year, and as the Sponsor Body and now Client Team have given us specific task briefs to respond to. That is all shaped around achieving the current plan. We are assuming that that plan holds and that those decisions are made and that we progress as we have discussed.
If that doesn’t happen, we would have to look at ourselves in a different light and recognise that those activities that we are planning are going to go on over a longer time period and do not need to proceed at the same pace that we are currently planning them.
I don’t know today what the answer to that would be. This is a conversation we have had with the Programme Board as well—that we would absolutely have to look at the profile of our spend and our resourcing in that light, in a different way to the way we have for the last year and a half.
Simon Burton: The other side of that coin is that if decisions are not taken, every year that passes, John and I as corporate officers continue to be responsible for the building today and the state it is in. As time passes, those costs are only going to go up as risks increase, so there will be another whole angle there to be thought about carefully, as we are already doing. If there are decisions, those become much harsher, much sharper and much more real conversations.
Chair: Which brings us full circle to where we started this meeting, which was on the points that we made a year ago. I will not read it out again, but we had “serious reservations that in the absence of formal and definite political decisions” we were concerned that “value for money may be put at risk.” That was a very mild way of putting it. It would do no harm for us to reiterate that.
In the evidence that you have given us, you have been very clear that you have made a lot of progress in the last year, but that you will not be able to make real progress with tangible value for money and fulfilment of the task that you have been given if you don’t get the political direction and the decisions that are necessary. I can see that you are all nodding and I think that my colleagues are nodding, too. That sums it up.
We are very grateful to you for coming in front of us this afternoon. It has been very helpful to be able to go into so many aspects in detail with you. We appreciate the difficulties that you face. We are all in this boat together of trying to do our best, and having things constantly thrown at us from outside, but that is the nature of the business that we are in—that we are in, not that you are in. We understand the difficulties that you face, and I hope that what we have discussed this afternoon will help you, because that is the end that we all want to achieve.