Parliamentary Works Estimates Commission
Oral evidence: Parliamentary Works Grant Main Estimate 2025-26, HC 872
Wednesday 7 May 2025
Ordered by the House of Commons to be published on 7 May 2025.
Members present: Ms Nusrat Ghani (Chair); The Lord Gardiner of Kimble; The Lord Macpherson of Earl’s Court; Nick Smith.
Questions 1-50
Witnesses
I: Tom Goldsmith, Joint Accounting Officer of Restoration and Renewal and Clerk of the House of Commons; Simon Burton, Joint Accounting Officer of Restoration and Renewal and Clerk of the Parliaments; Russ MacMillan, Chief Executive, Delivery Authority and Charlotte Simmonds, Managing Director, Client Team.
Witnesses: Tom Goldsmith, Simon Burton, Russ MacMillan and Charlotte Simmonds.
Chair: Welcome to today’s meeting of the Parliamentary Works Estimates Commission. We are here to consider the Parliamentary Works Grant main estimates for 2025-26. I am Nusrat Ghani, the Chairman of Ways and Means. On my left I have Nick Smith; on my right I have Lord Macpherson and Lord Gardiner. Will our witnesses please introduce themselves for the record?
Charlotte Simmonds: Hello. I am Charlotte Simmonds, managing director of the R&R Client Team.
Tom Goldsmith: I am Tom Goldsmith, Clerk of the House of Commons.
Simon Burton: I am Simon Burton, Clerk of the Parliaments and the Lords. Tom and I both serve on the Programme Board and the Client Board for R&R.
Russ MacMillan: I am Russ MacMillan, chief executive of the Delivery Authority. I have been in post for two and a half months.
Q1 Chair: We have quite a few questions to get through, so I will dive straight in. My first question is for Mr Goldsmith or Mr Burton to follow up. Could you please provide us with an update on the progress of the Restoration and Renewal programme over the last 12 months?
Tom Goldsmith: Thanks very much, Chair, for all the work you do in looking at this. It is very reassuring to know that these things are properly scrutinised.
There has been quite a lot of work and progress over the last year. We last came to this Committee about a year ago. The main focus of the work has been on continuing to develop the three options. You will appreciate the EMI option was the least mature of the three options. It was the one that was somewhat late to the party. Lots of work has been going on, on all three of the options, and we are confident that we will be able to give the governance Committees all the information they need before the end of this year.
The boards have changed somewhat, given the election, but I am pleased to say that we are up and running again and have been for quite some time now. The Programme Board is particularly active and interested. It is quite an invigorating board to go along to, because there are some really good questions and scrutiny of what is going on. That is going well.
There has been lots of Member engagement, led primarily by Charlotte’s team, since this time last year. Since the election, there have been 217 interactions with Members of either House. That includes one-to-one meetings, Committee meetings and people stopping at stalls in Portcullis House, for example, to talk about what is going on. That is 150-something Commons Members and, if my maths works, about 60 Members of the House of Lords. Overall, going back a few years, we have now reached more than 900 Members. There has been good engagement since the election, and of course there have been significant changes at the Delivery Authority, which you will probably want to ask Russ about later on.
Simon Burton: I will just add a sentence or two to that very thorough analysis by Tom. The key thing that we are all focusing on at the moment—the Programme Board, the Client Board and the team in the Delivery Authority and the Client Team—is getting those costed proposals published on time later this year for consideration. Having been through the Programme Board and the Client Board, they will be published for consideration in the two Houses. I am sure we will come back to that later in the session.
Q2 Nick Smith: Mr MacMillan, what are your initial impressions of the R&R programme?
Russ MacMillan: Very good, actually. I am very impressed by the quality of the information that is now available to support the decision-making process, and very impressed by the skills and capability of the organisation. As my colleague said, we are all very focused on the need for a set of costed proposals and then a decision this year. That is really important for the programme.
The other thing that I am putting quite a lot of thought into at the moment is the wide body of knowledge about what best practice looks like in major programmes. We are doing an awful lot of work to think about how we would import as much of that as possible and to go through the mindset change that would be required as we move from the development part of the programme into the delivery part of the programme, if that is what Parliament decides to do.
Q3 Nick Smith: Is the programme where you would have expected it to be?
Russ MacMillan: I think so. Clearly there is a lot of history on the programme—you will know a lot about the reset that happened in 2022. But do we have the right pieces of information coming together to support decision makers? Absolutely, yes. Do I think the information we are putting forward is appropriately backed off, assured and tested? Yes. I think all the ingredients are there, and now we need to see what happens through the decision-making process.
Q4 Chair: Mr Goldsmith, you mentioned that there have been 900 Members reached and 217 interactions, and you said that you are on track to present at the end of the year. Is that correct?
Tom Goldsmith: We are hoping to do everything we can to make sure that the Houses, and before them the Client Board, and before it the Programme Board, have all the information they need to be able to take a decision by the end of the year. Of course, when the decision comes to the Houses is not in our gift; it is in the gift of the business managers. We hope that we will have given everything to the board so that the costed proposals can be published by the autumn.
Q5 Chair: Mr Burton, you said that the costed proposals will be published by the end of the year, but the question that we all have, Mr Goldsmith, is “When will all three options be ready to be presented to Parliament?” You say that that is down to the board, but do you feel that you are on track and that it could be presented to Parliament by the end of the year?
Tom Goldsmith: Yes.
Simon Burton: Yes, we are agreed on this.
Tom Goldsmith: Absolutely. We are working at the moment on a timetable towards publication by the autumn. The Programme Board still rightly has—as you would expect on a programme of this size—lots of questions and lots of things it wants to assure itself about, but we have had some good messages from Programme Board members recently, who say that they think there is no really significant new information that they need. It is a matter of making sure that all the information we have is properly aligned and comparable across the three options.
Simon Burton: It is a testament to the hard work of colleagues in the Delivery Authority, Strategic Estates, EMI and the Client Team that we have so much information in a form that is ready to be pulled together and presented. That last step is the next couple of months’ work, as Tom says, to ensure that the options can be presented fairly and be looked at together, and that all of you as Members of both Houses have the information that you will need across a number of areas to take those decisions.
Q6 Chair: Mr Burton, when Mr Goldsmith says “autumn”, is he using it in real-world terms, or is it how Ministers and civil servants use the word?
Tom Goldsmith: Autumn goes on officially until 21 December.
Chair: There we are. That is what I wanted clarity on.
Tom Goldsmith: I don’t think it will be before November, but I am hoping it will be in November.
Q7 Chair: So do you have confidence, as of today—I appreciate all the risks involved—that all three options could be presented to Parliament by the end of the year?
Tom Goldsmith: Yes, certainly from our point of view, in terms of getting all the information and data together. The slight unknown is what the political bodies will do. As I say, we have been working very closely with the Programme Board. The Client Board will need to look at all this information, lots of which will be new to it, so I cannot say to you with absolute assuredness what the Client Board will make of it, but we are confident on the official side that we are on track for the timetable that we set out.
Q8 Chair: As you have already mentioned, you are not in complete control of the whole process. Can you explain to us what you have put in place to manage those risks? If the three options are not presented to Parliament by the end of the year, what is your plan 2?
Simon Burton: I will start, if I may. One of the things that we have done over the last few months is deepen the relationship between the workings of the two boards: the Programme Board and the Client Board. There is more information flow in those spaces, particularly involving external members of both boards, who are very active.
The other thing, as Tom said, is that the decision on when the decisions will come to the two Houses is for the business managers in the Government. I think I am right that the Leaders of both Houses are on the Client Board, so they will be involved in the discussions at that level. But we are making sure, at official level, that officials within Government have visibility of what they need, when they need it, because the Government’s view on this will be very significant.
Q9 Lord Macpherson: The Government’s spending review is due to reach a conclusion later in the year. Have you had any discussions with the Treasury around how to fund the early years of phase 2? If you have, what assumptions are you making?
Tom Goldsmith: Obviously we are formally not part of the spending review in Parliament, but I take the point that that is the context in which this is all operating.
We work with the Treasury at official level on an ongoing basis; Charlotte’s team does that. We have not yet given them specific costs for 2026-27 onwards. That is partly because we have not given the Programme Board and the Client Board those finalised costs, but they are certainly aware of the ballpark figures we are talking about and aware that, subject to the House’s decisions, there could be a large increase in expenditure from 2026-27 onwards if we do get to move into phase 2.
Q10 Lord Gardiner: This is a question for the Clerks and Ms Simmonds. In 2022, the Client Board anticipated that the right time to design longer term governance arrangements for phase 2 would be in the context of the strategic outline business case. What do you expect will need to change in the governance and accountability structures for phase 2? How do you think it will vary under the three options? Indeed, who is actually responsible for making the key decisions on governance and accountability arrangements for phase 2? Who do you anticipate will deliver the preferred option in phase 2? When do you envisage that we can expect to see the consultation stage of R&R commencing?
Charlotte Simmonds: Shall I make a start on that? The Client Team has done preliminary work to look at the governance and accountabilities in phase 2, with a view to informing a reconvened Independent Advice and Assurance Panel—an expert panel that gave advice on the current governance arrangements. We are reconvening that panel and they will advise the Client Board on the governance for phase 2.
There are some provisions already within the Parliamentary Buildings (Restoration and Renewal) Act, including the continuation of this Commission. Subject to there being no suggested changes, they would continue.
On lessons learned around phase 1, one of the benefits of the current governance is the closeness to Members and being embedded in the parliamentary community. That is something that we should take forward for consideration into phase 2.
On variation across the options, all options are a major undertaking. They are a major programme of works, and they all have a very significant heavy engineering phase at the early stage, so the governance and accountabilities would look quite similar across the options for that stage. There may be a change towards the tail end of the longer options, but largely they would be the same at the initial stages.
On responsibilities for the decision making, the Independent Advice and Assurance Panel would advise the Client Board. If there are any significant changes to the legislation, that would be through primary legislation, so it would have to come back through the Houses for approval, but it would be for the Client Board to consider what it wanted to take forward.
You also asked who would deliver the preferred option as part of that. As I said, any of the options would be a major undertaking, and the Houses would need additional capability to deliver them. We are talking about quite large procurements, very significant supply chain management and heavy engineering, so we would need additional capabilities. That is really why the legislation established the Delivery Authority in the first place. We assume that the Delivery Authority would be in place and providing those additional capabilities to Parliament.
Did I miss any of your questions, Lord Gardiner?
Q11 Lord Gardiner: On the basis that we assume that there is the political direction and decisions are made, when do you envisage that we could expect the construction stage to begin, particularly keeping in mind this front end of big engineering work?
Charlotte Simmonds: When would the works start, do you mean?
Lord Gardiner: Yes.
Charlotte Simmonds: Under the current plan, if we get a decision in 2025, moving into 2026-27, we would undertake the procurement for the new supply chain, we would do the detailed design and we would start the planning process so that into 2028-29 we would start the construction works: the enabling works, including the installation of temporary services and the installation of the river jetty. You probably cannot see the platform out of the window now, but those works are under way; the survey works are under way on the riverside, as are the temporary accommodation works. They would start during this Parliament.
To be clear, what is unlikely to happen during this Parliament is any significant decant. That would be in a future Parliament. But we do expect those works to start during this Parliament from 2027-28, and they would happen alongside the early works. We have talked about the river jetty; we also have Victoria Tower as early works and we have Cloister Court, as well as a mechanical, electrical, public health and fire safety programme of works, so there will be a lot of construction activity.
Lord Gardiner: Is there anything from the Clerks on that matter? Thank you very much.
Q12 Chair: Mr Goldsmith and Mr Burton, I have been reflecting on your answers to my earlier questions. I am trying to get my head around the process and who has responsibility where. For clarity, once the costed proposals have been finalised and agreed by the Client Board, are you at liberty to publish that information to allow parliamentary debate on these before the options are scheduled by the Government to be decided on by both Houses?
Tom Goldsmith: They would certainly be published before the Houses were asked to take a decision, because it will be those costed proposals that include all the information that the Houses would need.
Q13 Chair: Who decides on when they are published? Do you decide that, or is that taken by another part of this estate? I am just trying to work it out.
Tom Goldsmith: It is a good question. The Client Board would have to agree the final report. Formally, whether it is then completely within our gift to give it to the Houses or whether we need a decision of the Client Board to say when we publish it is something that I would need to check. We could drop you a note on that.
Chair: I think correspondence would help.
Tom Goldsmith: Absolutely. Certainly, I can confirm that it is the understanding of everyone involved who I have spoken to that the Houses need those full costed proposals before they are asked to take a decision.
Chair: I just want to know what that window is and who decides.
Tom Goldsmith: I understand the point.
Q14 Nick Smith: My question is to the Clerks, I think. Is the phase 1 estimate limit of £475 million, which has been set by the House Commissions, the upper and final limit? What steps are you taking to prevent phase 1 expenditure from continuing beyond 2025-26?
Tom Goldsmith: Obviously it would be up to the Commissions to decide whether they wanted, for whatever reason, to extend the phase 1 expenditure limit, but the timetable we have set out, which we have been talking about, means that as soon as we get a decision from the Houses, we move into phase 2. If we meet the timetable that we have been talking about, there is no need for any more phase 1 expenditure. If there is some delay and we do not get decisions on the timescale we are talking about, I suppose it is possible that we would then be looking at an extended phase 1, and the Commissions would need to reflect on that. But if things go to plan, there will not be any need for that. Is that right, Charlotte?
Charlotte Simmonds: Yes.
Q15 Lord Gardiner: Perhaps I could turn to the comparability and scrutiny of the options. I think these questions are mainly for Ms Simmonds. When will the design of the EMI option be complete, and will that allow sufficient time for comprehensive scrutiny prior to any debate? I am particularly mindful that this was the late arrival of the options. I just wondered if you could explain that before I move on to another area.
Charlotte Simmonds: Of course. The enhanced maintenance and improvement option was requested to be worked up in March 2024 as part of the strategic case. Strategic Estates, the in-house team, is working that up, and it has made really good progress. It has already worked through the feasibility stage and has provided estimates of costs, schedule, scope, risks and other information. It has been speeded along by benefiting from the DA sharing its design information, which has helped immensely. Obviously, the EMI team will then adapt that information to the specifics of the construction approach of a rolling programme.
Tom and Simon alluded to this, but the Programme Board confirmed last week that it has sufficient information at this stage to undertake a thorough assessment of all three options and provide advice to the Client Board, so we are in a really good place. That has, in the last few months, required a number of alignment and challenge sessions between the options, which has allowed information to be shared across all the options and to take on the good ideas and opportunities from both.
The EMI option will continue to be developed over this year, but the Programme Board is happy that it has sufficient information for comparison of the three options, and sufficient to provide their advice to the Client Board. I should add, however, that at the end of this year, all three options will be at concept design stage. That is commensurate with the stage we are at with the programme and the decision making we are expecting of both Houses. After that decision, as I said earlier, we will move into detailed design. They will all be at concept design stage at the end of this year.
Q16 Lord Gardiner: Rolling on from that, am I right in thinking that you would say that EMI, the third option, will have the same level of maturity by the time you have gone through the process you describe? It is obviously essential that all three options are comparable, so that the decision can be made, as much as it can, on a level playing field for all three options. I am conscious of the level of maturity when we are about to make some very consequential decisions. Can I tease out a bit more on that element of maturity and comparability?
Charlotte Simmonds: It is true to say that they are at different levels of maturity at this stage. They are all being assessed against the same criteria. Enhanced maintenance and improvement will still be somewhat behind the Delivery Authority options, and maybe Russ can clarify that, but they will be sufficient to provide comparison at the end of this year, and the boards are happy that they have sufficient information now to provide their advice.
Q17 Lord Gardiner: I think this is important: when you say that it will not be mature, in what areas do you think there will be this lack of maturity compared with the other two? If it is less mature, how would you decide how sound it is to make decisions thereon?
Charlotte Simmonds: One of the areas that we are still working on with enhanced maintenance and improvement is understanding the decant strategy, which the Delivery Authority is helping with, so we understand what the demand would be from enhanced maintenance and improvement. With House teams, we are working through where those decanted areas would go. In terms of how we manage that and make sure that we have a fair comparison of the options, it is about making sure that enhanced maintenance and improvement sufficiently accounts for risk, contingency and optimism bias within its cost and schedule ranges to allow for that comparison. Russ, do you want to come in?
Russ MacMillan: I think that is quite a comprehensive answer. In reality, a lot of what EMI is working on came from the original DA options. From an engineering perspective, there are certainly some changes on some aspects of the design, but quite significant bits of the design have been moved across, so you can take an awful lot of confidence from that. As Charlotte mentioned, we have just completed a very specific alignment exercise.
We have been through each other’s work, we have assured each other’s work, we have understood where there are differences, and we have confirmed whether those differences are justifiable due to the different concepts involved. Where they have not been justifiable due to the different concepts involved, we have effectively aligned each other, so we are, in answer to your question, very comparable. Once you put the risk adjustments in, you can genuinely look at these options from a level-playing-field perspective.
Q18 Lord Gardiner: Thank you. To the Clerks: we heard about some earlier work in terms of independent assurance, but with work being carried out against the three options, will the reports be made public as part of the consideration prior to any debate?
Simon Burton: We have been following industry best practice and guidance from what is now called the National Industry Service Transformation Authority—previously the Infrastructure and Projects Authority. We have followed its guidance on what independent assurance looks like, in addition to our own assurance within the various delivery teams. For example, we have had independent scrutiny of the three options from Grant Thornton, which has experience of construction, major projects programmes, delivery and business cases.
The DA also has independent expert panels providing advice and challenge on its options. Strategic Estates has been using what it calls red teams, which are independent people to challenge and provide assurance on the EMI option. We have had a separate health and safety and fire assurance panel, which has looked at the three options from a safety perspective. The Clerks—the two of us—have commissioned further independent advice and assurance from the panel, which will report before the summer, and that will feed into the costed proposals. Charlotte, are you able to help us with the question of whether we publish any of these things?
Charlotte Simmonds: The Independent Advice and Assurance Panel report will be published. There is a commitment to publish that. That is the overarching assurance of the whole programme, and it will be published.
Q19 Lord Gardiner: Thinking about assurance, particularly with a building that does unfortunately have a lot of asbestos, I would have thought that is quite a specialist area. Could I have confirmation from the Clerks that this is very much an element of that independent assurance for the options?
Tom Goldsmith: Yes, absolutely. Simon just referenced the independent review of the health and safety aspects of this work, which we were very keen to commission. That was looking at two questions. First, do we really need a programme on the scale of R&R from a health and safety perspective? The answer was clearly yes. Secondly, can each of the three options be delivered safely? The headline conclusion was that they all could in principle, but that they carried different risks. As part of that exercise, we had three external experts undertake that piece of work, and asbestos was absolutely forefront in their minds as one of the key risks that would need to be managed.
Lord Gardiner: I am interested in the wording “in principle.” Obviously that is further down the line, but it is a key point.
Q20 Nick Smith: Ms Simmonds, Mr Goldsmith talked about 217 interactions with MPs and peers. That is 150 MPs and nearly 70 peers, which is good going. But there was much change in the 2024 election, and new peers come forward reasonably regularly. You have also talked about the half-dozen channels or opportunities that you have used to get Members’ interest. Given that we have a hard deadline of next autumn for these important votes, what else are you able to do to increase take-up and interest in your important work?
Charlotte Simmonds: Our normal channels are that we have one-to-one briefings, we have an R&R tour of the Palace, we present to Committees, and we try to have a regular rotation of quite visible engagement activity across both Houses—for the Commons that is normally in Portcullis House, and for the Lords it is in the Royal Gallery. That is our stock offering.
In terms of the tours for the current membership, 193 Members of either House have done the tour—that is 93 MPs and 100 peers. We will continue to progress that. We have had a real focus since the general election and, as you say, we have new Members of the House of Commons, but we also have new Members of the House of Lords. A general election means a lot of new people in one go, and they are trying to get used to the actual building in the first place. However, something that has been really successful is getting the new Programme Board Chair, Judith Cummins—a Deputy Speaker of the House of Commons—and Lord Vaux, the Deputy Chair, to email all Members directly to encourage uptake of engagement. That has been really effective, and we will continue to use such opportunities to make sure that we have Member-to-Member communications to try to increase uptake.
We are very conscious of engagement fatigue. This programme has been going on for quite a long time and we really want to ramp up engagement when we get to the publication of the costed proposals. We will look to use our tried-and-tested methods, which I have just talked you through. We will also look to provide exhibitions that will provide more information about the options. We will try to use innovative methods to bring to life some of the elements, such as disruption. And as I say, we will try to use our board members to engage with Members as well.
I should add that we are also very keen to engage with staff, both Administration staff and Members’ staff, and the uptake of that has also been really good. We have briefed over 1,200 staff and taken over 700 staff on tours—that is Members’ staff and House staff. We will continue to provide that offer, because it is very important that they are also engaged and part of this process.
Q21 Nick Smith: What tools are you using to manage the effectiveness of your contact with people?
Charlotte Simmonds: We try to make sure that we have a spread of engagement across both Houses, across parties and across other attributes, including length of service. We always seek feedback on our formal engagement, both through the tours and the briefings. Broadly, that feedback is positive, and we continue to ask Members, when we have the opportunity, about how positive they are that we will get a decision.
We continue to track those metrics. But if this Commission has any views on how we should improve engagement, we are all ears, because we want to make sure that we ramp up engagement for the costed proposals report, and to make sure that Members are aware of what is happening and informed to make the decision.
Q22 Nick Smith: Have you thought about going back to the people who have already shown interest, given that they have indicated willingness and have been on tours, and so on?
Charlotte Simmonds: We are relentless. If you have shown any engagement in the first place, we will be knocking on your door—absolutely.
Q23 Chair: Ms Simmonds, just for the record, you said that this programme has been going on for quite some time. How long has it been going on for?
Charlotte Simmonds: The Joint Committee on the Palace of Westminster reported in 2016.
Q24 Chair: There we are. Mr Burton, can I follow up on the answer you gave to Lord Gardiner on independent assurance? Why are you not planning to publish the assurance reports that you have commissioned in their entirety?
Simon Burton: We are publishing the ones that we are confident we can publish. The health and safety and fire report we commissioned was shared with the Client Board, but even in that circulation it had a number of references to security. I think I can say on the record that we are very conscious of security. We take advice, of course, from Alison Giles and her team on security, and if you publish what may appear to be five or six innocent bits of information, a bad actor might put them together and be able to draw conclusions. When we have a review of that kind, we are always very careful not to publish anything that would cause difficulties on the security front.
Is there anything that you want to add to that, Tom?
Tom Goldsmith: No. I think that is a fair answer.
Q25 Lord Macpherson: Can I turn to the estimate for the coming year? I am impressed that the overall cost assessment has come down from £515 million to £475 million. I am intrigued by that figure of £475 million, because I think that was the original voted expenditure limit. You have provided lots of bottom-up reasons why the answer is £53 million for the coming year. Was there any top-down consideration in arriving at that figure, which delivers this nice round number of £475 million for phase 1?
Russ MacMillan: That particular judgment predates me. Charlotte, jump in if you can help on that.
In reality, I think that was a coincidence. The £53 million was a genuine bottom-up exercise that sought to strike the right balance between maintaining momentum on the programme and avoiding losing the capability that we have spent a long time building up, but at the same time recognising that we wanted to minimise expenditure before Parliament makes a firm decision to move into phase 2. As you rightly say, it represents a 35% reduction on what we spent last year.
Q26 Lord Macpherson: Interesting. I recognise that with a programme like this, there are quite considerable fixed costs just in keeping the show on the road. I note that in 2025-26, the Delivery Authority’s corporate functions make up 27% of the total budget request, compared with an average of 16% over the course of phase 1. Could you explain the challenges that the Delivery Authority has faced when trying to consolidate the expenditure on corporate functions further?
Russ MacMillan: The first point is that our corporate costs have reduced year on year. We are always looking for efficiencies. We are £4 million down in this budget compared with the last budget. In terms of the percentage calculation you have put forward, part of the reason that the percentage has gone up is that some of our project work has drawn to a close. It is now awaiting costed proposals and the decision-making part of the programme, so it is only natural that the overhead part of the programme goes up in size.
In terms of what comprises that 27%, it is worth saying that a significant proportion of the cost relates to our commercial activity. Around half of the cost relates to our commercial teams getting ready for a major procurement exercise, which is the first thing we would do if Parliament decided to proceed into phase 2. Another significant part of that cost is in relation to the rent, effectively, that we pay Parliament for use of part of the parliamentary estate. That is another couple of million. Within what is left, we have done quite a lot of work to bear down on those costs and deliver some quite significant efficiencies.
Q27 Lord Macpherson: Could you explain why surveys are continuing into 2025-26, when designs have now been completed? Can you confirm that the surveys will be of use regardless of which option is selected?
Russ MacMillan: The first thing to say is that designs have been completed to a certain level of maturity, and this really takes us back to Charlotte’s answer earlier. We have reached a relatively early concept phase of design. I think all the learning from major programmes tells you that you can never know enough about the building or the project that you are working on, so there will undoubtedly be a continuing need for surveys as the programme progresses, and that is a very significant part of our risk mitigation strategy.
In terms of the surveys that we have chosen to do pre-decision and post-decision, we have tried to make a pragmatic decision about the really critical ones to get a rough cost and schedule envelope available to decision makers. Clearly, once decision makers decide exactly which option they want to go with, then particularly our new partners would look to do quite a lot of additional survey work. In terms of your other question about whether the results of those surveys will be of use to all options, the simple answer is yes.
Q28 Lord Macpherson: Just to be clear, once the decision has been made on which option to pursue, there will inevitably be more surveys in relation to that particular project, but in determining when the surveys take place, for the moment you are focusing on ones that are of general use?
Russ MacMillan: Yes. For example, the big priority this year is the river and the river terrace, because common and early to all the programmes is the need for a river jetty and a logistics capability.
Q29 Lord Macpherson: Good. Coming back to Strategic Estates, as they develop the EMI option, are your resources being made available to Strategic Estates?
Russ MacMillan: Absolutely. We are working very collaboratively together. I think I talked a little about the alignment work we had done. Actually, that is of much benefit to us as it is in the other direction, in that it is actually a really good way of assuring our own work, looking at new ideas and thinking about how we could do things differently, so there is a very collaborative and two-way process between the two teams to make sure that we can each put the best proposition forward that we can manage.
Q30 Lord Macpherson: Presumably, at the margin, there must be some debate about whose budget the particular activity is scored against, between the Delivery Authority and Strategic Estates.
Russ MacMillan: It is not a debate that I have particularly come across. I think, in many senses, it is a relatively straightforward attribution of the DA costs, through the grant that we are talking about today, and Strategic Estates, through the normal in-house budgeting process.
Q31 Lord Gardiner: In 2023-24, there was a significant write-off of almost £700,000 of survey equipment that was no longer needed. There was this large purchase in 2022-23 at a comparatively early stage of the programme, so I wondered what the explanation for that was. Why was that large purchase made in one year and then written off the next? Indeed, if that particular equipment is no longer what is required, has there been any progress as to the disposing of it?
Russ MacMillan: A decision was made in early 2022 to procure some equipment to monitor ground movement, effectively, and that is the £700,000 piece of equipment that you refer to. That was a rational thing to do at the time, based on the programme as we understood it, but, as you are aware, the programme then went through a big reset in 2022 that effectively moved the start of main works backwards. The particular output of this survey has a validity period associated with it, so it would not then—at the point that the programme had been reset, moving the main works backwards—have been rational to continue with that survey, so we ended up with a piece of survey equipment on our hands that we no longer needed against the new reset programme.
We have disposed of that equipment. We managed to resell it. In doing that, we made the loss that we are talking about today. We resold it for £50,000, and that generates the loss that we have talked about. The predominant reason for the drop in value of the equipment was the fact that it had moved outside of warranty, and therefore had a relatively limited second-hand resale value, resulting in the write-off. Clearly, with the benefit of hindsight, knowing the programme that we know now, we would not have purchased the equipment when we purchased it, but, prior to the programme reset, I think it was a rational thing to do.
Q32 Lord Gardiner: There is obviously a background to this, but, in terms of needing information on movement and so forth, I am not quite sure why the reset had that effect. You would want that information, presumably about the conditions of the land and so forth, at some point, so I am not quite sure why the reset meant that, in effect, the result of that survey work was not of any benefit, or whatever.
I am somewhat troubled, obviously, that the equipment was £700,000, and now it has been sold for £50,000. What is more the equipment does not appear from your description to have been particularly valued overall, because of the reset. I am somewhat confused as to why the reset would mean that the £700,000-worth of survey equipment was no longer required, when we place great store on surveys to provide us with a lot of information, and on the Palace being very well surveyed. I am still not quite understanding why we were in the position of spending that sum of money, and then it was no longer needed.
Russ MacMillan: If you would like more detail on the specific technical aspects of the survey, we can certainly write and follow up on that. My broad understanding is that you instrument-up the building, and you monitor the way in which the ground moves over time, and that the results of such an experiment have a relatively time-limited utility. So, at the point the programme was reset and the start of the programme moved backwards, there was no longer any basis on which we should have been doing that survey work in 2022. It is at that point that we decided that we should move ahead and sell the equipment. But certainly, in terms of the technical aspects of the survey, I would be very happy to follow up with more detail.
Q33 Lord Gardiner: Obviously, as I read it, we are talking about a year. It was purchased in 2022-23 and written off in 2023-24. It is a very short warranty—why not lease it? If there are lessons learnt from this, and if there is this sort of equipment—I am pretty surprised it has such a short warranty for it to be out of warranty when it was sold—why would we not be thinking of leasing equipment like this?
Russ MacMillan: That is certainly something we are looking at for the future. At the time, the judgment was made to procure the equipment as it was a more cost-effective solution to purchase than to lease it. That was based on the certainty of the programme we had at the time.
I think we would all recognise now that the programme will evolve and change. One way of dealing with those uncertainties—absolutely, as you say—is to lease, and that is something that will be front of mind when we look at those types of purchases or procurements in the future.
Lord Gardiner: Thank you. I still think it is an example of some lessons learnt, if we have equipment that is of such a short lifespan, it would be quite interesting to know what it would have cost had we leased it. I find it difficult to believe that it would have involved £650,000, but there we are. Thank you.
Q34 Chair: We will continue the value for money theme. Mr MacMillan, I think you can see from all our reactions that we are very disturbed by the transaction that led to a £650,000 loss. You kept prefacing that by saying it was a rational or sensible thing to acquire in the first place. That is troubling to us, because this is a stand-alone item for a stand-alone job. If those decisions cannot be made in a healthy fashion, it throws into doubt the complexity of the overall project. It is remarkable that we are using the language “lessons learnt.” I am leaning towards Lord MacPherson’s view—I am not sure there would be such subtle language if this were a corporate environment. To be unable to procure a piece of equipment that was not going to go out of date, or that would not be useful to the project—and then not to sell it within the warranty—is quite difficult.
Russ MacMillan: I agree. With the benefit of hindsight, we would have made different decisions. We will absolutely look to lease equipment where it is appropriate to do so in the future. We will absolutely think very carefully as we make those types of decisions moving forward.
Q35 Chair: Going with bigger sums now, has £475 million represented value for money for the taxpayer?
Russ MacMillan: The £475 million the programme has spent has generated a lot of value, predominantly in the designs and schemes now available for decision makers to make a decision around. As we have touched on quite a lot, we have done an extensive programme of surveying work, which has significantly improved our understanding of the Palace. That is obviously a significant derisking activity as we look ahead to the programme and how we deliver it.
We have done a significant amount of work around temporary accommodation—in particular, the work by the Delivery Authority around the Queen Elizabeth II Conference Centre. We are focused on getting ready for the major procurements we will run next year.
We have always been very focused on value for money. Again, knowing what we know now about the way the programme has evolved, we might have made different decisions at the time. But looking back, I think that the decisions made prior to the programme reset were sensible and rational, and the programme has continued to progress irrespective of that reset.
Q36 Chair: So you are confident it represents value for money, but you then mentioned issues around hindsight. What could you have done or what would you have wanted to do differently, had you had the benefit of hindsight?
Russ MacMillan: If we had known how the programme would develop, we might have slowed the rate at which the Delivery Authority scaled itself in preparation for the programme. One of the things we did through the organisational review was to take a step back and look at the functions we really needed to procure within a stand-alone delivery organisation, and those we could rely on others for. I think there are a couple of lessons that we have learnt, but those lessons were predominantly acted on through the organisational review, which, as we heard earlier, have generated savings of 35% as we move into this year.
Q37 Chair: Is there anything else you want to put on the record that, with hindsight, you may have done differently?
Russ MacMillan: I don’t think so—unless colleagues want to add anything.
Q38 Chair: The addition of a third option has extended phase 1. To what extent, if any, has this caused extra expenditure for the DA, and can you value the cost of this delay?
Russ MacMillan: In terms of the effect of the reset on the Delivery Authority’s activity, it was more about the reset itself and the time effect of the reset, as opposed to the injection of a third option per se. We should not lose sight of the fact that the reset was done for all the right reasons: because the programme needed to take a step back and realign itself with customer expectations. While on the one hand the reset has generated more cost into phase 1, that was with the net benefit of revisiting the programme overall and focusing on getting it to the best place possible, aligned with what our customers want.
The honest answer is that it is very difficult to be precise about how you would value that delay. What I can say is that, prior to the programme reset, the DA was predicting that the phase 1 aspect of the programme would cost £350 million. Obviously, sat here today, we are predicting that it will cost £475 million. There is not a clear logical link between those two things, but that gives you some sense of the size and the scale of how the programme has evolved over time.
Q39 Nick Smith: I am looking at this issue of surveys, and cost and value. I understand that a relatively small amount of money has been spent on surveys. Does that mean that they have not been given enough importance? One of the diagrams here shows that we spent £50 million—about 11% of the overall cost—on surveys. Have we got that right, do you think, Mr MacMillan?
Russ MacMillan: This goes back to my earlier comment that we have tried to make a pragmatic decision about what it is rational to do, pre a parliamentary decision to move into phase 2, and what it would be rational to wait for. There is a lot more surveying that we would like to do, but I think that sits better once Parliament has decided exactly which option it wants to proceed with, and would be part of the discovery exercise that we would do once we have our new delivery partners on board, through the procurement process that I talked about earlier. We absolutely have an aspiration to do a lot more surveying; it is just not necessarily the type of work that be appropriate this side of a parliamentary decision.
Q40 Nick Smith: More than £100 million has been spent on data and digital during phase 1. Do you think the data and digital infrastructure could be utilised regardless of the option that’s selected? Do you think the DA pitched its data and digital strategy at the right level?
Russ MacMillan: We recognise that data and digital costs have been high. We have done a lot of work to reduce spend in that area, and we have reduced spend by two thirds in the last four years. Some of those costs were set up-related costs that would not recur, but what we have done with the spend is effectively bring to bear industry best practice systems—including, for example, a building information model, which would be of use to any of the options on the table—and we have tended to use standard, off-the-shelf products that any new set of contractors coming in would be able to take and use, and gain value from.
Q41 Chair: I am going to touch on the role of accounting officers. Mr Goldsmith and Mr Burton, you are both accounting officers. Just for the record, when we say “accounting officers”, is that the same as in the outside world, so that you carry the same responsibilities and the same liability?
Simon Burton: Yes.
Tom Goldsmith: Yes, in terms of a permanent secretary, for example, in a Government Department.
Q42 Chair: Things are very different in this place; I wanted to make sure that everybody understood that you have the same responsibilities and the same burdens.
You are both responsible for ensuring that funds allocated to the programme are used efficiently and effectively. What are your personal reflections on the half a billion pounds that will have been spent on the programme during phase 1?
Simon Burton: As Russ has already said, a lot of good work has been done to set things up—to do the surveys and build the building information model. A lot of work has been done on temporary accommodation, particularly for the Lords. The work on QEII is advanced to such an extent that our Commission has been able to look at quite detailed proposals for what we will do with QEII if we end up there. And, of course, there has been a lot of work on procurement. Don’t forget that a lot of the money went to the initial costs of setting up the Delivery Authority. It might have been you, Russ, who said to me the other day that one of the lessons learned from big infrastructure projects generally is that money spent early, if it is spent well, as I think it has been, can deliver benefits. If you try to pare costs too much in the very early stages, you regret it later on. I am confident that the money has represented value for money to date. It has got us to where we are. If that allows the Houses to take the decisions this year, that will be money well spent.
Q43 Chair: Not if you spend money too early on a £700,000 piece of equipment that cannot be used.
Simon Burton: That was a particular case, which I think Russ has given an answer to. Obviously, as Russ said, things could have been done differently. That was a particular issue and a particular problem that we accept and recognise.
Tom Goldsmith: I agree with everything that Simon just said. I take assurance from the fact that there has been quite a lot of scrutiny of the budget, not just by us but by others, including this Committee. The Treasury has consistently described the budgets as taut and realistic.
There are lessons to be learnt. Russ talked about the timescale in which the DA was scaled up. On a more operational level, you rightly asked about the write-off for that piece of equipment. One thing I would reflect on is that those questions are entirely valid. In your situation I would be asking exactly the same questions. You referred, Chair, to how that would look in a corporate or commercial world, which is a very fair question. I think those costs we incurred were particularly driven by a political reset. This is an unusual environment in which decisions do not always stick in quite the way they do in other places. I think the reset was the right thing to do. I just make the point that that has an impact on how we work. Putting aside the politics and reflecting on the fact that this is a working legislature, there are costs associated with that in terms of when you can do work, which you will understand.
Q44 Chair: Absolutely. This is a peculiar working environment, where decisions are taken in one place but they can be challenged in another place. What would you consider changing for phase 2 of the programme, to ensure value for money is maximised? I will come to you first, Mr Burton.
Simon Burton: In phase 2, it will largely depend on which option is chosen. It will be a very different world, depending on which option is chosen. I would say the first thing to do is to understand where we are going to go. One of the biggest questions around that would be who is actually going to do the work in phase 2. The Delivery Authority has been busy preparing to do the work for options 1 and 2. Strategic Estates has been preparing option 3. But who, what skills, and what cost and size of organisation we will need to actually do the work will depend on which option is chosen. That will be the biggest decision that we will need to take quickly to make sure the delivery mechanism is the right one for the option and is value for money. That would be my top priority.
Tom Goldsmith: I do not have anything to add.
Q45 Chair: Under a continuing presence or EMI option, how would you balance the conflicting responsibilities of maintaining health and safety standards with the need to deliver R&R efficiently? Mr Goldsmith?
Tom Goldsmith: Health and safety will remain our top priority. It is the non-negotiable bit of all of this. We have said in the past, and my predecessor also said in the past, that we could not support an option that carried an extraordinary level of unmitigated risk. Any work of the size we are contemplating carries health and safety risks. That is why we were particularly keen at this stage to get that independent assurance piece of work done by experts. As I mentioned, that has said that in principle all three options could be delivered safely, but it flags up that there are real risks to be managed. It says that if you were looking at this only from a health and safety perspective, the full decant would be the safest option. Clearly, there are all sorts of factors to weigh up, but that is the judgment that those experts came to.
If we go for any of the options, at the top of our list of questions to ask those responsible for delivering it will be, “How will you keep the place safe, and how will you keep our people safe, when you deliver this programme?” That is something that I am sure we will continue to need external assurance on. It remains a top priority.
Q46 Chair: Mr Burton, are you also of the view that a full decant is the safest option?
Simon Burton: Instinctively, that feels the case because everybody will be away, apart from the people who are actually doing the work. Safety will be one of the top factors that will be presented—compared—in the costed proposals. There will be others: cost, time, disruption to parliamentary business, outcome. They will all have to be weighed, but safety will be fairly and impartially assessed for each of the three options. The weighting of how it comes out will be for the costed proposals, but you will get that information.
Q47 Chair: A final question from me. If disruption becomes greater than originally envisaged, what will be prioritised? Mr Goldsmith and Mr Burton, pretend it is just us in the room. Will it be the business of the House or the progress of the programme? Let’s be honest now.
Tom Goldsmith: Safety will always be the absolute top priority, but we are here to facilitate a Parliament. Of course, it depends on the exact scenario, and it is quite difficult to talk in the abstract because in reality we would be weighing up lots of different factors, but if disruption was such that people could not bear it—well, I hope we do not get to that situation. One of the things that we are trying weigh up now, and the Programme Board is trying to weigh up, and the Client Board will try to weigh up, is whether these options can be delivered with a level of disruption that we can live with. If we get to the point where that is not the case, it really depends on the exact circumstance: what the cost would be of stopping work and pausing it, against the parliamentary activity that has to carry on.
To give you an example of where I am coming from, I said to the whole organisation when I became Clerk that one of the priorities is to have a sharper focus on making sure that everything that we do here is about supporting the Chamber, Committees and Members. That is why we are all here, ultimately. I am in this job, and I have been working here for 28 years, because I want to support Parliament and make sure that it can function. If it cannot function because of levels of disruption, we need to look at that and do something about it.
Chair: Diplomatic, but I am seeing business of the House there as a priority.
Simon Burton: As I said to the Public Accounts Committee when we first went there, we wear a number of hats. We are both accounting officers, as you have said. We are both chief procedural advisers to our House, supporting the business of our House and our Members. We are also corporate officers with statutory duties for health and safety, and it is in that capacity that the statutory duty to get R&R done has been added to our jobs.
The reset was talked about. Prior to that, the sponsor body had the statutory duty to get this done. That is now on our shoulders. As corporate officers, we have both the health and safety responsibility and a responsibility to deliver this. There is a subtle difference between Tom and myself in that colleagues in the Commons are employed by the Commission, whereas people in the Lords are employed by me, so I am the employer. As corporate officer, I have a particular personal responsibility to all my colleagues.
These things are constantly in tension in our heads, and we are balancing them all up. As Tom says, it would very much depend on the circumstances, but certainly in our House—I cannot speak for the Commons—there are many Members who absolutely prioritise health and safety. Many Members of the House of Lords have worked in industry, trade unions, universities or schools, or construction, and they have health and safety in their DNA. They want the place to be safe, obviously for themselves but also, more importantly, for the staff and the people who come. Safety consciousness is not just in our mind; it is broader in the parliamentary community.
Tom Goldsmith: If I could just add one small point to my earlier answer, I agree absolutely with everything Simon just said: when we run projects and programmes here at the moment, which are obviously not of the same scale as R&R will be, but are pretty significant, some budget for risk and contingency is routine. That will partly be about, for example, if one or both Houses were recalled, which could disrupt a programme of work, or if, for other reasons to do with parliamentary business, works might need to be paused or done in a different way. On a smaller scale, we are used to managing that already. I am sure Charlotte or Russ can say more about this, but the detailed budgets for R&R will have an element of that within them.
Q48 Lord Gardiner: Just thinking about this dilemma, am I right in recalling that in Canada there was a desire to remain within the Parliament and then, somewhere down the line, it became apparent that they could not? I am not sure whether it was disruption and safety concerns, but in the contingencies—looking particularly at the two Clerks—I am sure you have the experience of Canada very much in the thought process because of the contingency of their experience.
Simon Burton: Charlotte, have you done some comparative study of different Parliaments?
Charlotte Simmonds: Yes. We are part of the International Network of Parliamentary Properties, which is largely made up of Parliaments undertaking refurbishment works. Canada is obviously one of the main players and are progressing their programme very well. Their buildings were the centre block, which housed the Chambers, and two separate buildings to the side. The Commons moved to one side and the Lords—sorry, but I can’t remember what they are called in Canada—intended to move to the other, but in the eventuality the Lords equivalent moved further down the road to a different facility. I believe that was because of the disruption, but we can provide a note; we have extensive engagement, as does the Delivery Authority, with our Canadian counterparts. We can provide information on that if it is helpful.
Chair: That would be helpful, if we could have that in writing. Lord Gardiner, do you have any further questions?
Lord Gardiner: No, thank you very much.
Q49 Chair: Ms Simmonds, was there anything else you wished to put on the record?
Charlotte Simmonds: I just wanted to reiterate that one of the key findings of the House safety and fire report is the confirmation that, because of the risks facing the Palace, we need to do a works programme of the scale of R&R, and the urgency of a decision. We are really committed to sticking to the timetable that the Clerks discussed.
Q50 Chair: A tight timetable, and the urgency of a decision. Mr Goldsmith, anything else for the record?
Tom Goldsmith: No, thank you.
Chair: Mr Burton?
Simon Burton: I would like to emphasise something that Tom said when we talked about value for money. So far, it is the consistent finding that the expenditure has been taut and realistic; that, I think, is an assurance to us both as accounting officers.
Chair: Reflecting the language in the Treasury letter. Marvellous. Mr MacMillan?
Russ MacMillan: No, thank you.
Chair: Thank you so much for coming. The Estimates Commission will now deliberate in private.