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Sun, 31 May 2020

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The challenges faced by the R&R are significant. If it is to be a success, the risks must be addressed now

The challenges faced by the R&R are significant. If it is to be a success, the risks must be addressed now

The challenges faced by the Restoration and Renewal programme are significant, Gareth Davies writes

Gareth Davies | National Audit Office

4 min read

The National Audit Office has demonstrated time and time again how the failings of major projects can be traced to problems baked in at their early stages. Parliament must not make the same mistakes with the Restoration and Renewal

When Parliament passed the Parliamentary Buildings (Restoration and Renewal) Bill in the autumn of 2019, it marked the beginning of a new chapter for the Victorian Palace. After many years of debate and discussion, the decision of both Houses to legislate for a Sponsor Body to commission works to deal with the structure’s asbestos, crumbling stonework and the largely unknown contents of the labyrinthine basement, marked the beginning of a programme unique in its scope.

The first task of the arm’s-length Sponsor Body will be to prepare the business case for the programme, currently expected by autumn 2021. However, Parliament is the ultimate decision-maker, and it is Parliament who will ultimately be held responsible for the programme.

The Palace covers eight acres and includes more than 1,100 rooms, 100 staircases, more than three miles of passageways and extensive basements. Hidden voids, originally intended to provide air circulation, whilst failing in their advertised purpose have instead had the effect of introducing a further fire risk, allowing a potential blaze to spread throughout the Palace. Mechanical and electrical systems – some of them dating back to the mid-nineteenth century – have been neglected and around 50 percent of these are estimated to be at a high risk of failure by 2025. Asbestos, used in the renovations following the World War Two bombings, needs to be identified and removed from more than 1,000 locations.

In addition, for the project to succeed, the renovation of the Northern Estates – the Norman Shaw Buildings, Parliament Street and Richmond House, where the Chamber is expected to relocate to during the works – need to be completed on time. These interdependencies, including the relocation of the archives, will all have an impact on when the renovation work in the Palace can start. Even now in the early stages, seemingly small decisions which frustrate the sequence and timing of the ultimate decant will delay the completion of the project and add cost.

Our value for money work at the National Audit Office has demonstrated time and time again how the failings of major projects can be traced to problems baked in at their early stages. In publishing “Palace of Westminster Restoration and Renewal Programme” we have taken the opportunity to report to Parliament our early view on the most important risks to value for money associated with the Programme, and how these should be addressed from the outset.

Parliament has opted for a 2012 Olympic-style model. It established a Sponsor Body which would consolidate the views of Parliament and be responsible for the Programme. It is crucial, therefore, that the Sponsor Body should finalise its strategy for engaging with Parliament to ensure Parliament is kept informed. Equally, Parliament should also put in place robust structures to agree, with the Sponsor Body, a clear and shared understanding of what the Programme will deliver. Without this clear delineation, the risk of delay and cost escalation increases.

Many other large projects have demonstrated the importance of the proper management of risk and uncertainty. Despite the familiarity of a building so central to British public life, the detailed condition of the Palace will only be known once full-scale engineering investigations can be undertaken in the early phases of the programme. This has been vividly demonstrated by the current renovation of the Elizabeth Tower, where the full extent of bomb and other damage was only known once the work was well underway. This means that it is not possible to accurately estimate how long the restoration work might take or what it might cost.

In industries used to the challenge of managing uncertainty in the delivery of major projects, such as oil exploration, the problem of incomplete information is handled by the use of range estimates for cost and completion date. As information and therefore understanding of project conditions improves, these ranges can be narrowed. Our report recommends a similar approach to support a realistic assessment of affordability and timetable.

The challenges faced by this programme are significant, and for it to be a success the risks associated with complex major infrastructure programmes must be addressed now. Clear objectives need to be established to mitigate against the programme’s scope expanding exponentially and unnecessarily and strong governance arrangements are needed to manage changes to that scope.

For our part, the NAO will continue report to Parliament at all key stages of the programme to track how well the risks to value for money and delivery are being managed, and to recommend corrective action where it is needed.

Gareth Davies is Head of the National Audit Office

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