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Last Updated: Thursday, 5 February, 2004, 18:33 GMT
Mandarin denies Holyrood 'misled'
Holyrood parliament site
Changing requirements drove up costs
The former head of the Scottish civil service has denied ministers were misled about the true cost of the new Holyrood parliament building.

Sir Muir Russell has been giving evidence to the Fraser Inquiry into the spiralling costs of the project.

He led the Scottish civil service when responsibility for the building was handed over to MSPs in 1999.

At that time the construction cost was put at 62m - even though consultants were warning it was actually 89m.

The Secretary of State for Scotland at the time, Donald Dewar, was given the lower figure which he reported to MSPs in a crucial debate.

Within weeks the civil service said that the consultants' advice had, in Sir Muir's words, "a high degree of accuracy".

Removed the figures

Lord Fraser of Carmyllie, who is heading the inquiry, said that Sir Muir had ignored costs associated with risk when he estimated the price tag in mid 1999.

He said that the civil service's own cost consultants had estimated the amount of money needed for risk at about 15m, but the civil servants running the project simply removed the figures.

The issue is important because the former Scottish Office handed the Holyrood project over to the newly elected Scottish Parliament in July 1999 at a time when many MSPs were concerned about the cost.

Lord Fraser noted that cost consultants, Davis, Langdon and Everest (DLE), estimated the cost of the project at 89m in May 1999, with 15.86 million for risk.

However, the civil service told Mr Dewar in the same month that the building would cost only 62m with 6m for contingency.

There would be a lot of different numbers around about what may or may not be the final cost and for the team to continuously report these would have been, let's call it, a distraction.
Sir Muir Russell

During his evidence, Sir Muir gave a robust defence of his role in the project and the performance of his civil servants from the May 1997 Labour election victory through to the handing over of the project in July 1999, when he ceased to have any responsibility for it.

But he was challenged by John Campbell, QC, counsel for the inquiry over why cost estimates from DLE were not passed on to Mr Dewar given that they were consistently higher than the official figures.

Sir Muir said: "There would be a lot of different numbers around about what may or may not be the final cost and for the team to continuously report these would have been, let's call it, a distraction."

And he insisted that many of the cost warnings presented by DLE were dealt with by the civil service project team by removing the proposals from the project.

'Re-brand Britain'

The inquiry also heard from David Black, an architecture journalist and critic of the project.

He made a number of claims including a suggestion that former Westminster minister Peter Mandleson was directly involved in decisions over the location of the Holyrood building as part of a project to "re-brand Britain".

He also claimed that he was approached by an unnamed and "significant" civil servant in late 1997 who told him that Holyrood was in the running before the official announcement had been named.

Mr Black said he had forgotten the name of the man who warned that moving to Holyrood would lead to cost rises which in turn would "damage" the civil service and the Government in Scotland.

BBC Scotland's Reevel Alderson
"Sir Muir Russell has been giving evidence to the Fraser Inquiry"

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