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Last Updated: Tuesday, 4 May, 2004, 11:52 GMT 12:52 UK
Holyrood Inquiry - Part 3
Lord Fraser

As part of BBC Scotland's coverage of the Holyrood Inquiry, News Online looks back at the evidence given to Lord Fraser.

The third of our four-part series examines the period when MSPs took control of the Scottish Parliament project and confusion over the rising price tag.

DAY 19 - Tuesday, 3 February

When the inquiry resumed after a six-week break, it was told about a disagreement between the architects who designed the new building.

Scottish Executive Chief Architect Dr John Gibbons said that the two firms involved, Spanish-based RMJM and Edinburgh firm EMBT, were not working well together.

He said that lifestyle differences in Edinburgh and Barcelona had led to communication difficulties.

Dr John Gibbons
Dr John Gibbons said the architects were not working well together
Dr Gibbons said he had to mediate in a row over money when Catalan architect Enric Miralles asked for a bigger share of the design fee.

The inquiry also heard from the former private secretary to the late First Minister Donald Dewar who said that Mr Dewar was torn between two potential sites.

When asked if Mr Dewar had struck a private deal to choose Holyrood as the preferred site, Kenneth Thomson said that if he had done, he had gone out of his way to disguise it.

DAY 20 - Wednesday, 4 February

Former Presiding Officer Sir David Steel told the inquiry that when the Scottish Parliament Corporate Body (SPCB) took control of the project, the price stood at 109m.

He said the subsequent rise in costs could be attributed to the SPCB's decisions, the influence of outside bodies and the impact of arrangements inherited from the former Scottish Office.

Referring to a private conversation with Mr Dewar, Sir David said he had asked Mr Dewar about the possibility of using Calton Hill as the site for the new parliament.

The former presiding officer used some of his time giving evidence to respond to criticism from former Scotland Office Minister Sam Galbraith and MSP Fergus Ewing.

Sir David said: "I recall his response clearly. He said 'Don't you think David that a new Scottish Parliament after 300 years deserves a new building and not a jumble of old ones?'"

Sir David Steel
Sir David recalled a conversation with Donald Dewar
Mr Galbraith had previously told the inquiry that the price of the project would escalate when it was handed over "to this immature parliament".

Sir David said: "If Fergus Ewing had been a humble seeker after truth rather than a reckless seeker after headlines he would have written to me to raise his questions."

He also responded to criticism from Scottish National Party MSP Fergus Ewing who said Sir David misled parliament on the potential consequences of scrapping the project.

DAY 21 - Thursday, 5 February

The former head of the Scottish civil service, Sir Muir Russell, denied ministers were misled about the true cost of the project.

Sir Muir 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.

Lord Fraser 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 15.86m for risk.

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

Sir Muir defended himself saying: "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. "

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 Mandelson was directly involved in decisions over the location of the Holyrood building as part of a project to "re-brand Britain".

DAY 22 - Tuesday, 10 February

Parliamentary chief executive Paul Grice told the inquiry about a memo he was sent from project director Barbara Doig.

The memo said that Ms Doig did not think the parliament's management committee was handling the project.

Mr Grice also revealed he was not shown warnings that the parliament's costs were higher than official estimates.

He said he had to rely on his directors, including Ms Doig, when responsibility for the scheme passed from the former Scottish Office to the Scottish Parliament in June 1999.

Paul Grice
Paul Grice: Aware of tensions
Mr Grice told the inquiry: "I was aware that there was tension on both sides - Barbara Doig and the SPCB."

During his evidence, Mr Grice also warned that the cost of the building at the bottom of the Royal Mile could keep rising even after it is finished.

"Until the final claim is settled you won't know the final cost of the building," he said.

He explained how the cost went through the 109m barrier.

Mr Grice said he decided not to tell the Scottish Parliament's Corporate Body (SPCB) of the increases - because he did not have confidence in the cost accountants' figures.

DAY 23 - Wednesday, 11 February

Three MSPs on the Holyrood management committee said they were kept in the dark for months over the rising cost of the project.

They blamed project director Barbara Doig, who had previously told the inquiry that she thought they were not up to the job.

Scottish National Party MSP Andrew Welsh, Lib Dem Robert Brown and Tory John Young rejected her claims.

Mr Welsh described the accusation by senior civil servant Ms Doig that they were "thick" as totally untrue, inaccurate and unfair and he called on her to withdraw it.

He added that MSPs had inherited a series of "time bombs" along with the Holyrood site and he insisted that the parliament's corporate body had to cope with the decisions taken prior to devolution.

Lord Fraser suggested to Mr Young that there had been "pussy footing around" the issue of the relationship with Ms Doig.

Mr Young said: "I think there was a degree of histrionics, or something like that going on."

He also told Lord Fraser that he had been "astonished" by recent revelations that costs had been withheld from corporate body members.

Mr Brown also agreed that their relationship with Ms Doig was "strained".

DAY 24 - Thursday, 12 February

Senior civil servant Martin Mustard, who was involved in the early stages of the project, wanted to see the architects sacked.

A memo from Mr Mustard, which was shown to the inquiry, said that architect firms EMBT and RMJM were courting MSPs directly and effectively bypassing him.

He said if it were possible, he would have torn up the contract.

The memo, dated 29 August, 1999, was sent to project sponsor Barbara Doig , who was giving evidence to the inquiry on Day 24.

Mr Mustard said that at the very least, the project team should "get tough on fees" and halt the project until the total cost and a final completion date could be agreed.

Barbara Doig
Barbara Doig received a memo urging sackings
The inquiry heard that when control of the project was handed to the parliament from the Scottish Office in 1999, cost consultants Davis, Langdon and Everest (DLE) put the building cost at 89.2m.

But in her first report to the SPCB, Ms Doig put the cost at 62m.

She said the DLE figure had included 27m worth of potential risk costs which other members of her team were confident could be "managed out".

Lord Fraser said to Ms Doig: "I have difficulty understanding why you continued to pay DLE when you considered there were other people in the project team sufficiently skilled to say you could manage this out."

She replied: "The cost consultants are professional advisers and play a vital part in all to do with the building.

"But the client side must decide what is the best estimate of actual costs which will be incurred."

DAY 25 - Tuesday 17 February

Scotland was not up to the job of building a new parliament because it lacked the necessary talent and skills, the inquiry was told.

John Spencely, who delivered a crucial report into the controversial building, insisted that the team behind the project were "dysfunctional."

He said that the project sponsor, Barbara Doig, failed to grasp "Noddy management-speak".

The senior architect also insisted that his March 2000 report had been largely ignored since then and the subsequent delays and cost increases were therefore "not surprising".

Paul Curran
Paul Curran was faced with a last-minute design change
Mr Spencely also said that project manager Martin Mustard understood what was happening "better than anyone" but he lacked any authority to make decisions about budgets or sackings.

And he accused the former Scottish Office of arrogance in planning a new Scottish Parliament building before the election of MSPs.

The inquiry also heard from Paul Curran, a project manager who came onto the project team in January 1999 to work for Mr Mustard.

He said the first three months of his work were wasted when he was presented with a completely new design by Mr Miralles and RMJM just three days before a presentation to the then Scottish Secretary Mr Dewar.

Mr Curran also revealed that Ms Doig told Mr Mustard and his team not to go to the design meetings with Mr Miralles and RMJM, thus robbing them of crucial information.

Counsel for the inquiry, John Campbell QC, described it as a "chicken and egg situation" involving a client with changing demands and an architect with changing plans.

Day 26 - Wednesday, 18 February

The inquiry heard that the final price tag could be 19m higher than what was the current 401m estimate.

Hugh Fisher, from cost consultants DLE, told the inquiry he provided a 411m estimate, rising to 420m, last August.

Holyrood 2004
The inquiry was told that the cost could increase further
DLE informed civil servants in May 1999 that the construction cost for the project was 89m, which included a large allowance for risk.

But the project team of civil servants told Mr Dewar that the construction cost was just 62m.

Mr Fisher told the inquiry that the 27m difference between the two figures was mostly for risk and all but 175,000 of it had since materialised.

Mr Campbell asked why millions of pounds for risk included by DLE were removed by civil servants before estimates were offered to Mr Dewar.

Mr Fisher said: "My understanding was that the client's aspiration was that the prices could be managed in such a pro-active way that the threats covered by these items would be excluded."

Mr Campbell said: "Managed out was the term. But was there a rational basis for excluding the 27m of risk allowance at the time?"

Mr Fisher replied: "Not in our view."

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