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Last Updated: Tuesday, 29 June, 2004, 11:46 GMT 12:46 UK
Watchdog hits out over Holyrood
Holyrood building
The cost of the project escalated
Scotland's auditor general has heavily criticised the handling of the Holyrood building project.

Robert Black said the wrong type of contract was chosen and project managers failed to operate proper controls.

He also said risk management was poor and that there was little incentive for contractors to trim costs.

Mr Black's report to MSPs accompanies Lord Fraser's wider inquiry into why costs rose to more than 430m.

In his report to the Scottish Parliament's Audit Committee, Mr Black said leadership and control of the project by civil servants was not clearly established.

He said: "Normally leadership and control should reside with the project director (sometimes called the project sponsor) who is a key member of project management.

The main reasons for construction cost increases after 2000 were design development and delay in the construction process
Robert BlackAuditor General
"The client (the Scottish Parliament's Corporate Body) gives the project director the responsibility for making the project happen. In the Holyrood project there was no single point of leadership and control."

On the issue of consultants' costs, Mr Black said he did not seek to investigate whether any single contractor was at fault.

He said: "The project management is responsible for managing its consultants and controlling and assessing their performance.

"The project management should have done more to address the root causes of the problems, which were adversely affecting the cost and programme.

"The main reasons for construction cost increases after 2000 were design development and delay in the construction process."

The Auditor General's report
Robert Black

The auditor general said managers should have made sufficient allowance for the cost of design development and then managed the risk, but that development drove the cost up.

"For this project, design development became a process of costing a developing design rather than developing the design within a cost limit," he said.

He questioned the decision to build under a construction management scheme, which was "at the heart of the problems that arose.

This allowed work to get under way quickly without a fixed design and with the taxpayer footing the bill.

Mr Black cited an "unusually low" number of tenders for 20 major contracts of work which represented 56% of the estimated construction cost.

High quality building

There was also "significant uncertainty" contained with 11 of those 20 contracts.

Mr Black said that taxpayers would get a high quality building, but added: "The same quality could have been achieved for less if the whole design and construction process had been better executed."

He said a decision by MSPs in June 2001 to lift the cap on the price of the building led to problems with controlling the cost, there should have been better reporting of cost issues to MSPs and a failure to control consultants' costs saw a rise from an estimated 23m in 2000 to 50m at present.

Paul Grice
Paul Grice disputed findings in the report
Mr Black said the parliament's corporate body had not significantly altered requirements over the last four years and as such the main cause of the delay since September 2000 was the production of detailed variations in the design and the late delivery of information.

He issued a previous report on the project in 2000 when the estimated cost of the building had been put at 195m and in which he identified wide-ranging flaws in its management.

The parliament's chief executive, Paul Grice, rejected a number of the critical conclusions in the report, including those on cost management, responsibility for programming, the process of reporting cost increases to MSPs and the ability of project managers to cap consultants' fees.

He told the audit committee that the auditor general also failed to analyse the role of the Holyrood Progress Group, which was set up by MSPs in 2000 to get a grip on the project.

Mr Grice said his team was not given enough time to check the report and had asked the auditor general to delay publication until the middle of July.

He said: "I honestly felt that the process could have been pursued further and the report could still have be presented formally to this committee in good time ahead of Lord Fraser's report."

The BBC's John Morrison
"Up from 40m to 431m"

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