Management of the Holyrood building project (PDF ... - Audit Scotland

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Part 5. Project management and control
5.1 In this part I assess the
management and control of the
Holyrood project over the four years
since my report of September 2000.
5.2 In that 2000 report I examined
the strengths and weaknesses of
project management and compliance
with good practice within the public
sector. I concluded that there should
have been greater recognition given
to the importance of managing risk
and that accounting for risk was
insufficient. I said that the reporting
of estimated costs was unsystematic
and incomplete. I questioned
whether project management had
the right mix of skills. I suggested
that there should have been
incentives for the consultants to
avoid cost increases and ensure
delivery on time. I also
recommended improvements to
project management and
governance. In evidence to the Audit
Committee in October 2000 the
Accountable Officer indicated
acceptance of these
recommendations, which he stated
were being implemented (Exhibit 37).
5.3 The estimated cost has increased
by some £220 million over the last
four years. It has therefore been
important to examine what
happened, but answering this
question should take some account
of the quality of the building.
Although the audit has not attempted
to evaluate the quality achieved,
project management’s view is that
the end result is likely to satisfy fully
the high quality standards in the user
brief of 1998 (Exhibit 38 overleaf).
Throughout the project there was
tension between the objectives of
time, quality and cost
5.4 In 1998 the client required that
the building should be completed by
summer 2001. Time was a priority.
Quality has been equally important
throughout the project. The user brief
demonstrates that the objective was
to provide a high quality building of
which the Scottish people could be
proud.
5.5 Construction management was
seen to be the only method of procuring
the Holyrood building that could
deliver high quality within the deadlines.
5.6 The client also set a budget at
the outset. But there were conflicting
messages about how important cost
was compared with time and quality
considerations.
• Construction management, the
chosen procurement method, is
not very well suited to any project
with a fixed cost constraint.
• The client considered that there
was a fixed budget for the project
from the start, but it did not
communicate clearly what the
budget was 27
.
• In the early stages, full estimated
costs were not reported to the
Parliament and this did not
happen in a systematic way
until 2000.
• Parliament set a fixed budget in
2000 but by 2001 the client
regarded it as no longer
achievable. Subsequently, the
client reported successive cost
increases to Parliament and did
not seek to set any new financial
target or limit.
27 The client stated in 1998 that the budget was £50 million. This excluded costs such as professional fees, landscaping and irrecoverable VAT then estimated at £40 million.