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

Exhibit 46
Comparative unit construction costs for high quality buildings
Cost reporting and financial
control should have been better
developed at all levels of the
Holyrood project
5.20 In my 2000 report I
recommended that project
management should review and
report project costs regularly
(monthly) to the client on a
comprehensive and systematic basis.
The Accountable Officer advised the
Audit Committee in October 2000
that he had implemented this
recommendation. But subsequent
financial reporting of the project has
not always been comprehensive or
systematic.
5.21 Project management provided
estimates of the overall project cost
to the Progress Group and the
Corporate Body, in the form of drafts
of the reports that the Corporate
Body subsequently provided to the
Parliament’s Finance Committee
from June 2001. Until July 2003 the
reports were provided only quarterly
or less often (Exhibit 5). None of the
reports before July 2003 provided
information about landscaping costs
and only four of the eight reports
Part 5. Project management and control
Estimated Gross floor area Unit cost
construction or
total project*
cost
Holyrood – current position £273m 30,600m 2 £8,922/m 2
Holyrood – previously (Stage D £119m 30,600m 2 £3,889/m 2
June 2000)
Portcullis House £161m 22,811m 2 £8,600/m 2
New British Library Phase 1 £511m* 112,650m 2 £6,600/m 2
City of London financial centre – £180m* 67,350m 2 £3,100/m 2
private sector client
Large multinational HQ – £220m 87,680m 2 £2,600/m 2
private sector client
Greater London Authority building £43m* 18,000m 2 £2,600/m 2
London insurance HQ – £185m* 79,000m 2 £2,300/m 2
private sector client
Note*: Where construction cost is not available the total project cost is reported. Unit costs have been updated to current outturn costs, using the BCIS index.
Source: Audit Scotland
provided between June 2001 and
June 2003 reported all the other
main cost items. There was no other
regular reporting of total project cost
until July 2003 when the Corporate
Body started routine monthly
reporting to the Finance Committee
on total project costs.
5.22 The cost consultant reported
estimated construction costs in detail
every fortnight to project
management and the Progress
Group. The scope and format of
these reports varied over time, and
the Progress Group has stated that it
found the reporting format
unsatisfactory at different times.
5.23 The cost consultant considers
project management did not inform it
of any critical opinion expressed by
the Progress Group at the time. The
cost consultant took it as read that
project management understood the
cost issues it had reported and was
satisfied with the clarity and
competency of its cost advice.
5.24 The cost consultant was
responsible for monitoring
construction costs only and providing
71
risk analysis. It was not responsible
for monitoring other costs such as
fees, VAT and some of the
landscaping and fit-out costs.
Although the cost consultant also
provided an overall estimate of
project costs to project management
this did not accurately measure fees
and VAT, which the cost consultant
was not responsible for monitoring.
In any event project management did
not report these overall estimates to
the Progress Group.
5.25 Although the cost consultant’s
reports highlighted variances in
construction costs when they
occurred, there was little narrative
and no written analysis of reasons for
change. Until July 2003, when the
Corporate Body introduced regular
monthly reporting on progress to the
Parliament’s Finance Committee,
project management provided
written reports on the costs of the
project to the Progress Group and
the Corporate Body on an exception
basis only, which was relatively rare.
5.26 There was no regular or detailed
reporting of the significant
expenditure on the consultants’ fees