Lord Morse
Main Page: Lord Morse (Crossbench - Life peer)
Lord Morse (CB)
My Lords, I realise that as a chartered accountant, my remarks will be quite different to those of some of the other speakers, and I apologise for that in advance. Noble Lords have already had a very clear exposition of the project from the Senior Deputy Speaker and my noble friend Lord Vaux. We have three options to look at, and I am planning to focus primarily on one of them. The others have been covered very well, but I will just say a bit more about the EMI—enhanced maintenance and improvement—option. I have no preference about which option is selected, but I think that it is the one that is possibly the most difficult to understand at this stage, and it needs to be understood. I will make a few remarks only on that subject. All the projects will take a significant time—we have heard that—but it is generally expected that this enhanced maintenance and improvement project will take much longer. That is the first point.
From this, there are more possibilities, or probabilities, for changes in scope to occur during the project because, if you are talking about a project going on for decades and decades, what is wanted will change. People have to understand that. Therefore, we are not talking about a certain prediction of what will in fact be in scope of the project. That will change, or is highly likely to change, perhaps because of inflation, which is higher than we provided for—of course, we are providing for it—and because of changes in information and technology that are almost certain to happen, given the rate of change, as well as because of changes in standards on safety and accessibility. We take those into account, but they are highly likely to change.
From my experience of being involved in major projects, I can say that one of the features of these types of changes is that they all involve additional costs. I have never yet heard somebody running a project run into my room and say, “Look, good news: we’ve changed the scope of the project and we’re cutting a quarter off the cost”. That is just never going to happen. The cost will go only one way: upwards, and quite substantially so. There is already a substantial existing repairs and renewals programme running in the Palace, estimated at £1,045,000 a year—no, a week; I wish it were a year. That is a very substantial sum of money.
It is important to realise that it will be difficult to distinguish this new expenditure on enhanced maintenance and improvement from the existing activity, and I am concerned about that. As we go forward, in future, will we really be able to keep these streams of activity, happening on the same site, clearly separated? I do not doubt that we have plans to do that, but it will be challenging, I suspect. We need to think about that very carefully and make sure that we do not find costs sliding from one category to another because it is managerially convenient at that moment in time. This is not something I am making up, by the way. There are current experiences where you can see that sort of thing happening. So, if we are going to go for this approach, we will need to go very strongly indeed in terms of financial control at a level that we do not always accomplish at the present time, frankly.
The reason we are considering EMI alongside the other options, which were there much earlier, is that a significant number of Members were not attracted to decanting. They made their views clearly known. Therefore, we found ourselves with Members who told us that they were prepared to accept inconvenience and delay as a price for staying in the Palace. But, having contracted to pay that price, will they continue to want to pay it once we get into the project? I am sorry but there is such a thing as renegotiation of a contract, and there are plenty of Members who are perfectly capable of renegotiating this one. I just remark to noble Lords that, if this approach were to be agreed, we may find that there is more negotiation and more change in the project.
Finally, there is a risk that this approach may be regarded as kicking the can down the road, as regards substantial expenditure at a time when the public finances are under extraordinary pressure. It is not just ordinary pressure right now; it is extraordinary pressure. Therefore, we must recognise that, although there may be no kicking the can down the road, the temptation when we actually come to vote may be quite strong. It is worth watching out for that.
My conclusion is that, if we select EMI, those initials may come to mean “enhanced money invested” instead of “enhanced maintenance and improvement”—that is quite possible. That is my little bit of poetry for today. We need to exercise vigilance if we go down this route. I am not saying that we cannot do it, but—I am repeating myself—it will require a quality of vigilance and control that we do not always exhibit. Therefore, we need to do better on that.