Restoration and Renewal: Annual Progress Report

Debate between Lord Morse and Lord Tyrie

Wednesday 18th October 2023 Grand Committee

[Lord Morse (CB)]

My Lords, it is an honour to speak after the noble Lord, Lord Blunkett. I will try, first, not to repeat too much of what noble Lords have already heard, if that is possible, and, secondly, take a financial view of the project, since that may be more of a minority sport than one might think.

First, in my view, the new governance structure has worked well to date. The programme board, of which Nigel Evans is chair and I am deputy chair, has worked hard over five months to identify a shortlist of options for restoration and renewal and a way forward for the programme. The programme remains on track to deliver the strategic case for both Houses before the end of this year. This will not be the final decision; it will instead seek the two Houses’ endorsement of the shortlist.

The important point, as the Committee has already heard, is that in that shortlist there is one approach that involves a full decant of both Houses and another that involves only a partial decant and something described as a “continued presence”—but, as noble Lords will hear a bit later, it will not be a “continued presence” for the House of Lords. We will come to the opportunity to vote on that. Before we do, there will be work on detailed proposals and costs over the next year, which will be brought back to the Houses for a final decision, probably in 2025.

The programme board asked me to chair a sub-board, with a particular focus on finance and cost. Over the course of the next year, the sub-board will not only look rigorously at the delivery authority’s budget, which it did last year, but look more closely at the underlying cost assumptions on which the programme is to be costed. More work needs to be done on costs, including benchmarking the cost for the programme against similar restoration programmes of this scale. Achieving value for money has been a central theme running through the programme board’s discussions, as has the need to ensure continued in-depth engagement with Members of both Houses about R&R.

Let me emphasise a few points that are really important to bear in mind. First, while the strategic business case will be presented in the next few months and confirm the options to be costed in detail, setting out the shape of what is proposed, the real crunch decision will be to decide on—and commit to—one fully costed option. That is most likely, as has been said, to be taken in 2025—again, most likely after the election of a new Government and Parliament. The crunch decision will be theirs to take.

In the meantime, we need to keep costs under control, commensurate with making the requisite progress, and make sure that planning and costing for the programme as a whole are realistic and hard-headed. If a new Government decide to kick the can down the road in any way, at least some of the costs being incurred now may prove abortive, depending, of course, in what direction the can travels. We need to keep ourselves on top of these costs and be ready to account for them in that context, as well as in the context of moving forward successfully. It is important for your Lordships to bear in mind that both the options being evaluated assume that the House of Lords will decant to the QEII conference centre for not less than 10 years, so when we describe this as temporary accommodation your Lordships need to think carefully about what “temporary” means.

Secondly, assuming that the crunch decision is to go ahead, and I hope that it will, there will of course be risks of time and cost slippage to be managed. With so many uncertainties inherent in a project involving such a complex historic estate, I believe some slippage is highly likely. We need to plan to keep on the pressure for value for money even if slippage occurs. That can be done but it requires considerable work.

What is avoidable is what I will describe as scope creep or special pleading, where there are constant attempts by interested parties to interfere in the plans and keep modifying them to achieve change that might improve their particular facilities. I saw this very radically in the design of the headquarters of the United Nations, which went wildly over cost as a result. Setting a point at which there will be no further modifications in the plans and defending that strongly, so that there really is a design freeze, will be most important.

[Lord Tyrie (Non-Afl)]

I had not put my name down for this debate but I am absolutely delighted that the noble Lord is taking a financial view of all this. Does he agree that this project is taking place at a time of great financial stringency and that the other place is going to be trying to work out how, in the short to medium term, its Members are going to make it acceptable to their electorates? If that is the case, does he also agree that we may have to accept a longer period of renewal that may come with a partial decant, even if the discounted present value over the whole life of the project turns out to be higher?

[Lord Morse (CB)]

In a way, the noble Lord is asking me to answer a hypothetical question, but if a new Government appear and the first thing they are asked for, or an early decision they have to make, is to commit to a very large sum of money on this project, it will take a certain amount of courage to go ahead with it. It would be the right thing to do but it will take a certain amount of courage. I thank him for that intervention.

To sum up, my comment is “Good progress so far”. I do not say that lightly. I genuinely think that the client board, the programme board and the delivery authority have all performed well so far, but it has to be said that the big risks, including the risk to public value and the challenges, are in the future of this programme. We have done well but we have not started climbing the steeper mountains yet, so I wish to record my support for the progress report.