Question

To ask the hon. Member for Blaenau Gwent and Rhymney, representing the Restoration and Renewal Client Board, with reference to the cost ranges set out in Table 1 of the costed proposals report, what assessment the Client Board has made of the historical accuracy of P50 and P80 estimates in comparable UK major projects; whether the inflation-adjusted cost ranges for Full Decant and EMI+ adequately reflect recent construction inflation volatility; whether the optimism bias applied sufficiently accounts for heritage, asbestos and live-estate risks; and what estimate it has made of the potential fiscal exposure to the taxpayer should cost escalation exceed the upper P80 range.

The recent report from the Restoration and Renewal (R&R) Client Board, Delivering restoration and renewal of the Palace of Westminster: the costed proposals (HC Paper 1576), provides costs and schedules as ranges at different confidence levels (P50 and P80). This is in line with major programme best practice and guidance from the National Audit Office (NAO).

In addition, the R&R Programme carries out benchmarking against UK and international comparators.

The R&R works and construction costs have been benchmarked against 14 international Parliamentary projects and 18 heritage building projects, including Kings Cross Station regeneration, Manchester Town Hall, London Olympics, Crossrail (the Elizabeth Line) and others.

Benchmarking of cost estimates has also included benchmarking against other comparable types of work, for example asbestos removal (including in heritage sites), hospital mechanical and electrical work, or Salisbury cathedral stonework where appropriate; the types of cost and levels of risk allowed for in estimates against the Canadian Parliament and other comparable Parliamentary projects (including UK Parliament projects) and complex restoration projects; and management costs against other major programmes. Risk has been calculated and incorporated into estimates in line with Infrastructure and Projects Authority (now the National Infrastructure and Service Transformation Authority) and NAO guidance for programmes.

The inflation profile follows the Bank of England Monetary Report (November 2024) which remains constant at 2% from 2028/29 onwards in line with Bank of England targets. Sensitivity analysis looking at the impact of construction inflation outstripping Bank of England targets was also considered.

The R&R Programme has recognised the heritage, asbestos and live‑estate challenges inherent in the Palace, and elements of these risks have been incorporated into its contingency planning. However, the independent assurance findings indicate that some of these factors are not yet fully reflected in the quantitative modelling, and a portion of the remaining exposure is currently covered through Optimism Bias. As the design matures and further survey data becomes available in the proposed next stage of the works, the Programme will refine these allowances to ensure they are fully and accurately captured.

Under section 7 of the Parliamentary Buildings (Restoration and Renewal) Act 2019, the two Houses are required to approve both the Delivery Authority’s proposals for the Palace restoration and a total funding envelope before the Programme can move to phase two. Furthermore, under section 7(4), once that approval has been obtained, any significant subsequent changes to the design, timing or funding of the works would require further approval from the Houses.

Costs will be monitored closely throughout the delivery of the R&R Programme. Wider funding for the R&R Programme is subject to formal scrutiny from the Parliamentary Works Estimates Commission with input from HM Treasury, and audits by the NAO. The Public Accounts Committee can and has scrutinised R&R including its current inquiry announced in December 2025. The R&R Client Board, R&R Programme Board and R&R Delivery Authority Board also scrutinise costs to ensure value for money. Reports relating to R&R delivery and costs will continue to be publicly available, and there will be regular ongoing scrutiny by Members and Member-led Boards.