Welcome to this session of the Public Accounts Committee on Thursday 9 July. Today we will be examining the programme of works to restore and renew the Palace of Westminster. As many of us see at first hand, the Houses of Parliament need significant work to restore and renew them. Parliament spends a substantial sum—about £1.5 million—each week on patching up the Palace, while the list of health and safety incidents continues to grow. The programme is now at a critical stage: parliamentarians are being asked to reduce the number of delivery options from four to two and to approve the initial phase 1 works, whose cost is currently capped at £3 billion. I think it is commonly accepted that if we can get as much consensus as possible around phase 1, we are more likely to get Parliament to approve the whole project. If it does not, we will be left with the critical problem of trying to maintain a decaying building. I remain concerned that there is not a clearly articulated vision for the programme, without which costs and timescales will remain uncertain. There will also be an impact on the procurement and tendering process, which is bound to result in higher costs. Parliament also needs to be very clear on a simple and effective governance mechanism that is designed for delivery, so that once contracts are let and the project starts, there is not only appropriate scrutiny but, hopefully, a minimum number of alterations from the original contract, from beginning to end. Today the Committee will examine when more information about phase 1 and particularly the temporary accommodation arrangements will be available, and explore how the Government’s arrangements could be reset to support scrutiny of the programme’s delivery. And I will simply say this: if this generation does not defend our system of democracy, which the Houses of Parliament are at the heart of, we cannot expect the next generation to defend it in the same way as it has been defended in the past. This project is critical to our country’s future. Thank you, Charlotte and Russ, for attending. Please will you introduce yourselves? Just saying who you are, what you do and how long you have been doing it would be really helpful.

Thank you very much, Chair. I am Charlotte Simmonds. I am the managing director of the Restoration and Renewal Client Team, so I work on behalf of the Clerk of the House of Commons and the Clerk of the Parliaments to oversee and sponsor this programme. I have been working on R&R directly since 2019, but I joined the House in 2008, when I started working on some elements of R&R—so a long time.

I think you have undersold yourself. Haven’t you just been promoted to senior responsible officer?

I am the SRO for the programme, yes.

Well done—congratulations.

I am Russ MacMillan, chief executive of the Restoration and Renewal Delivery Authority. We are a special purpose company set up to deliver against the requirements that Parliament sets us. I joined in February of last year, so I am just coming up to a year and a half.

Very good. We will go into questions now. I think that there are about four key concerns among Members of the Houses of Parliament and I suspect that they range, depending on whether we are a peer or a Member of Parliament, from how long we are going to be out and whether we are going to come back—people are very concerned that they will not come back—to whether the fixtures and fittings will remain largely as they are. If they are removed, will they be returned? The fourth one is the costs, and I think the more we can do, Charlotte and Russ, to reassure peers and Members of Parliament on costs, the better we will succeed when this comes before Parliament. Let’s start with phase 1. Is there anything more you can do on that? I read the document last night, but I have to say that if you read the pages on phase 1, it is a sort of obfuscation—an object lesson in how not to tell us what you are going to do. So is there any way you can clearly tell us what you are going to do in phase 1 and allocate to each of the items a cost, so that if nothing else, both the NAO and we can keep scrutinising it. If we don’t get phase 1 right, there will be a propensity for the whole thing to start to go wrong.

We have further summarised the information in the costed proposals report and published a new leaflet for Members, but this replicates what is in the report. We recognised that the information was part of chapter 7 of a very large report, so we have tried to make it more accessible to people. Notwithstanding your main point about what the elements are, at a high level there are four elements. There are the resilience works, which is temporary accommodation. There are enabling works, which are the nuts and bolts of getting site compounds set up, diverting services and so on. There are early works, where we can start to undertake that in specific areas in the Palace. And there are the really—

Sorry, what was the third category?

Early works—any works that we can undertake in advance in discrete areas of the Palace. And the last, very important part is the pre-construction activity to do with planning and design. I can list those in cost order if that is helpful for your Committee, Chair.

Yes, of course—please do.

Programme management, procurement and detailed design—the cost of that pre-construction activity is about £860 million. That includes £320 million of design costs. Then we have temporary accommodation, which we described as the resilience works. For the House of Lords, the preferred location is the QEII conference centre, over the road. That would require acquisition, because the Ministry of Housing, Communities and Local Government owns the freehold, and those discussions are under way. It also includes the fit-out, which has a cost of about £417 million currently. For the House of Commons, the preferred location, should there be any temporary Chamber, is Richmond House, but otherwise the Commons would be housed on the Northern Estate. So this building would go to Richmond House and Norman Shaw South. That work is being undertaken by an in-house team, under the Commons building and infrastructure portfolio. Within that, the cost of the R&R-related works to do with providing a temporary Chamber or a Chamber space is about £328 million. There are some other areas of temporary accommodation. That is very important for our heritage collections. We have about 26,000 heritage items in our collection. So there will be moves and leases, and the costs of a heritage facility. The moves and leases come to about £75 million and the heritage facility comes to £66 million. Is this a good way to go through this, Chair?

Yes, it is very helpful. At least we are getting it on the record.

Okay, I will keep going. The cost of early works, which include internal works to Victoria Tower and some of the underground works, is in the region of £140 million. There will be additional surveys, be they archaeology, environmental, fabric or asbestos surveys, and they will cost in the region of £90 million. There is a requirement for a river jetty, to ensure that we can have riverside deliveries, because it is a very constrained site. We will also require a cofferdam, to do some work to the riverside of the Palace. The cost of that is estimated to be about £70 million. Then there is the work to set up a site compound, which includes clearing the spine roads—the roads that you will walk from end to end in the Palace—of all the detritus of site cabins and other things that we have now, so that we can access those spaces. That is around £30 million. There is an additional £20 million for some early works in particularly targeted areas: accessibility, catering, security and logistics. There are three areas within that package of works that have yet to be quantified, and work is under way. One is riverside security. I have said that we need a river jetty and we also need a cofferdam, but generally speaking, Parliament is undertaking a security programme, and therefore we need to understand what security would be required to put in place the R&R elements on the riverside. Those conversations are ongoing with the security teams. We will also need to isolate, decommission and relocate the bicameral services. That work is complex and is under way between the Delivery Authority and the in-house team, Strategic Estates. The last one that needs to be confirmed is the medieval cloister court, and the work that needs to be done inside to conserve one of the three medieval bits remaining of the Palace. All those items of work sit within the £3 billion cap. Even though they have not been quantified, they all sit within that cap. It may help to know that about two thirds of those items will be delivered by Russ’s team, the Delivery Authority. About a sixth will be delivered by the in-house team. The remainder of the cap is our contingency and to accommodate those additional items.

How much, in that £3 billion, is contingency?

About £500 million is contingency, including the areas that have not yet been costed.

So as soon as you start to cost all those areas up, you could actually get to fairly low contingency?

Some of the items themselves will have contingency built into them, but overarchingly, we have set a cap. The Delivery Authority is confident that it can deliver in that cap. I just wanted to be clear that there are three items that are, as yet, unpriced, or not sufficiently priced for us to be able to tell you costs now.

That was my next question, Russ. How confident are you as the Delivery Authority, bearing in mind that it is not all within your control, that you can deliver all these works for £3 billion? That is to both of you, really. What degree of confidence do you have? You need to be getting that across to Parliament.

The answer is: we are very confident. The important point is that each of those numbers that Charlotte gave you will already have some risk contingency within it, and then as Charlotte said, there is another £500 million on top of that, which is effectively unallocated, both for the items that are not priced and for things that might be unforeseen, if you like. The work that we are doing during phase 1 tends to be activity that is a little bit easier to price. It is at a greater level of maturity. Things like design are easier to take a perspective on for how much they will cost. Clearly, some of the big risks in the programme will kick in during the main construction phase. I am more confident in the phase 1 activity than the main programme, where we have put very significant allocations of contingency, reflecting the uncertainty in relation to the lower levels of design maturity.

We have talked about the money, but are you going to be able to achieve it within the seven years?

The other important point is that underneath the phase 1 plan are two very detailed schedules: a detailed schedule for the full decant option and a detailed schedule for the EMI+ option. The Client Board is recommending taking forward both those options. If you take the plans at face value, they proceed at different speeds. Effectively, the EMI+ option would proceed more slowly than the full decant option. One of the first things that we want to do within phase 1 is work to converge those designs, so that we end up with a common first seven years. When we have done that convergence, we will absolutely be able to confirm in detail the contents of phase 1.

Okay. There are lots and lots of questions in what you have just said, but that is an extremely helpful list. Charlotte, is this detailed in that yellow piece of paper that you held up?

Yes.

I have not seen that yet.

We have an overview, a scope 1 works and a cost leaflet.

Good. Could that be circulated to everybody?

I am happy to circulate it to you. We took on board the views of this Committee about making sure that we presented further information on costs to Members. It is a way to simplify it.

That is really helpful. In this document you have recommended that there should be a vote in 2030 on which option to take forward. There is a certain amount of work before you get to that 2030 vote. I want to quiz you on whether you are going to be able to do it in the next six years. Probably the biggest bit of work within that is to talk to some contractors, as I hope that you will ask them to help you design this project and then cost it. Can I commend to you the Bank of England’s real-time gross settlement system project, which is one of the few projects that we have examined in this Committee that has been successful? Within that project, one of the main reasons that it was successful was a process called “competitive dialogue”, where they had several contractors, but basically got it down to two or three and paid them for their advice on design so that the contractor who did not get the project did not waste their time. They were therefore encouraged to put time in and give you the information as to how it should be designed. Within the four years, are you going to be able to come up with a preferred contractor with a reasonably certain cost range for whichever option we take forward—the EMI+ or the decant? Is that feasible within that four-year period?

Yes. As you suggested, one of the very first activities within phase 1 is the procurement of our long-term partners. We have already had partners involved in the programme, and they have helped us to develop the proposals that you are looking at today. What we need to do is to move to the partners that are going to take us through the rest of the programme. Early contractual involvement is absolutely integral to the way we want to deliver the programme and to get the right expertise brought to bear very early. On your question about how this plays out moving to 2030, roughly speaking, it would be one and a half or two years of procurement activity, and then we would move into about two years of detailed design activity where we would take the concept designs that we have and develop them to the next level of maturity and the point where we are ready to go for planning consent. Under current plans, that would happen prior to 2030. If I were sat here in 2030, I would expect to have much more certainty around the cost ranges, and we would have done as much as we possibly could to retire the risk. For instance, procurement risk will clearly be retired at that point, and we will also hopefully be well on the way to retiring some of the planning consent risks. I think that Parliament will then have a much better idea on the long-term cost of the programme prior to its next decision.

I am sorry to Committee members; I was not going to ask quite so many questions, but the witness did mention planning. How are you going to conduct the planning process? You have two completely different operations that you have to talk to the planners about. Are you going to go for two different planning applications or are you going to talk to them about both and then confirm after 2030 which you are going for? How will that process be conducted?

Our planning approach is to set out, broadly speaking, an overarching master plan, but then to bring forward packages of work in what we would call consent groups. By doing the planning incrementally in that way, with the early consent groups, we would seek to have significant amounts of commonality between the two options that we take forward. There will absolutely be some things that we would need to do two versions of. An environmental impact assessment would be an obvious example and the impacts associated with a 40 to 60-year programme are quite different to the impacts associated with a 20 to 25-year programme. Some things will be parallel, but at the moment we think that we should be able to submit a single planning application within the phase 1 period that would allow us to get going and get on site to deliver the phase 1 works that we are setting out.

Do you need planning permission for any of the phase 1 works, and have you got it yet?

We will need planning permission for those works, and no, we have not got it, because we would need to take the designs to the next level of maturity. We would envisage submitting for planning in around four to five years’ time.

For the phase 1 works?

Yes.

Will that not delay the schedule of works you have just given us, such as the dam and so on? I presume you need planning permission to start digging up tunnels and so on. Will that not require planning permission?

Under the current plans, we have allowed a year for planning to be determined: we submit in year 4, we get an answer in year 5 and then we have two years of the more invasive construction work at the end of phase 1.

And for the temporary accommodation.

Yes, the QEII would obviously be progressing in parallel to that.

I apologise to the Committee and anybody who is listening to our proceedings: I should have declared that I am a fellow of the Royal Institution of Chartered Surveyors. I do not think I will personally benefit from any of these works—I am not expecting a great bung as an advance—but some of the members of my profession might.

Yes, it clearly is very important. The most important decision we need, first and foremost, is to have debates in the Houses and to get direction from the Houses on how they want to take this programme forward. Specifically in relation to temporary accommodation, in 2024, just before the general election, the Client Board—the two Commissions—published a report that indicated the preferred locations: the Queen Elizabeth II conference centre for the Lords, and Richmond House and the Northern Estate for the Commons. That is consistent with numerous reviews that have been undertaken since the Joint Committee on the Palace of Westminster in 2016. Those are the ones that we are pursuing and moving forward with. All options require some level of decant. We already decant people when the works are too intolerable, and obviously it depends on which option you select, full decant obviously having the most pressure. Work is under way with political stakeholders and boards to develop the plans for temporary accommodation, but, as I said, we do need direction from the Houses. It is a balance for us, because we do not want to have a delay on this programme—it is very costly to have delay on this programme—but we are conscious that we cannot progress too far if we do not have the direction from the Houses. That was a preamble; to get on to your question about the decisions that we need, for the House of Commons, the Northern Estate requires a refurbishment regardless. That is being delivered through the Commons building infrastructure portfolio, as I said. Richmond House is the first building to be tackled through that portfolio, and it is the critical one for R&R. Under a full decant, it would provide a replica Chamber and the services. Under an EMI+, the other recommended option, it would provide a space for a contingency Chamber. It is at concept design level. We really need direction from the programme to confirm the schedule. In a memorandum to this Committee, the Clerks have set out that there is some expected delay on that programme because an assumption around use of adjacent space has not come to fruition. That is introducing about a four-year pressure.

Both the Palace and the Northern Estate are constrained. They are tightly packed in and to undertake logistics work, whether you need cranes or welfare, we have to find innovative solutions, often looking outside our boundary. For Richmond House, the assumption was that we could use some space adjacent to Richmond House. That has not proved possible, so the Delivery Authority and Strategic Estates team are working collaboratively to try to mitigate that and bring that back down—reduce the time and cost impact—largely through a phased availability of Richmond House and a phased decant out of the Palace. But we need that schedule confirmed to give us certainty to move forward. We also need to confirm the space allocation and what services will be provided for the House of Commons. The Client Board’s costed proposals report identified that if you have a full decant from the Palace, you cannot fit all the Commons services into the Northern Estate—it is just not possible because there is not enough space—so there is going to need to be a creative and purposeful approach to look at how we can make sure we can continue to provide proceedings and suitable and sufficient services to facilitate the House of Commons. R&R sets the requirements at a high level for temporary accommodation, and then it is for the Commons building infrastructure portfolio to design for that and discuss with the House of Commons Commission minimum service levels, business change and anything else. To summarise, there are two things on the House of Commons temporary accommodation: the schedule and the space allocation.

The schedule is working through on the programme level in Strategic Estates, working with the Delivery Authority, because we are so dependent on each other to make sure that we can get the best outcome for both programmes.

The Northern Estate programme is on the cusp of settling its plans. We would then react to those plans and build those into our own plans. That would probably need to happen in the next one to two years to then do all the things I talked about earlier that allow phase 1 to play out in the way we would expect it to. Clearly, there are some things you could carry forward, but having some certainty in the next year to two would be helpful for solidifying the plans so that, when we get to 2030, we have absolute clarity about what it is that the options present.

Yes. I do not think that it is quite that sort of cliff edge. It is a programme in development. There are clearly some decisions that need to be made and those then need to be reflected into the Northern Estate programme. So I think it will be a much more incremental process than that, but it will be incremental alongside R&R. As Charlotte said, we are working very closely together to make sure that as the Northern Estate programme iterates itself, our own programme iterates itself, and the two programmes do that side by side.

First and foremost, we need the debates, which are what will give us the most—

The debates are not in our gift to timetable; they are for the Government to timetable. We are waiting. The Leader of the House of Commons has indicated that those debates will come soon, but it is not in our gift to schedule them.

We do need the debates, absolutely, to give us the direction to move forward—

The report was drafted with the assumption that the debates would happen by Easter this year, and we did not have debates by Easter this year. If we were to get debates by the summer—I am sure that Russ can find the cost implications of that—there would be a cost of delay; if we did not get debates until the end of this year, there would be a further cost of delay; and if we did not get them in early to mid next year, again, there would be a further increase. If we can get decisions by the end of this year, we feel that we are absolutely fine and able to continue to pursue as planned, but if we go into next year, there are some real, significant challenges.

I think that is probably outwith Charlotte’s role. If you want to answer, answer, but it is a political question.

I am happy to answer that. We rely on this excellent Report of the National Audit Office, which reinforces that Members have all the information they need to take a decision, but it is for the Government to timetable those debates.

Thank you. I am sorry to have interrupted, but I do not want to put our witnesses in a difficult position.

I have a couple of points to follow on from Catherine’s; I think most of it has been covered. On the overall phase 1, including the temporary accommodation, the thing that we as a Committee are very keen on is milestones, reporting and making sure things do not slip. What will be in place to track progress through that seven-year phase 1 process? The other question, following on from Catherine’s, is: who is accountable if the accommodation projects fall outside the schedule?

On your first question, about how we will track that, if it is okay I will add how we will report it as well because I think it is important for you to understand not just how we do it inside but how we are reporting out and how Members are involved. The phase 1 package of works is capped at £3 billion over seven years. That equates to about £429 million a year. It would obviously be profiled and presented to our boards and subject to scrutiny. It is subject to scrutiny at official level. The Delivery Authority has its own internal scrutiny; my team apply scrutiny to the Delivery Authority.

Who does that involve? Who is doing the scrutinising?

Internally, for my team’s scrutiny, I have a number of assurance and other experts. We also pull in the finance directors from both Houses as part of this scrutiny, and we draw in independent experts. We always have the ability to pull in our independent advice and assurance panel, which is four leading experts on major programmes, but we have also utilised consultancy support and other independent experts in, say, the field of health, safety and fire where we need them. We will bring those in to scrutinise not just the costs and the schedule but what is being delivered and, importantly, how it is going to be delivered. That is the official level. That information is taken up to our board structure. It is Member-led for R&R. At the top of that structure is the Client Board, which is the two House Commissions meeting together to make strategic decisions, and they delegate day-to-day oversight to the Member-led R&R programme board, which has four independent experts with major programme experience. The Clerk of the House and the Clerk of the Parliaments, as the corporate officers and accounting officers, sit on both the programme board and the Client Board. Those boards scrutinise. As I said, the programme board goes into the detail. It also has a sub-board to really get into the detail, on a monthly basis. They will be scrutinising it. That is our level of scrutiny. The formal scrutiny is through the Parliamentary Works Estimates Commission, which is also Member-led. It is chaired by the Chairman of Ways and Means but it is a bicameral commission, so it has Members from both Houses. It has input from Treasury and it looks specifically at the Delivery Authority estimate, although we provide all R&R spend to it so that it has visibility. It utilises public sessions to make sure that we have a level of public scrutiny on that as well. We have that regular process. We have a number of other controls within that, which make sure—

Sorry to interrupt, but you say “regular”. How regular are we talking?

The programme board and the sub-board meet monthly. We report monthly to them. Obviously there are ongoing arrangements and engagements between our teams. The Client Board meets, on average, about three to four times a year, but that will depend on what is happening. It met more frequently when it was approving the costed proposals report. The Parliamentary Works Estimates Commission must meet annually. Again, it meets more than that, but for the last couple of years we have had at least one annual public session with them. As I said, there are a number of other controls that sit underneath that. DA publish all spend over £25,000. The programme board, which is Member-led, approves all DA commitments over £20 million. So there are a number of mechanisms within that to ensure—

So there is transparency about some of this—

Sorry, I said that I would talk about reporting, and then I completely forgot.

Sorry to interrupt. These are very important questions, but there is one other important level of scrutiny. I am going to bring in Gareth Davies, the Comptroller and Auditor General.

Just to say that in the same way that we produce the Report that the Committee is using to inform today’s session, this will obviously form a significant part of our work programme in the coming years, and if the Committee, or whatever scrutiny structures are set up specifically for the programme, would find it useful, I think it would be an appropriate use of our resources to produce at least an annual update giving an independent take on progress, cost and schedule.

I think that slightly independent view is very important. Thank you for that. That will enable us, Sarah, to scrutinise it on the back of that investigation if we wish. That is an important extra level of scrutiny. Thank you for the really important question.

On the big projects that we have seen in the past, one of the big issues that we have come up against time and again is the lack of monitoring throughout the process. If we can see it on a regular basis and have that ability to scrutinise, that would be very useful.

Absolutely, and the Clerks have allowed the NAO access to do these value-for-money reviews because of the scale, sensitivity and significance of this programme. Everything that I have just described is part of the normal parliamentary oversight. Members of both Houses already have the ability to ask questions in the Chamber, and they will be answered by the Client Board spokespeople, who are the Commission spokespeople—Nick Smith MP in the Commons and the Senior Deputy Speaker in the House of Lords. That takes place within the normal account audit arrangements, with the National Audit Office auditing the DA accounts, the House accounts and the parliamentary works grant—the fund for this programme. In terms of reporting and transparency, we will continue to report up and out from this programme. Under the Act, we are required to publish an annual report, and we will continue to do that. We currently report on a quarterly basis as well. As we move into delivery, that will focus much more on performance and progress. We will communicate about delivery elements as we go. Hopefully, as Members, you are aware of some of the works that are going on on the parliamentary Estate that affect you. We will continue to do that, and we will look for innovative means to do that. Last year, we piloted some bookable slots for people to come in and see the archaeological digs, and they were very popular. We know that some mechanisms are preferred over others, like video. We will keep driving that forward. The Lords has a slightly different arrangement. They have an annual debate on R&R as part of their arrangements. That doesn’t currently happen in the House of Commons. We would be open to anything else that Members want, and we will keep looking for opportunities, but the ideal is that we continue to be transparent. I should say that all the minutes from the deliberations of the boards are available online.

Thank you. I just want to dwell on this for a minute or two, because I have a few questions. This temporary accommodation issue is so critical; it is absolutely in the critical path. Clive, I think you have some questions about that.

Yes, I have—thanks, Chair. The last information we had was that the temporary accommodation in Richmond House, which is essential for the House of Commons element of the work, may not be available until 2034, which is outside the seven-year programme for the first part of the works. That is not acceptable, is it?

Just to be clear, the works that would be happening in phase 1 do not require any decant. Those works could progress irrespective of the availability of the Northern Estate. In terms of the broader Northern Estate question, you are absolutely right that the proposals laid out in the report assumed, certainly for the full decant option, that there would be a full decant starting in 2032. We know that that is no longer possible because of the changes in the timeline to the Northern Estate, so what we have done is work really hard to mitigate that and now move to more of a phased approach to the decant. The first important point is that 40% of the floorplate of the Palace is House of Lords-related. Our plan is to progress, subject to Parliament’s decision, the QEII programme. That would allow the House of Lords to decant, and it would give us significant footprint within the Palace—assuming we went down this full decant route. I should probably say that it does become a bit easier under an EMI+ scenario from a decant perspective. In the Commons end of the building, moving to a phased decant would effectively stage the Commons decant, subject to the availability of Northern Estate accommodation. Rather than a big bang departure, you would get at least two departures, depending on when the Northern Estate accommodation is ready. What we are now doing with the latest changes to the CBIP programme is reconsidering that analysis and what that phased decant would like, and that would certainly be a very early priority for the phase 1 works.

It is not a great start to such a major scheme, is it? We are already beginning to adjust the timescales to fit in with the temporary accommodation arrangement, which we have known for some time was going to have to be delivered. There have been references made to the constrained nature of the site, and I understand the problem, but the site has not just suddenly become constrained, has it? This issue has been talked about for the last 10 years.

It is a well-understood issue, and it is very high up our list. We have consistently flagged the risk of that interface. The Delivery Authority is accountable for the QEII accommodation. That is on track, but subject to Parliament getting on and deciding the timetabling of the debate. The key risk of QEII is around the debate timing, and I am very happy to return to the implications of that going late, if that would be helpful. On the Northern Estate side, the Delivery Authority is attempting to mitigate as proactively as possible what is effectively an external dependency for the R&R programme.

There are two issues there that need to be raised. One is the fact that different bodies are now responsible for the programme. It is never ideal in major contracts that run on for some years to have split responsibilities. Would it not be ideal to have everything under one responsibility?

I can inform you that the Commons Executive Board will meet this afternoon, and part of that conversation will be around the Commons building infrastructure portfolio, and whether it should remain as is or move over to R&R delivery and accountability. It makes the recommendation that nothing should be decided before the debates, because we have to have the certainty for what is going ahead with the R&R programme—again, it is constrained by the debates. There are pros and cons either way. We should be clear about whether anything should change. You are right to say that this is not a new programme. I was just looking at the timeline; a programme to refurbish the Northern Estate was agreed in December 2015 and that programme was closed in November 2020. Our colleagues in Strategic Estates are doing exceptionally hard work to rebuild a programme, move forward and ensure that the Northern Estate is refurbished in its own right and able to accommodate whatever it needs to from the Palace as a result of R&R.

Haven’t you both got concerns that, despite the essential nature of this work, the timescale has already slipped, and there is no guarantee that it will not slip again? That 2034 might become 2036.

We will always have to consider that and make sure that we have mitigations in place. This programme has a lot of contingency built into it. It is a complex programme in its own right to restore the Palace, and then you add in the dependencies and the decision making. It is a complex programme, and we will always have to consider the potential risks and slips along the way.

Part of our strategy is to build the programme in as flexible a way as possible to mitigate what might happen in the future. I do not think that it is unusual for a programme of this scale to have a big external dependency—certainly, the last couple of programmes I have worked on have had big external dependencies. As ever, there are lots of unique characteristics in the way Parliament works, but with good interface management in place it should be possible to accommodate the two programmes being interdependent in the way that they are. That is certainly the way in which we are approaching the problem.

But it might be changed.

It might well be changed. Regardless, we are currently proposing, as part of the governance review as we move into delivery, to consolidate all the official-level governance into one group called the technical board. That was advised by the independent panel, and that seeks to bring together senior officials like me and Russ, the managing director of the Strategic Estates team and the two House sponsors for their respective temporary accommodation to make sure that we have the right people in the room to look across the integrated schedule, understand the risks and consult one another on changes and trade-offs to make sure that we are all moving forward together in the longer term.

We will probably come back to the governance arrangements in due course. On the issue of the temporary accommodation, you mentioned that it will be easier to manage it if the full decant option was not chosen, and more challenging if it was. In either scenario of the two options, will the temporary accommodation still be built to the same standard?

Yes. I will talk about the House of Commons first. As part of the consultation internally, the presentation to domestic Committees up to the House Commission last summer talked about the level of ambition for the temporary works and the wider works on the Northern Estate, and they agreed the level of ambition to achieve all parliamentary standards. They are set to ensure that Parliament can continue to operate as planned. As I said, if it is a full decant, you will be provided with a replica Chamber and the requisite services that you need to make sure that your jobs are as effective as they can be. In Richmond House, the plan as currently set out provides a replica Chamber, Galleries and Lobbies on a temporary basis. It will be a replica; as I said, otherwise it is a space for contingency. It provides offices for I think 336 Members’ staff and 167 Members, and it provides a Members’ Tea Room. It provides the facilities and services, including procedural services, that you need to do your job, at a level that is supportive and sufficient for running parliamentary proceedings and Members doing their job.

Charlotte, there is a rule somewhere that the size of that Chamber would produce 50 fewer spaces than the current Chamber. Is that true?

That work is ongoing. With all these programmes, they continue to refine their design as they go through the different stages. It is true that the proposal for the temporary Chamber as is has, I think, about 30 fewer seats; we have reduced it down, and there is work ongoing to see if that can be reduced further. What the replica Chamber would provide is much more accessibility. There would be quite a significant increase in the number of mobility impaired people able to operate more effectively in the Chamber. Work is ongoing to try to continue to bear that down.

I have just one final point. Recently, the Chair, Sarah Olney and I went to Canada to look at their work on refurbishing their Parliament. They obviously have temporary accommodation in place now, and they said to us, “It’s not just about the services and the functionality; this building will be the country’s Parliament for a period of time.” It is not just a temporary building; it is the Parliament. If it is going to be the Parliament, it has to look like a Parliament and feel like a Parliament. Has that message got through?

That message has definitely got through. We have only ever been designing for something that is fitting for the home of UK Parliament. We have previously had lots of suggestions put to us, including temporary Portakabins. We are not going down that option; we will provide something that is fitting for UK Parliament. When I say, “the ability for Members to do their job effectively”, that is exactly what I mean. Obviously, our core purpose is to make sure that parliamentary proceedings can run efficiently and effectively.

That is reassuring. It is really important, in terms of trying to take Members along the right path of this, that that information—indeed, some consultation about it—is built into the programme. That is what the Canadians found as well. The things that most exercised Members were not the big contract discussions; it was what the building actually looked like and how they were going to operate in it.

Absolutely. I came from a meeting yesterday with the accommodation Whips from the three main parties. That is part of the consultation at this stage as we work through the commission. The House of Commons Commission talked about that last month. They are talking about it again on Monday. Once we get through that, we will start much wider Member consultation and start to show you the designs, being careful to make sure that people do not think we are gold-plating things. We are not trying to gold-plate things. We are trying to make sure that you have an effective working home.

We have a lot to get through, but this issue of temporary accommodation is really important, so I have one or two questions. Can we start on the QEII centre? Is it true that Government and House of Commons lawyers are arguing how this is to be done and racking up fees?

No; that is not true. We are engaged in conversation. We are working really collaboratively with the Ministry of Housing, Communities and Local Government, facilitated by the Cabinet Office, to work out what the terms of any acquisition would be. We have been given access to the QEII, but we recognise that it is a working establishment, and until such time as the Houses make a decision on what they want to do, that remains a conference centre operating as it does. There are not huge, unnecessary amounts of money being spent. We are following due process to understand how to acquire the building in the most efficient and effective way for the UK taxpayer.

Why is the word “acquired” always used? There are plenty of alternatives, such as leasing it. “Acquired” implies quite a lot of money, and the rumours have been about it costing £400 million to acquire it. I do not know whether that is true and whether you want to comment on that for commercial reasons or not, but it seems a great deal of money.

We use “acquire” because we are not looking to lease. For quite a long time now, the conversations with the Ministry of Housing, Communities and Local Government have ruled out leasing. We are looking to acquire, and I would imagine that is partly because, whatever happens, we need that building for quite a long time. The lowest time estimate for use of that building as a temporary accommodation for the House of Lords is about eight years. It is a long time, so we are looking to acquire. The acquisition cost would be nowhere near £400 million. We have commissioned a red book valuation as part of those conversations. What might be getting confused there is the estimated fit-out cost, which, as I talked you through with the phase 1 works package, is about £470 million. The acquisition cost is lower. Part of the conversation about acquisition would also include whether it was better for the UK taxpayer for us to transfer the building rather than circulate the money around. Those conversations are ongoing.

However you do it, it is basically all one pot—Government and Parliament. Why has the lease option been ruled out? It is perfectly possible in a commercial context. I am a commercial man; I understand how these leases work. You simply take a comprehensive schedule of state and condition at the beginning, you lease it for say 15 years renewable year to year, and at the end of it the Government would have the power to require you to put it back to how it was or something similar.

It was a ministerial decision not to offer a lease. I have said that I presume that is on the basis that parliamentary use would be for a significant amount of time. I imagine this was not part of the consideration of the Ministry of Housing, Communities and Local Government, but there are also opportunities for Parliament to use that building in the longer term, particularly from a Commons perspective, to consolidate other office accommodation we have outside of the Estate that you will know about.

It is very useful to have that on the record. Going back to Richmond House, as a commercial person I am slightly struggling to work out how you are going to do that refurbishment if this problem with the MOD car park cannot be resolved? Can you site a tower crane on our existing Norman Shaw area in which to carry out the refurbishment on Richmond House? How will you do it?

I am no expert in this—my colleagues can provide you with a note afterwards—but the alternative we are looking at is to use an area for logistics outside on Whitehall, and to provide welfare accommodation alongside Richmond House, on a little strip of land that we own. There is a mixed approach. If you want the details, I can get a note for you.

If it is part of the critical path, it would be useful to have a note, please. That would be very helpful.

On the EMI options, rather than the full decant, what other changes are there in the phase 1 works for the two alternatives, or will everything essentially be done in the same way for both options on phase 1?

The concept of phase 1 is predicated on an assumption that it will be possible to converge the designs. As you know, we did not develop the EMI options, but we took possession of the materials around EMI in February, and we have been going through a process of due diligence to understand those proposals. One of the first things we would do in phase 1 is look at how we could converge those two solutions. An important point is that the end state of EMI is the same as the end state for full decant; it is just that the method you use to get there differs. For the first seven years, it should be possible to converge the way you do that, so that you get a common core—certainly up to 2030, by when we would expect Parliament to have decided exactly which option it wanted to pursue in the longer term.

In the report, we see that some uncertainty remains about both costs and schedules, but that uncertainty is greater with the EMI option. Russ, could you talk us through the key assumptions underpinning your current cost and schedule estimates for the main works? How might those assumptions change as the programme progresses?

There are two parts to the answer. First, at a granular level, we have 40 client requirements and about 100 requirements that sit below that—those are things like standards and other things that define the programme. To some extent, they are a set of assumptions. Layered above what we want to build, we have touched on three key assumptions at the moment. One assumption is about when the debates happen; clearly, we do not know. We had planned for that to be by the Easter, and then planned for it to be by the summer. Obviously, the Commons rises in a week, so the window of opportunity for that is rising, and we go through, we believe, quite a significant inflection point over the summer: the consequences of not having clarity by that point start to increase. The second big assumption is around the availability of CBIP, and we have obviously spent quite a lot of time talking about that.

I beg your pardon; the availability of what?

The Northern Estate programme, or Commons building infrastructure portfolio. The third assumption, which is slightly distinct from a requirement, is that the Client Board’s recommendations take forward two options, and that is what we end up doing through phase 1—but until Parliament takes a view on that, it is difficult to be absolutely clear. Those are the three big variables beyond the slightly more requirement-orientated elements.

It is MPs’ ability to make a decision, the availability of the alternative accommodation and whether you move forward with two options or three—is that what you are saying?

Parliament could choose whatever it wants, from taking forward a single option to, presumably, taking forward all four options or an option that we have not set out.

But those are the critical things that would change the cost estimate.

Yes. Sat here today, those are the things that have very significant effects.

We are due to get the business statement for next week any minute now. Presumably we are not expecting to see a restoration and renewal debate next week, which means it will be the first two weeks of September at the very earliest. Can you give us a sense of how that delay might impact costs, perhaps in percentage terms?

Sure. If we do not get a debate by the summer and we get one at some point before the end of the year, we have ranged the cost—these are indicative estimates—at between £220 million and £290 million, including inflation. The reason is that there are two big items on the critical path. One is our ability to progress the QEII programme, both the acquisition that Charlotte talked about and getting on with the QEII procurement to get contractors on board to fit it out. Importantly, we also need to engage with Members of the House of Lords to confirm the design. Our design programme is progressing, but we need to be absolutely clear that what we are designing meets our customers’ expectations. Getting that information late in the design process would obviously be very unhelpful. The other big item on the critical path is our ability to progress procurement for the main Palace works. We feel we are ready to go—in fact, we would like to launch that over the summer—but it would not be sensible to progress until we had absolute clarity on what Parliament wanted to do.

To follow up on that last point, why can you not start some procurement? There must be some elements of the work that are going to happen whatever option is taken.

There is a parliamentary answer to that, which is that you would be putting the cart before the horse a bit. There is an argument that you might be prejudging whatever Parliament decides. From a slightly more technical perspective, we are not convinced that the supply chain would take us particularly seriously if we tried to launch a major procurement, which would involve very significant bid costs for the people we would expect to interact with that procurement, unless we could demonstrate a really clear signal from Parliament that this was a project it wanted to proceed with—on the basis that it wanted to proceed. Those would probably be the two parts of the answer, but I do not know whether Charlotte wanted to add to that.

No, that is fine.

You have probably just described phase 1, because that is the entire ethos behind it. It is the first chunk, if you like, that is common to all the eventual outcomes.

We have maximised what we can. Ultimately, the Houses do not have to be asked to proceed with phase 1 works, but the boards and the Clerks—the Clerk of the House and the Clerk of the Parliaments—who are accountable for this, want and need Member buy-in and for Members’ views to be heard before taking it forward. As part of the pre-construction element of phase 1, a significant proportion of the work is on how to bear down on costs. Again, it is a bit cyclical, because we will start that, but we will need the strategic procurement partners on board to take that forward. As you said, we want to use the expertise of the market to do some of this, so it is a bit circular. Ultimately, we need the debates because we need to hear what Members want and, as Russ said, the market needs that certainty as well.

I am going to ask just one more question and then we will have a break. I totally disagree with it, but there is a body of opinion in the House that does not want anything to happen. Can you set out for us—pretty starkly—what you will be faced with if Parliament does not approve phase 1 of works?

From an R&R perspective, R&R as a programme is established under the 2019 Act and the Delivery Authority is also established under the 2019 Act, and they are here until they finish the works to restore the Palace as a whole. That is required under the Act—restoration of the Palace as a whole—unless that primary legislation is changed. One way or another, we need debates in the Houses and we need the Houses to make a decision. That is the stark reality of the R&R world. We will continue to spend on this programme until such time as Members tell us what they want to do with it. Obviously, we will bear down on costs and do whatever we need to do. However, I just want to set that in context. I think your wider question was what happens to the Palace. It says in the report quite clearly that we will have an expensive managed decline of the building. Colleagues work tirelessly every day in the roof spaces—currently boiling hot, I am sure—trying to sort out all the air conditioning or ventilation that we have in order to keep this place running. It is an increasingly difficult job for colleagues to do that and it will become more expensive. We cannot put a figure on that; we cannot put a number on that. There has been lots of talk previously about a catastrophic event, but we have a number of very competent people working across this building—indeed, across all our Estate—so that is unlikely. The impact would be significant obviously, but that is unlikely. What is more likely is attritional risk. I talked about the ventilation. I think one of your colleagues had a leak into her office this week. When we had the last heatwave, we had significant surface water flooding, both in Peers’ Lobby and on some critical equipment, as well as it being quite intolerable to work in this building. It is the attritional risk that will be more difficult. I think the Clerks have both been here—certainly the Clerk of the House has been in front of you before, and has said quite clearly that ultimately the decision on whether it is safe to allow staff to work in the building is his. Members can choose to continue to turn up. We have no authority to prevent Parliament from going ahead and we will continue to do absolutely everything to make sure this place can continue to run and run safely, but it will be increasingly difficult and expensive to do so.

It is really important to get on the record what you have just said. I am conscious of the remarks made by Andrew Makower, who is a former House of Lords Clerk. On a freedom of information request, he got details of what I thought was quite an alarming number of health and safety incidents relating to the House of Lords. I think that part of the problem we have now is that too much of the proceedings relating to this whole R&R project have been conducted in private and have been not fully transparent. Can I ask you this morning whether you would publish—or send us a note and we will publish—a full list of all the health and safety incidents in the last 10 years in both Houses? I think that is a very powerful argument for proceeding with this whole project. If there really is a risk to people—to all of us in the Palace—then I think the public need to know of that.

I can take that away. It is obviously not in my bailiwick to do that, but I can take away the request and get that fulfilled for you. As I said, it is often the attritional risk that we are looking at, so it is about things failing. Some of them might have a health and safety element to them, but otherwise they are things around the provision of services to the Palace itself and keeping it running.

That would be really helpful. Thank you. We will take a five-minute break. Sitting suspended. On resuming—

Welcome back, and thank you to our witnesses. We will start with Sarah Hall.

I would like to revisit governance, as we have not touched on accountability yet. Where does the overall accountability for programme delivery sit?

Our governance is complex; we are a complex programme that covers two Houses. The 2019 Act on R&R set out the accountabilities and responsibilities, and it allocated accountability to the Clerk of the House and the Clerk of the Parliaments. Part of their statutory responsibilities is to make strategic decisions about this programme, which puts them in an invidious position. However, the Act goes on to say that Members of both Houses need to agree the costed proposals—that is, the final way forward for this programme, including its funding envelope. Just to be clear, the accountability sits with the Clerk of the House and the Clerk of the Parliaments, as corporate officers for the two Houses. Delivery itself is done through the Delivery Authority, which is responsible for carrying out those works in line with the requirements of the Clerks. That is how the accountabilities and responsibilities cascade. Both Clerks are the principal accounting officers for this programme, as you would understand, and Russ is the accounting officer for the Delivery Authority spend.

So there is not one individual but several.

There are the two Houses, and we therefore have the two Clerks accountable.

How do they differentiate the decisions they make, which Parliament then has to approve? Is one strategic?

The decision making itself puts the Clerks in an invidious position, as I said. Of course, they have to listen to Members and to your Parliament—it is our Parliament, but you are the elected Members—and so our governance exists to have Member-led boards, which are therefore advising and supporting the Clerks in fulfilling their statutory obligations. As I think I set out before, the top level of the boards and groups structure is what we call the R&R Client Board, which is the two House Commissions meeting jointly. It then takes those strategic decisions and makes recommendations to the Houses, and it is the board’s report that will soon be hopefully debated in the Houses. The Client Board has delegated day-to-day oversight to the Member-led R&R programme board, which again has Members from both Houses, as well as four independent experts across a range of skills, all of whom have major programme experience. The Clerks, because they are accountable, sit on both boards. The decision-making governance sits around the accountabilities that are set out in the Act.

It sounds like a lot of people are involved in this, and trying to co-ordinate all of that sounds like a challenge in and of itself. How will the governance deal with delays caused by complex decision making and unclear responsibilities? How will people be held accountable?

The governance structures that we currently have in place were set up to get some strategic decisions from the Houses, or to effectively get these debates. The structure was reset in 2022. The original proposal was that the sponsor function should be independent of Parliament. It had Members on the board, but it was decided that it was too far away from Parliament and the Members who have to make decisions under the Act, so it was brought back in-house. We have had assurance on our governance structures. We are looking to review them, but looking backwards, it has been determined that our governance has been appropriate and is much better at the moment. I get that there are a lot of numbers. Putting together two Commissions is a big thing. It has pros and cons, but it is helpful for us to be tied into existing governance structures in two Houses. In terms of accountability, accountability rests with the individuals, so it is back to the Clerks, but the boards support the Clerks in making those strategic decisions.

This is maybe a question that you cannot answer, Charlotte, but it would be interesting to have a view, if you can. It strikes me as slightly incongruous that the accountability is with the Clerks. Their primary job, in my 34 years in Parliament, has been to make sure that Parliament functions properly; they advise on all matters of procedure in relation to Parliament. It was never, certainly when I first came here, a major part of their work to have legal responsibility for the maintenance, let alone a huge R&R project. I am wondering—this may need an Act of Parliament; I do not know—whether, given that the project is so large, maybe after phase 1, having one senior programme manager would be a better alternative to the Clerks having legal responsibility for the whole thing. That senior programme manager—call him or her what you like—would have legal responsibility and would account to the Client Board for every aspect of the project.

I am not sure how long you have been in the House, Sir Geoffrey—a lot longer than me.

Thirty-four years.

I think it was in the 1990s that maintenance of the parliamentary Estate came over to Parliament. Before that, it was part of the Government Estate and we had a different arrangement. Since then, it has been up to Parliament to maintain the Estate. In terms of the Clerks’ responsibilities, I am sure they would be better placed to provide you with a note on what their accountabilities and responsibilities are or have been over time. Since I have been here, which is about 17 years, their responsibilities have always included the corporate officer responsibility and the accounting officer responsibility—obviously, for their respective Houses. They always work jointly, because beyond where the Palace is conveniently split between red carpet or green carpet, for everything else it does not matter which House you are supporting. There are systems and services that cross regardless of the colour of the carpet. Moving forward, we could look at whether we could have one senior programme manager, but ultimately, we are still going to need to connect in and work with the two Houses through the Clerks. I am not sure how it would work, but we can certainly take it away and look at it as part of the governance review. At the moment, our governance review recognises that if the Houses agree to this recommendation for the phase 1 works package, we will want to get momentum and start to move into delivery, so we will need to have a bit of a step change in our governance and the agility of our decision making. That current plan, looking forward still, seeks for the corporate officers to retain the accountability under the Act.

The rationale behind my question was that it would not be during phase 1. Once the vote had taken place in 2030 and we had a settled proposition, we would be in a different territory and would know exactly what we were doing. The governance we have now is not necessarily the governance we need when we have got into that settled state. I am going to ask the Comptroller and Auditor General to comment in general terms on how big projects like this are managed elsewhere.

There are lots of different arrangements, depending on size. The obvious big one is HS2, which this Committee scrutinises regularly, where the accounting officer is the chief executive of HS2 Ltd. The accounting officer for that programme is accountable themselves to the Department for Transport accounting officer, who is the permanent secretary. There are models that have these nested arrangements, which could be adapted.

That is very helpful. That person would be the accountable officer, and they would be legally responsible to Parliament for the project. You have said that that could be taken away.

First, on the EMI option, that was brought in late in the day. Are you having to work harder and do more work to get that up to speed and take it forward as part of the phase 1 works?

As I think we touched on earlier, EMI is at a lower level of maturity than the other two options of full decant and continued presence. There is a relatively industry-standard scale of maturity—the Royal Institute of British Architects stages—and full decant and continued presence are at RIBA stage 2; EMI is at RIBA stage 1. That means that some of the technical feasibility things that you would resolve during the second stage have not yet been resolved for EMI, so there is a greater range of uncertainty in that scheme. That is one of the reasons why there is a much more significant allocation of contingency for EMI; the other reason there is a more significant allocation of contingency is that it is clearly a more difficult job to do in that way—working around the business of Parliament. Those are the two reasons why it has much greater levels of contingency.

Just in terms of why we have phase 1 at all, and why we split it, we have been talking about this in Parliament for a long time. We have had so many reviews, reports and considerations. What will we know in 2030 to make a final decision that we do not know now?

In terms of what we will know, we will have effectively taken all the designs another stage further forward, submitted to planning and continued our survey programme. Those three things together will better articulate and understand the key risks on the programme. There will be a better understanding of the building and better granularity of the design information, which will allow us to put more certain cost and schedule estimates around each option. Parliament will then have narrower cost and schedule ranges and more certainty. Could you make a decision now? Absolutely, but equally, you could wait. Both are legitimate choices.

In your heart of hearts, do you think that deferring the main decision for five years is going to make any difference?

It is difficult for me to comment, but at least the people who are most likely to be affected would be here—that would be one perspective.

It is a bit of a political question, really; you are just given the brief, and you have to do it.

And that is true of the DA. Phase 1 works is a really pragmatic way to get momentum on this programme; we believe it follows emerging best practice around some of the other mega-programmes that are going on that have gone too fast towards construction without fully understanding their risks, which is what Russ was just talking about. We think it is aligned with emerging best practice and it is a pragmatic way to get moving. Again, I reference the NAO’s excellent Report, which says it is a very sensible way forward.

What you are really saying is that once phase 1 is under way and done, you must do phase 2 in some form.

It is foundational. We are not moving away from that.

You are on the treadmill.

The Act requires us to restore the Palace as a whole. That is the treadmill that we are on.

I think it is important to untangle the two things that will be decided in 2030. One thing is the next investment decision, and as Charlotte said, it would absolutely be best practice to commit to a programme incrementally when you know more. The second thing that will be decided is this option down-selection, and I think that that is a slightly different decision that you could take now or later. We have been very clear from a delivery perspective that the quicker you can down-select the better, and that there are consequences to keeping options open. But equally, I completely respect that that is a choice and a matter for Parliament, and I understand why it has been decided to keep those options open.

Russ, I have a question on clarity. Assuming that, in 2030, we do have this vote, you will then have a clear instruction of what Parliament wants out of the two options. How long will it take you from then to start the main project?

It depends on what you define as start.

I suppose the start is to let the contact.

We plan to let contracts in phase 1 that will persist through the life of the programme for the design and the programme arrangements. We are considering what the right approach is for the more construction-orientated aspect of the programme. Once we have greater clarity about what is in phase 1, we will know the answer to that.

That is a bit “How long is a ball of string?”, because you will let the design—I listened to your words carefully there—but we do not know how long it would take before you will then be able to let the full contract for the works to start. What we are interested in is, at what point do we see shovels in the ground after the vote in 2030?

I would define the start of main construction as the point that the first big decant happens in a full decant scenario. We talked earlier about the QEII proposition. The aim would be to complete the QEII in 2032, and as a minimum, we gain access to 40% of the Palace floorplate through the House of Lords departing. Clearly, that is one variable that is quite significantly affected by whether you end up going for an EMI option or a full decant option. In an EMI scenario, it is a slightly less acute cliff edge, but if you were to try to attempt to define the start of main construction, I think 2032 would be a sensible place to start, but it is a slightly greyer area.

Is that realistic when you are getting an instruction from Parliament only in 2030?

Yes, because we expect to run the procurement activity during phase 1. We are not seeking to price the job up front. We are seeking to bring in a long-term partner that will work with us through the job, and as and when individual packages of work have been developed to an appropriate level of maturity, we will pass those packages to our pre-selected supplier or suppliers, and we will be ready to do that when we exited phase 1.

On that business of a supplier or suppliers, how do you intend the main body of works to be let? Will it be let to one leading contractor who will subcontract bits of it, or will you have different contracts for different bits of the works?

Part of the reason why I am hesitating in my answer is that what we want to do first is bring on our programme partner as quickly as possible and work with our programme partner to develop exactly the strategy that you have laid out. It is also very difficult to settle a firm commercial strategy until you know exactly what it is that Parliament has decided to do. We have a number of variables, not least the need for some debates and some clarity about what the job is. Once we have settled the answers to those variables, we can revisit our commercial strategy and confirm it.

Okay. Let us now move on to the really important subject of governance.

I suppose it is natural that any major programme will, and should, look at the governance model over the different phases of the programme, so we are just doing what we should be doing. We set up the governance for this strategic decision-making stage. The costed proposals report says that we will undertake a governance review. That has started, but the Client Board’s view is that it needs to hear the decision from the Houses as to which way they want to take the programme before we confirm what those changes are.

We are looking at the governance review in the light of the recommendations, and the recommendations are that we move forward with the phase 1 works and then have another strategic decision in 2030. The governance context in phase 1 is a mix of delivery and continuing strategic decisions. We therefore have to get the balance right between getting timely decisions for us and the delivery side to move on—which means making decisions at the lowest level, with clear escalation routes and thresholds—and the need to ensure that we have high levels of Member engagement and involvement, because those strategic decisions are coming back down the line. That is the balance of it. If the Houses decide not to do that and to move straight forward and take the full decision now, that is a very different prospect. That is jumping straight into delivery, which means that we would need to look again at what we are proposing. So the review is currently predicated on what is recommended—and why wouldn’t it be?—but the Houses need to have their views, and the motions in both Houses will be amendable. We really need to understand, and then we will build on it.

Yes, and to move very quickly into that. It is not that we are going to spend seven years navel-gazing; we need to get on with it, but we need to really understand the direction that the Houses are going to tell us to take. Broadly speaking, we had an independent advice and assurance panel advise on what the governance should look like in this next stage, recommending phase 1 works. They saw a lot of good in what we currently have and have recommended an evolution of the three-tier model that we already have. Again, that means using the two Commissions to work together as the Client Board. One thing I would say as an official is that it is absolutely essential that we retain bicameral governance for this programme. That is something that our Canadian counterparts struggled with at the beginning, so it is critical that we manage that. There are also huge benefits in us linking into the existing governance of the two Houses, as I said earlier. At that level, recognising that Members do not have the time to get into the detail, we would then continue with a programme board that would provide oversight and scrutiny of the detail, and then a consolidated official-level group. As I think I discussed, that consolidated group is about having the senior officials who are involved in R&R and the business-as-usual programmes, and making sure that we have a more agile group, informed by a refined integrated schedule, with the correct delegated authority to make decisions at the lowest level, in order to facilitate the delivery decision tempo that we need. Critical to that is working out what the escalation thresholds are because, ultimately, we need to make sure that there are no surprises for Members, and that Members are involved where they need to be involved in those decisions. All of that needs to be worked through.

We are definitely not. Sorry, I meant to assure you that we are not doing that.

The ambition is that, as soon as we get the debates, we confirm back to the Client Board the recommendations for the governance in the next phase. If we have the debates before the House rises—

Yes. If we have the debates next week, we will be working to refine that over the summer recess, and we will come straight back to the Client Board to get that agreed and moved forward.

I can just tell you the conversations that have been had at the Client Board, and the recommendation that we have had that those will not be confirmed until after the debate. If it reassures you, the governance is an evolution, not a revolution. The phase 1 works are an evolution, as I have described. As we move into phase 2—the main works—we will be in full delivery mode and we would need to reconsider the governance arrangements. But, as I have said, as we move into phase 1, we are moving into delivery and we also retain the strategic decision making. It is an evolution, not a revolution.

Sorry, what I meant by that is that the programme needs to get a further decision in 2030 from the two Houses.

As we move into the main works and full-on delivery, we will be back with different governance arrangements. In a major programme cycle, there are different phases, and your governance should suit the different phases that you are at. We have been in the policy stage for a long time, and that is what our governance is set up to deliver. We will eventually move into full-on delivery, which we call phase 2 under the Act. Phase 1 is essentially moving into delivery, but also retaining an element of decision making in the Houses.

Again, at an official level, we are consolidating trade-off decisions to senior leaders—me, Russ, the managing director of Strategic Estates and the two House sponsors for the temporary accommodation. We would be looking at those trade-offs and making decisions. We need to have very clear delegation levels so that we have clarity about when we need to escalate up to the Clerks and then on to the member boards.

I have a version of that group. It would be resetting that group. We have all the underlying support mechanisms, so we have an integrated schedule, mapped dependencies, and risk and issue logs. We have all the underlying information; it is just resetting to make sure we have the correct—

It depends which decision we are talking about. If it is, say, the colour of the carpet in the Chamber—

That goes back to who is accountable overall. I will say again that, under the Act, the Clerk of the House and the Clerk of the Parliaments are accountable for the R&R programme.

We are looking at the optimum; we are looking to optimise the governance. As I said, going into these phase 1 works, we are looking at an evolution. We are working on the basis that, as set out in the Act, the Clerks will continue to be accountable for this programme and there will continue to be opportunities for Members to be engaged with that. When we come back to move into full delivery—phase 2—the Clerks will be required to come back to the Houses with a proposal that the Houses need to agree again.

That is 2030. That is the next decision point.

That will be the full delivery governance arrangements, yes. I am sorry; I feel I have confused you. We have different phases of the programme—

No, I think you have done very well, Charlotte.

Catherine, I think Charlotte has made it quite clear how it will work. When we get to 2030, we will be in a much more settled state because Parliament will have given the officials and everybody an instruction, and at that point we will have decided what the new governance arrangements should be. I largely agree with pretty nearly all of what you have said, Charlotte, but I have one or two refinements to it. First, I totally agree with you that we need this bicameral governance. That is absolutely critical, so the Client Board is absolutely critical. The only refinement is that I would have it chaired by a supremo who will be the supremo for the project. They will be the one promoting the benefits of the project, and should be a really senior, well-known figure like an ex-Prime Minister or somebody. Secondly, I think Parliament has to get into a different mindset after that vote in 2030. It is going to happen, and therefore they have to get into the mindset of being the client, not the deliverer. You people are responsible for delivery; they have given you an instruction, and you must get on with it. They cannot be there watching you put every brick or dig every shovel full of earth all day long every day. They just simply cannot do that. I do think that present governance will need to alter—I have no doubt about that—and I would suggest that below the Client Board you have a new joint Select Committee of both Houses. Part of the present problem with this project is that too much has been done in secret and without involving the public. That Select Committee would do precisely what we are doing now and have sessions in public, and would be able to put questions to witnesses. It is much better if we involve everybody, and I just don’t think we have been doing that well enough. There you are; there are a few ideas.

That is really helpful. If I can just explain what I mean, as we move into phase 1, it is evolution of the governance; as we move into phase 2, it is revolution, so more of what you have described. That is where we will be looking, because we will move full on into delivery, and of course the Delivery Authority needs absolute clarity and timely decisions to bang on and deliver whatever the Houses tell us to deliver.

To give you a bit of challenge, I think it is important that whether it is the present IAAP—whatever the initials stand for—you need a team of outside experts to keep challenging you on the delivery. There are three phases: the client, whatever comes below that and then the challenge board. That is how I would see it.

I have a couple of quick questions on the risks of delay. I note the estimate in the NAO Report of £320 million to £420 million per year of delay. Is that robust? What specifically is driving those costs?

I can talk about the robustness of it; I don’t know whether you want to come in after that, Russ. In terms of the robustness, we had those costs assured by the independent advice and assurance panel, which thought we were actually underestimating. We were very clear on being as robust as we could be in presenting those to the Houses. Russ, do you want to talk to the detail?

I think it is robust, but I think it is also indicative. It is very hard to answer a hypothetical question as to what a year on the end of the programme would actually end up costing you, because when does that year land and under what sort of circumstance? I would see it as a rule of thumb that is useful for the purposes of scenario planning. It allows us to test certain scenarios, like the debates being late or different risks materialising. It is something that we have triangulated from lots of different sources. As Charlotte said, we have had independent people look at it and confirm that it is reasonable, but I think it is a tool for scenario planning rather than a cost in the same way that you would normally present costs.

What kind of things are we talking about here?

The majority of that cost is inflation.

Yes, the majority of the cost is inflation, and then there is obviously an overhead to running the programme. If the programme runs on for longer, you have a Delivery Authority to run and a Client Team to run, and you are injecting additional risks into the programme, because of the ambiguities that you put into the next phase. It is those sorts of items.

And the last remaining item is additional maintenance costs, but the vast majority of that is inflation.

What impact could any further delay have in terms of supplier confidence, competition and value for money?

We are nervous about supply chain appetite. As we have reflected on elsewhere, this is obviously a programme that has had a series of false starts and we are keen to get going; we are ready to get going. It is a risk that is quite hard to quantify. What we have said is that we can hold the schedule that we have set out, albeit with some cost consequences associated with that. If we get debates by the summer, that feels unlikely to happen. There is then a period beyond the summer, up until December, where the cost consequences start to get relatively significant. There is then another crunch point around the turn of the year, where, again, there is an uptick in the scale of the consequences if we have not got decisions by then.

Can I commend again to you to run until you get the vote in 2030 with more than one supplier, and include in the vote who the suppliers are and what they have quoted, so that the whole thing is fully open? We want to avoid any accusations of cronyism and show that you have carried out a proper procurement exercise. That is more of a statement than a question; it is probably something that you need to think about. We have covered a lot of ground today. One of the other things that occurs to me from your evidence is that you might need to change the Act. Can you explain under what circumstances you might need to change the Act? It seems to me that the Act is actually quite good and was quite far-sighted in what it did way back in 2019.

I think that the costed proposals report indicates that the Client Board foresees that there might be a need to change the Act, but we have not done any specific work around that, on the basis that we really do need to understand what the direction of the Houses is before we would consider any of those changes, because they would have to be made through primary legislation. There are a number of reasons why the Act could be changed. We have talked about governance and accountabilities; if the accountabilities were to change, the Act would need to be changed. The Act sets out who will be delivering the works; if that was to change, the Act would need to change. The phase 1 and phase 2 arrangements are set out in the Act—what work can be undertaken until such time as the Houses make a decision. That would need a change. We have looked at this programme in phases; we are obviously recommending phase 1 works. To go forward with any more phasing within the programme would require the Act to change, because at the moment the Houses are there to agree the full package of works under one funding envelope. If the Houses wish to look at it in more of a packaged way, that would need the Act to change as well. There is a huge number of things, but ultimately it is primary legislation that would need to be changed.

Is that another one of the critical path problems? You get to the 2030 vote and the House decides on something that may not be in conformance with the current Act, and you then have to go through all the parliamentary process of changing the Act. How is this sequence going to work?

You would like to think that there would be the will of the Houses to change the legislation if they made the decision to do so—

Of course, but I am just asking you whether—

But we would obviously have to go through the parliamentary processes and primary legislation, and the Government would need to find time for that. There is absolutely an element of time required to do that. It is not currently on the critical path, and we would have to understand exactly what changes were required to work out how difficult or easy that would be.

You will be glad to know that this is my final question. Assuming we are going to get that vote in the autumn, what engagement with Members of Parliament will you be doing between now and then? There is a feeling that the costs are vast with these numbers. I know you have a range and you will need to conduct dialogue with the contractors, but what more can you do to reassure Members of Parliament that these are realistic numbers, rather than something that is just on the back of an envelope?

We have engagement plans ready that are scalable depending on what level of notice the Houses are given for when the debates would happen. I recognise that the shadow Leader of the House has asked for at least two weeks. They are scalable from two weeks up to three months, whatever it is. There will be a range of activities within that. We will continue with our current offering. We have just written to all Members in both Houses who have yet to engage with the programme. We have a 100% communication rate. All Members were desk-dropped the report. All Members have received communication. We talk in terms of engagement—real, two-way engagement—and will continue with our tours and our briefings. We will stand up more regular stands in Portcullis House and the Royal Gallery and will find a number of innovative ways to really start to knock on Members’ doors and make sure that they have the information they need. We have been busy listening to views of Members about the things that they need more information on. The Committee talked about costs, and we have provided different leaflets to try and summarise that and make it available. We have one on the phase 1 works. We also have one on the scope, so the outcome level—what will be delivered in the Palace in the end state. The Client Board published a much more detailed report on that last month. We will continue to provide the information for Members. We will literally be knocking on doors to try and make sure that Members have the information available and we will keep pushing the message.

Would it help for me to respond to your question around the costs?

Yes, please, Russ. Before you do, in my mind the information that Charlotte gave at the beginning of the hearing on the breakdown of the costs of phase 1 was hugely helpful. I am not now quite so worried about the costs on phase 1. It is these very big numbers for the whole of the rest of the project in phase 2 that I think are causing some consternation among Members of Parliament.

Absolutely. The first thing to say is that I recognise they are very large numbers, but we do not believe there is a low-cost way of doing it. I am happy to return to that if that would be helpful. A significant proportion of the numbers relates to inflation and risk. If you take them out and focus on what drives the underlying cost, there are three big factors. The first is just the complexity of the building. I am sure you have heard these statistics before. It is very big—there are 1,100 rooms, 4,000 windows and so on. We are obviously trying to do the work around a busy working Parliament. Even under a full decant scenario, the period of decant is only a proportion of the length of the overall programme. Either side of the decant, you are still working around Parliament. Clearly, it is a building where it is sharing all of the same power, water and heating systems. Complexity would be the first factor. The second factor would be just the volume of work involved. Certainly, under the decant scenario, at peak construction you might be touching 4,000 roles. Some of those are very specialist roles. Some of those are shift-working roles. That is a significant factor that relates to cost. Thirdly, it is just the unique context of the programme. We have obviously dwelt previously on the heritage context. It is a grade I listed UNESCO world heritage site. There is very limited logistics access. Parts of the building are very old, and we are working to replace a set of systems that are often life-expired and have not really been touched for 75 years. When you add those three things up, you get to the scale of the programme that we are talking about. We have also benchmarked the programme against other projects, and we are comfortable that it benchmarks well in that context.

Have you had any external assurance? Obviously the NAO has looked at this, but have you had any external assurance on the numbers that you have produced?

Yes, we have a classic “three lines of defence” model. The first two of those are within the Delivery Authority, and Charlotte may want to talk about the third, which is external scrutiny.

We have had independent assurance both on the underpinning assumptions behind the costs and on the costs themselves and, above that, across the whole programme through our normal independent advice and assurance panel. So we have had quite a lot of assurance on that. As well as the costs, there are opportunities from this programme. There is a huge impact for UK business and the skills agenda from this programme. Another thing that might help put this into context is that, if you look at the proportion of construction spend for the Palace, about 85% is on what we call the priority areas that the Houses set in 2022: fire safety, mechanical and electrical systems, asbestos and fabric conservation. It is the remainder that is in the elements that we call “the areas to have regard to”. That is because the Act asks us to have regard to a number of areas. The costs for those include about 3% of the Palace construction cost for security, 5% to 8% for accessibility, less than 1% for visitor facilities and about 2% for education facilities. They are a small proportion. In terms of the level of ambition of our works—this is recorded in the NAO Report as well—the board agreed an outcome level of “reasonably ambitious”. If we were to go down to outcome level 3, so one down, or one up, there is a difference of about 5% either way. Hopefully that puts it into context. Undeniably, those costs are huge. Part of the phase 1 works is trying to bear down on those costs by looking at opportunities. We have started to categorise them as high, medium and low, and we will be working through those with the boards. We cannot take away that these are undeniably large sums that we are talking about, but the information is there to support them. It has been assured, and we will continue to bear down on costs as we move forward.

Can I thank you both very much? This has been a very constructive session. We have learned a lot and you have given us a lot of information, which will be really helpful for the debate in the autumn. Thank you. If we have other questions, we may contact you before the autumn. In the meantime, thank you very much indeed. We will now consider what action we want to take—I do not mean that as any threat: whether we are going to produce a letter or a report, or whatever, to circulate to Members of Parliament. Please keep working on it as hard as you can during the summer.