Amendment 23

Parliamentary Buildings (Restoration and Renewal) Bill - Committee (Continued) – in the House of Lords at 10:15 pm on 22nd July 2019.

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Lord Stunell:

Moved by Lord Stunell

23: Schedule 1, page 11, line 25, leave out paragraph (b)

Photo of Lord Stunell Lord Stunell Liberal Democrat

My Lords, debates today have probably added £1 billion to the total cost of R&R. When we look at we have said about disability, constitutional changes, public engagement and future-proofing, I think that we can forget £4 billion and start to look at £5 billion. All that is in square brackets anyway.

This legislation is not a money Bill; if it were, we would not be discussing it. It is a governance Bill, but how we arrange the governance affects how much money is spent. For example, the opaque governance of the process leading up to this Bill reaching your Lordships’ House has already cost us money, because it could perfectly well have come at least a year and probably 18 months sooner, which would have saved money. If it is hard to see how, perhaps I may say that the index of consumer price inflation in the last year was 1.9% and the index of construction price inflation was 2.8%—more or less 1% greater. That 1% leads to the whole project’s expenditure falling one year later than it would have done, which has cost us £40 million on a £4 billion project—probably £50 million—simply by starting a year later than we needed to. That is before we have a plan or a project on the table. My amendment is intended to enable us to avoid unnecessary delay and cost, and to learn from that story and the lessons of Crossrail.

Once upon a time when this project was first floated, the governance model in this Bill was advocated and supported because it was going to follow the magnificent models of UK construction projects where we had at last cracked the problem and, as seen with the Olympics and Crossrail, we could now deliver on time and on budget. We still say that, except we leave out the phrase “and Crossrail”; we only say, “the magnificent example of the Olympics”. What Crossrail illustrated is that once you have a delay you automatically and unavoidably have cost increases. That is not only because it costs money to take longer; it costs even more money to try to catch up.

My amendment is designed to save the large amounts of public money which come from delay in taking decisions about how the project should proceed. A project of £4 billion intended to take eight years is going to spend, on average, £500 million each year. That is not a trivial sum in anybody’s counting and certainly not in the Treasury’s counting. The year’s delay will not cost you all the £500 million but it will probably, à la Crossrail, cost you two-thirds—£300 million, say, will be the cost of holding things back for a year, for one reason or another. So the current way we are going to decide whether we can afford something goes something like this: the sponsor body develops a programme, signs it off and passes it to the delivery authority, which gets the design work and the tendering going and then reports back to the delivery authority, which reports back to the sponsor body, which sends it to the estimates commission, which at that point consults the Treasury. The Bill says it “must have regard to” the information or advice it gets from the Treasury. In fact, three of the Bill’s 15 clauses relate to having to have regard to the Treasury’s advice.

Whatever might be said in some idyllic constitutional theory about parliamentary supremacy, the actual tap is turned on and off by the Treasury. That is no surprise and certainly it is the reality of this piece of legislation. The point is that at least a year, and probably 18 months to two years, after the sponsor body has commissioned the work to be done, the Treasury will say, “Oh, no, sorry, that is not in scope, we cannot afford that. Spread it over 10 years, drop all the stuff about getting into the turrets, never mind Lord Stunell and hearing, let us just have it like it was in the old building and cut costs”. We will still have the delays. Incidentally, it will be very difficult to save as much by cutting things out of the design as it will cost to have the delays—which, of course, is another Crossrail story as well.

What we have is a system where we know it will be the Treasury taking the decision on whether the money is going to be spent, but instead of asking before we start, “Can we have the money to do this?”, we are going to wait until we have done everything and then the Treasury is going to say no. Amendment 23 simply short-circuits that in a very simple way. It says that it is permissible to have a Minister of the Crown on the sponsor body. It does not require that there shall be, and it is therefore still a matter of choice as to whether such a person is appointed or not. What that means is that, at the start of the process and not at the end, the Treasury would be saying what can and cannot be spent. In terms of parliamentary accountability and lots of other things, people will say, “That is completely wrong”, but the Government’s fingerprints are going to be on this and they are going to do their best to wipe their fingerprints off it, which they will be well able to do if they present it in anonymous advice to the estimates commission two years after the process began and the delays will be there.

My amendment allows the Government to find a way of being more transparent about taking the inevitable decisions that the Treasury will make and putting those in the public domain at the earliest moment. I know that I do not have too many friends on this, but I have given the House an option, which it does not need to exercise but which in five, 10 or 15 years’ time, a future Administration and the future House will be very grateful for, so that they can indeed save any more delays than those that will by then already have accumulated. I beg to move.

Photo of Baroness Smith of Basildon Baroness Smith of Basildon Shadow Leader of the House of Lords, Shadow Spokesperson (Northern Ireland), Shadow Spokesperson (Cabinet Office)

My Lords, I listened carefully to the noble Lord, Lord Stunell. If I understand his argument correctly, he seems to be expressing a lack of confidence that Her Majesty’s Treasury will come up with the money and deliver on the funding at the end of the project, and to avoid that he is suggesting putting it on the committee that is deciding what the project should do and what money should be requested.

I understand why the noble Lord made his arguments, and, as I said, I listened carefully, but I am not persuaded by them. This is a parliamentary project, not a government project—that is an important distinction to make. There are times when I suspect that there may be battles between Parliament and government on this, although I hope not. I hope that in bringing forward the Bill, government is showing its intention to recognise that the work has to be done and paid for.

The Minister made the point in his letter that the Treasury’s role should be,

“an external party looking inwards with the ability to scrutinise the annual funding through the estimates process”.

To have a Treasury Minister on the board—I do not think the noble Lord was talking about any other Minister—could compromise that role, blurring the lines of accountability. As a Treasury Minister, they would have collective decision-making responsibility for decisions taken by the sponsor body, which could lead to conflicting comments on the estimates as well.

I understand the concerns the noble Lord raises, but this is not the way to address it. We would not support the amendment.

Photo of Baroness Barran Baroness Barran Baroness in Waiting (HM Household) (Whip) 10:30 pm, 22nd July 2019

I am grateful to the noble Lord, Lord Stunell, for tabling his amendment, which, as he explained, would allow a government Minister to become a member of the sponsor body. I also thank the noble Baroness the Leader of the Opposition for reinforcing the point that this is a parliamentary project and that we need to make that clear at all times.

I understand from the noble Lord’s speech at Second Reading that his key concern was about the potential lack of transparency around the Treasury’s advice on the estimates of expenditure, which in turn could lead to delays, waste and extra cost, as well as the need for Treasury buy-in to the project. The noble Lord has again articulated these points clearly tonight. He also stole the next part of my notes when he explained exactly how the process worked. However, I should add—I did not catch the noble Lord saying this, so I hope he will forgive me if I missed it—that the estimate is laid after it has been reviewed by the estimates commission and there has been consultation with the Treasury. The estimate is then laid before the other place for approval, including any comments made by the Treasury. I am advised that this is more transparent than the current estimates process for the funding of Parliament. To be clear to the House, this provides the opportunity for the Treasury to comment on the annual estimate, but it does not provide it with a veto. Furthermore, in terms of approval for the parliamentary building works, the Treasury is not given a role in respect of the outline business case. That is exclusively a matter for Parliament.

At Second Reading and again tonight, the noble Lord argued that a Treasury Minister could sit on the sponsor body, as recommended by the Joint Committee that examined the Bill. The role of the Treasury in this project is as an external party looking inwards, with the ability to review and advise upon the sponsor body’s annual estimates. The Treasury’s comments on the annual estimate will be laid before Parliament with the estimate. Therefore, the advice of the Treasury will be available when the House of Commons considers the estimate, and that provides for a clear role for the Treasury. The sponsor body and Parliament will therefore have transparent access to the Treasury’s views on the value for money and affordability of the project, which I hope addresses the noble Lord’s concerns around the transparency and the timeliness of that advice. Our view remains that, if a Treasury Minister was a member of the sponsor body, it would compromise that and could restrict the Treasury from being able objectively to assess the sponsor body’s annual estimates. In the light of these arguments, I hope that the noble Lord will consider withdrawing his amendment.

Photo of Lord Stunell Lord Stunell Liberal Democrat

I thank the Minister very much for her reply and the noble Baroness, Lady Smith, for her words of comment on the amendment. She asked whether I trust the Treasury. If I replied yes to that, I would be the only person in this House who did. The Treasury rightly considers itself the guardian of the nation’s purse. In my experience, from both inside the system and looking at it from the outside, it is very rare for the Treasury to say, “Why don’t you take more money? Why don’t you speed up this project?”. I think we can all anticipate that the role of the Treasury in this is to be the gatekeeper of money. It sees that role as reducing the flow of money, particularly if Members of both Houses arguing the case for hospitals, schools, aircraft carriers and goodness knows what else, at the expense of this self-serving project for Members. You can see the national newspapers and media joining in that school.

The idea of someone turning the tap off is real. The only question is whether we have a system where we turn it off at the end of a long process, thus wasting a lot of money and time, or whether we turn it off at the beginning, so that we know we have to take 20 years, not 10 years, because we can spend only £300 million a year, not £500 million a year—as the case may be—in which case, we can design the project on a completely different timescale and get efficiencies that way.

The Minister said that the Treasury’s advice will be published. Yes, it certainly would be, but the question is whether the estimates would have been trimmed as a result of the advice given and the dialogue that goes on. The estimates commission “must have regard” to any advice that it receives from the Treasury. If the Treasury says, “You can spend only £400 million”, and the estimates commission is being invited by the sponsor body to spend £600 million, it is not statutorily in its power to put the £600 million figure on the table in front of Parliament, because it “must have regard” to any advice. The Minister may say that that is incorrect, in which case I should like to have that on record.

I will not pursue this tonight, not just because of the time but because I have no one here who agrees with me. I just say that I think that this is a problem that will come back to haunt us, and I may yet say something at the next stage of the Bill. With that, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendments 24 and 25 not moved.