Following an update on the Elizabeth Tower conservation project to the House of Commons and House of Lords Commissions, as part of their commitment to preserve the Elizabeth Tower and the Great Clock for future generations, the contract for the delivery of the Project has been awarded by the authorities of both Houses to Sir Robert McAlpine Ltd.
Following 16 months of detailed analysis of the work required to refurbish the Elizabeth Tower and Great Clock, a greater understanding of the practicalities of delivering such a complex project, and the outcome of a standard procurement and tendering exercise, the estimated costs, on a like for like basis, have risen from the original feasibility study estimate of £29m to £45m.
Reasons for the increased costs include:
Increased understanding of the work needed
Since the initial cost estimate, the design has gone through a Detailed Design and Technical Design process, enabling us to gain a greater understanding of the extent of the refurbishment work required throughout the Elizabeth Tower. For example, a lot more is now known about the condition of the stonework following a further stone survey undertaken after the initial estimate. The External Courtyard Stone Conversation Project also commenced during this period, and we took the opportunity to learn lessons from it and apply them to the Elizabeth Tower project.
Greater complexity in undertaking the work
It was also found that the processes for completing the works was more complex, and therefore more expensive, than previously thought. Examples include re-glazing the clock faces, stripping and repainting metal work within the tower, and the associated sequencing which the works can be completed to ensure a high quality of workmanship: the gilding cannot be completed until all the stripping and repainting of the metal work has been completed.
Despite extensive surveys, the ground conditions proved to be more complex than we anticipated, requiring additional work. As an example, when ground works commenced in Speaker’s Green and New Palace Yard, the quantity of utility services discovered in the ground was greater than what had previously been identified through the surveys and historic record information held in our archives. This meant that further ground works were required to support the weight of the scaffolding.
The Commissions also agreed to a proposal to increase the project’s level of risk and optimism bias. This is the industry-standard practice of setting aside money that may be required to respond to unexpected events and challenges that often arise in complex projects such as this. Experience of other heritage projects in Parliament has shown that working on the Palace of Westminster presents unique challenges and the need to expect the unexpected. The set-aside has been raised from the original sum of £5.8m to £17.2m.
Further to this, fire safety work, funding for which had previously been held in the budget of a different project, has been transferred to the Elizabeth Tower project so the work can be undertaken more efficiently. This has added £4.5m to the total cost of the project. This is money that would have been spent anyway. It is not extra cost. It has simply been transferred to the budget of the Elizabeth Tower project.
The total overall cost of the project, including VAT, Risk and Optimism Bias and the transferred fire safety work costs, is therefore now estimated at £61m as opposed to £29m as estimated in spring 2016.
The authorities of both Houses had already agreed to an internal audit review of progress on the Elizabeth Tower project, and this will now include analysis of the reasons for the increase in estimated costs.
The Commissions expressed their disappointment in the cost increases, and the unreliability of the original estimate. They instructed officials to provide regular updates on progress and costs to the relevant domestic committees so they can keep the Commissions fully informed of the project. They also reiterated their commitment to preserve the Elizabeth Tower and Great Clock for future generations.
In a statement the Clerk of the House of Commons, the Clerk of the Parliaments and the Director General said:
“We acknowledge that there have been estimating failures and we understand the concern of the Commissions. In advance of tendering contracts, the initial high level estimates were set at a lower level to avoid cost escalation from the market. Subsequent estimates, using better data and more extensive surveys, better reflect the true likelihood of the costs. We believe that we now have a more accurate estimate of the cost of the works and will report regularly to the committees on the progress of work.”
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