HOLYROOD INQUIRY TRANSCRIPT
Thursday 1 April 2004 (Morning Session)

Rt Hon the Lord Fraser of Carmyllie QC opened the hearing at 10.02 am.

1. Mr John Campbell QC (Counsel for the Inquiry): Sir, good morning. Mr Paul Grice, the Clerk and Chief Executive of the Parliament, has returned to the Inquiry for the third occasion. Mr Grice, I am grateful to you for attending and for taking evident trouble with your precognition which, I think, is designed to bring us from June 2000 — roughly the time of Stage D — to the present day?

2. Mr Paul Grice (Clerk and Chief Executive of the Scottish Parliament): It is.

3. Mr Campbell QC: Thank you. You deal first of all in this precognition (WS/50/001–027) with the establishment of the Holyrood Progress Group (HPG). Rather than read a lot of narrative, which we with respect know already, I wonder if I could ask you about paragraph 4 in the opening of your precognition. You are quite specific that the Progress Group should run the Project on behalf of the Scottish Parliamentary Corporate Body (SPCB). I have no doubt that you have heard some of the evidence which has been made before the Inquiry about the management lines and the perception of confusion amongst the management lines in the heads of some of the consultants at least. Are you quite specific that it was your intention that the HPG, following Spencely’s recommendations, should be the body in control?

4. Mr Grice: Yes.

5. Mr Campbell QC: How did you expect a group of politicians, albeit with the assistance of professionals, to be able to run a project of this complexity meeting but once a fortnight?

6. Mr Grice: I think you have to look at it in the round. What is absolutely clear, bearing in mind that the client is a Parliament, it is a unique Client, and the HPG as the principal Client Body had a very important role to make, a very definite role in overseeing the management of the Project. But you have to see their role in conjunction with project management. And I have to say, notwithstanding some of the comments which the consultants have made at this stage at least — I do not recall them making these comments to me previously — there has been a pretty clear line of control and command with the HPG effectively sitting at the top of that in terms of the day-to-day management of the Project. I think the time they gave on a fortnightly basis — supplemented as necessary — was adequate in the circumstances. So you have to see it with the Project Managers who, of course, were a full-time team.

7. Mr Campbell QC: Yes. One of the problems might be perceived to be that there does not seem to have been a clear day-to-day link between the Project Team and the Progress Group other than by means of fortnightly reporting.

8. Mr Grice: I think Paul Curran explained this very well. There is a hierarchy of decision-making. Clearly, what the Progress Group was there to do was to monitor cost and programme and to lead the decisions on major issues. Even on a project of this size and complexity, those major decisions were, if you like, gathered up and reviewed on a fortnightly basis. But of course there are many, many day-to-day decisions — and I thought Paul Curran explained that quite clearly — and some decisions were, in fact, taken below his level by the Project Managers. It is a question of the HPG leading the big decisions, and I think that was a proper hierarchy.

9. But it comes back to this point that there was a Construction Manager, if you like — Bovis — whose job it was literally to manage the construction, a Project Team full-time, who were there five, seven days a week, with the Progress Group meeting on a fortnightly basis, leading the major decisions, the major issues of policy. And that is, I think, a proper hierarchy.

10. Mr Campbell QC: I understand why you would say that it is a proper hierarchy. Of course, it is immediately comprehensible if you set it out in a flow chart or an organisation chart. Can I just ask you to look at CB/5/051 which is page 3 of the Memorandum of Understanding, beginning at paragraph 6? This is a carefully drafted document, as we can see, inter alia to introduce the clever scheme of delegation which overcame the difficulty which was perceived to exist in that you as Clerk were not able to delegate the powers which you had to the SPCB or to the Parliament. I do not want to deal with that aspect of it because we have heard enough about it and we understand it.

11. In relation to the remit of the Progress Group, which is what you are looking at now, if we look at the bullet points, they are all advisory, monitoring, consultative, communicating, recommending and providing a record. It seems to me that there is, and should be recognised to be, a distinction between that and running the Project, and that is why I draw attention to what you have said in paragraph 4 of your precognition.

12. Mr Grice: I think the role of the Progress Group — and I realise that you have been there before, but it is very important to understand the background. Parliament itself decided there should be a progress group, and, of course, that is an instruction. Yes, we had a challenge — there is no doubt that the framing of the Scotland Act… it was not perceived difficulties, there were clear legal barriers.

13. So yes, it is a carefully crafted document to get around that, but the clear will of Parliament was that another group should oversee the day-to-day management of the Project. And the wording here is to give that group as clear a power over that as possible, and I accept entirely it is giving advice and making recommendations. But there is a critical part in paragraph 7 (CB/5/051) which relates to myself because that, of course, is where the executive authority goes through, which says that guidance and recommendations should be followed by the Clerk apart from in exceptional circumstances.

14. Now if I have to do what somebody tells me, apart from in exceptional circumstances, de facto that gives them authority. Yes, of course it gives a particular role to myself and the Project Director to play if we feel that those recommendations are in some way inappropriate. But I would also draw your attention to the track record throughout the duration of the Project. I believe that has worked well in the sense that on very few occasions have those recommendations, advice or guidance ever caused any difficulty. In practice, project management has acted upon them, so I think there has been a clear and comprehensible line in my judgement.

15. But I entirely accept your view; we had to work within the terms of the Scotland Act, and this is the best we could do. I think that had the Corporate Body the power to give executive delegation to the Progress Group, I am certain it would have done; and certainly that would have been my recommendation, but that option was not open to us.

16. Mr Campbell QC: So we can be content, can we, to characterise the HPG as the Group designated by Parliament to, in your words, “run the Project” —

17. Mr Grice: That was my —

18. Mr Campbell QC: — and not simply just to step back and take a fortnightly overview?

19. Mr Grice: No. I think Parliament wanted them to have a more engaged role than that, and that is how we set it up. Indeed, that is how they have operated over the past four years.

20. Mr Campbell QC: Let me pick up on a comment that you made just a minute or two ago. You characterised the Project as a political project, a Parliament, a project of a special nature — some have said unique but in any event sui generis, if I can be forgiven for a little Latin. Why should that make a difference if we are, in the end of the day, procuring a building?

21. Mr Grice: Because you are meeting aspirations which go wider than that. Unique, of course, is an overused word, but I think that one could argue that the complexity of the building is unusual but not unique.

22. Mr Campbell QC: But that is an architectural characteristic, not a political characteristic.

23. Mr Grice: I entirely accept that, and I think what is unique is the fact that this is a Parliament. It is a Parliament building; it serves a particular purpose. Its client is quite unique in its democratic make-up. I think it was clear right from the outset — even going back as far as the White Paper — that this building was of huge symbolic importance because it was a Parliament building. I think one has to recognise that, and certainly where I sit in the organisation as Clerk, you have to recognise that. In terms of being the Client, one has to recognise what the Parliament is trying to achieve.

24. Mr Campbell QC: In your answer, if I may say so, you are crossing lines between, on the one hand, architectural features of a particular building — its complexity, its novelty, its iconic status and the fact it was procured from a signature architect — and on the other hand, the particular special use to which it will be put, namely to house the elected representatives of the nation. I would like to focus on those two; if you could try to keep them apart in your mind. In the end of the day — and I know that this is oversimplistic — we are procuring a building of a special nature. That is right, is it not?

25. Mr Grice: Yes.

26. Mr Campbell QC: And that raises for those charged with its procurement particular issues of design, of difficulty in construction, of timetabling and, of course, cost?

27. Mr Grice: Yes.

28. Mr Campbell QC: On the other side of this equation, we have a client which is not a single client, it is not a Standard Life or a British Land: it is not simply an office that has been procured; it is a building with a multiplicity of uses. Is that unique? Is that so special that it requires to have a board in charge of it representing the body that will occupy it?

29. Mr Grice: Yes, in my judgement. Because I think that a Parliament of itself is a forum which brings together many different views; that is the whole point of a Parliament. It is very distinct from an Executive, from the Government which has a single point of command — in our case a First Minister. A Parliament by its nature is a forum for debate, for disagreement, and that makes it a very particular type of client with different expectations and aspirations. Unlike a Government with a Cabinet and collective responsibility, Parliaments do not have that, so you do need a special client representative, and that initially was the Corporate Body. Parliament itself decided that for all the good work the Corporate Body had done that it wanted a different type of client representative. On the basis of the Spencely recommendation, Parliament had decided that the Progress Group was the right way forward. And it specifically said in its resolution that that Progress Group should be a mixture of parliamentary representatives and professionals.

30. So Parliament itself took a view, and the responsibility of the likes of myself was then to put that decision, if you like, into practice. Obviously I accept that the particular make-up of the Progress Group was a decision for the Corporate Body, but very much in line with the Parliament’s resolution. But I would say to you that the particular nature of a Parliament did require that particular type of Client Body.

31. Mr Campbell QC: It seems to me that we might be in danger of confusing a discussion about what is required for the housing of an untidy but democratically accountable group of people and their staff on the one hand, and on the other hand, the much simpler discussion of what are the physical requirements for that purpose. If I boil this down to, again, very simple components: we have offices; we have Committee Rooms; we have a debating chamber; and we have places for the public. Now, I know that you would elaborate on that and say that there is much more, but actually those are the bones of the building. It has been possible in other examples to construct a building with a multiplicity of uses on a timetable and at a cost which has been reasonably foreseeable and reasonably accurate.

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32. Mr Grice: I think you would struggle to find a building with the symbolism of a Parliament building. I think also you would struggle to find a building with a client quite the same as a Parliament, which has a range of opinions. Whether you take Standard Life or even a government building, ultimately there is an executive at the top of the pile who can take decisions, or even in some cases a chief executive very different from this sort of Chief Executive who actually can take decisions and say, “Right, that is what my company is going to do.”

33. The Parliament, I think, is in a different position to that. Because at the end of the day, what you describe as the bare bones of it, I accept. Within it, there are what you would require as standard components of office accommodation, but it has to meet the aspirations of the Parliament, and the Parliament itself, if you like, is a democratic institution reflecting the aspirations of the people of the country. That is an enormously difficult thing to capture. I come back to the point that the symbolic importance of the building, as initially kicked off by Donald Dewar, was hugely important. If we were simply looking to build some functional accommodation to house my staff and others, we would have gone down a wholly different route: you would not have had a signature architect; you would not have had the various design competitions and other matters.

34. Coming back to the point that Parliament itself judged that to fulfil its expectations as Parliament, it wished to have this body — the Progress Group — to take forward and to meet those aspirations on a day-to-day basis. I entirely accept your view: it is the bringing together of those two things — I accept we should not confuse them — functionality on the one hand, if you like, and the aspirations of this as a Parliament building on the other. They required something different, something special. The particular route, and I accept one could have gone down other routes recommended by John Spencely — well, one of two options by John Spencely, to be accurate, and lit upon by the Parliament — was the Progress Group model.

35. Mr Campbell QC: I understand that and I, of course, also understand that you were charged with delivering what Parliament decided — I make no criticism of you for that. Is the difficulty properly articulated then as a difficulty in accurately capturing the requirements of a disparate body, so that you can represent it in as good a quality, as low a cost and as quickly as possible?

36. Mr Grice: Yes, because we all now know, not least because of the output from this Inquiry, they are extremely difficult things to balance. In a sense, cost and time are a bit more definite; quality is the difficult one.

37. Where you have a concept such as quality, which really can only be judged on, if you like, almost a case-by-case basis and requires, as well as that, a kind of philosophical approach, that is where I think you have got to have that political input. It does not just come down to a person like myself that can just take a clear decision: “A is cheaper than B — we’ll go for it.”

38. Where you have this dimension of quality and what is appropriate, in my view it is easy enough making decisions, but making decisions which will stick and command the support of the Parliament, that was the difficulty, and I think that is where the Progress Group played a key role and has continued to do so.

39. Mr Campbell QC: I think you return to this question of quality, do you not, in your statement?

40. Mr Grice: I do.

41. Mr Campbell QC: Could you turn to paragraph 10 of your precognition? Moving through your precognition in this way, Mr Grice, I do not intend to diminish the importance of any of it, but you have submitted it in advance kindly, and I have read it. If you will just allow me to light on the areas where either we have not have evidence yet or I need some more elucidation.

42. Mr Grice: I am happy with that.

43. Mr Campbell QC: Thank you. You mention in this paragraph — not perhaps in the context of my forthcoming question, but nevertheless you do mention the notice of proposed development (NOPD) procedures.

44. To some extent we mentioned this before when you were here. I just wonder what your perception is of the performance of the City of Edinburgh Council in dealing with the application for the NOPD, which the Parliament had submitted to it. Now, it may be that you cannot answer this question without a passing reference to Historic Scotland, so if that is the way you want to deal with it, I am happy with that.

45. Mr Grice: I should add a caveat, I think, at the outset: I was not completely close to the detail. It is always dangerous evaluating performance where you have not seen the detail of it, but if you want my perception from where I sat at that time, it was that it was a frustrating experience from the Client side because that process took longer than we had expected and had hoped for, and we well understood the role of Historic Scotland, effectively in advising the City of Edinburgh Council, and I think we also well understood it was, again, the sort of advice that the Council was duty bound to take very carefully.

46. I certainly came across a deal of frustration on the part of the architects in particular at the pace with which we were able to resolve the outstanding issues. But I do not think I am qualified to make any comment beyond that.

47. Mr Campbell QC: OK; thank you. Turning to paragraph 12 of your precognition, what benefit was derived from having the Project Team meet in private with the Progress Group rather than round a table with them and the consultants?

48. Mr Grice: One thing that I had observed in the Corporate Body’s oversight, if you like, of the Project up to that point was that, especially on quite technical issues, it is actually quite difficult to ask the searching supplementary questions of professional consultants. We sort of got round that with the Corporate Body by providing briefing, et cetera. Just the lack of time the Corporate Body had with the many, many other things on its agenda made that difficult. So the procedures that the Progress Group came up with, which struck me as entirely sensible, is that they gave themselves an opportunity to brief themselves using, if you like, their own project management team.

49. So I think the value it gave was that, before the lead consultants joined meetings, the HPG members were right up to date with progress; they had a good understanding of any concerns which the Project Managers had and were able to interrogate the Project Managers themselves on issues of detail. So I think they had a confidence and a knowledge that they were better able to interrogate the lead consultants. I think that was the value. The Corporate Body had only been able to achieve that from time to time, given the other pressures on them.

50. Mr Campbell QC: By “Project Managers” in that reply, do you mean just one of the Project Managers or do you mean generally the group of people who ended up working to Ms Davidson?

51. Mr Grice: Although I do not attend HPG any more, my understanding is that, in recent times, that would usually be Paul Curran but, as you probably know from Paul Curran’s testimony, we have in the last year or two had more specialist project managers dealing with facades or issues, so I would imagine if it was a particular issue, for example, over the cladding, it might well have been the case that the Project Manager dealing with the cladding package would come along.

52. But what it gave the Progress Group was the opportunity to ask questions of somebody on their side of the fence, if you like, to satisfy themselves. I think that is a good practice — in fact, something that the Committees of the Parliament use expert advisers for in a wider context. They will speak privately with their expert advisers, before they get witnesses in, to help focus questions.

53. Mr Campbell QC: To help them to interrogate the witnesses?

54. Mr Grice: Yes. It is a more satisfactory result, I think.

55. Mr Campbell QC: Passing criticism, but I do not think it is any more than that, has been made in relation to the communication of instructions from the Progress Group. We know that the route was through yourself and that you were expected to follow the advice of the Group unless, exceptionally, there was considered to be a reason not to do so.

56. Mr Grice: Yes.

57. Mr Campbell QC: Do you see a problem — real or perceived — in the way in which instructions were communicated from the Progress Group?

58. Mr Grice: No, I think it worked well. I was always clear; my Project Team, via the Project Director, were clear; the HPG have not come to me and said that our instructions/recommendations had not been acted upon.

59. Mr Campbell QC: I am talking about the consultants.

60. Mr Grice: As I say, obviously I am aware of some of their testimony here, but all I can say is that in all my time as Chief Executive I do not recall them coming to me at the time and saying, “We are not clear what we are supposed to be doing.” So I am pretty comfortable that the system we set up has worked effectively.

61. Mr Campbell QC: You deal on page 4 of your precognition with “Stage D Sign-off” and you refer to CB/2/294–295.

62. These questions are based around the £108 million figure, which also equiparates with the £195 million figure. Were you satisfied, or did you have to be satisfied, with the robustness of the £108 million cost plan?

63. Mr Grice: I noted it was consistent with the figure which the cost consultant had given to the Corporate Body as far back as March of that year. It came up via my own then Acting Project Director. So that gave me the assurance which I think I required: that it was direct advice from the cost consultant and that it was presented by my own Project Director and, indeed, obviously I was aware that it was consistent with what the cost consultant had previously said.

64. As I also say in the precognition, although Spencely had come at it slightly differently, in broad terms they produced the same overall figure. That too gave me a degree of comfort.

65. Mr Campbell QC: You can see what is in front of you: that is the summary that was on the screen. You perhaps have it there in hard copy as well.

66. Mr Grice: Yes, I do.

67. Mr Campbell QC: That is the front page of what is a much larger document in relation to the production of this cost plan, and we can see that it brings out a figure of £118 million, although there is something called “General and Contingency” at £11•6 million, and “Fit Out” is added below that.

68. Do you understand, or do you have an understanding of, how the Progress Group came to be told that £118 million could equiparate to £108 million?

69. Mr Grice: Yes. If you go back even to the Corporate Body’s report to Parliament in April of that year, you will find that explained — how £108 million is made up to £195 million. Basically, Davis Langdon & Everest [DLE] have got the contingency, if you like, above the line. The Corporate Body’s practice was to say, “£108 million and add the contingency in afterwards.” I think it does not matter too much either way.

70. As I think you probably know from previous testimony, the fit-out was closer to £20 million all up, but fit-out, of course, covers a multitude of issues, from loose furniture through to floor coverings, which is why some of it is effectively under the Bovis procurement route.

71. Mr Campbell QC: To pick that up, some of it is under the Bovis route now and some of it is still under your control?

72. Mr Grice: Indeed it is.

73. Mr Campbell QC: Your Implementation Unit is looking at that and dealing with it?

74. Mr Grice: Yes, it comes within, although our own procurement team has procured that — principally, furniture. So yes, I have got a reasonably clear understanding and I think the Corporate Body did. As I say, I am pretty sure from memory that their report to Parliament back in April had actually included an explanation of how £108 million and £195 million sat together.

75. Mr Campbell QC: How prescriptive did the HPG regard Parliament’s instruction to complete this building within a cost ceiling of £195 million?

76. Mr Grice: I think when they took the job on they regarded it as a very real target. The word “target” was used by, I think, the HPG in their statement, so clearly they regarded it as such.

77. There were some discussions I record in my precognition around the price base of £195 million, because, whilst Spencely and the Corporate Body had commented upon it, the actual resolution of Parliament was silent on it, which left a degree of ambiguity.

78. Mr Campbell QC: That is the “March 1998 or contemporary”?

79. Mr Grice: Precisely. I say in my precognition about a discussion that the HPG had which culminated, I think, eventually in a report to the Corporate Body itself on the treatment of inflation.

80. Mr Campbell QC: That came a little later, I think?

81. Mr Grice: It did come a little later, yes.

82. Mr Campbell QC: On the face of the parliamentary resolution, £195 million seems to be a non-elastic figure. You have described it as a “target”. I wonder if you can tell me how you saw the overall target being communicated out to the consultants. What was done to impress on them that this was a non-negotiable maximum?

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83. Mr Grice: I think it was done on at least two levels. At the global level, if you like, the Corporate Body sought and received assurances from them, and, of course, we really worked to £108 million rather than £195 million, but we were all clear that one underpinned the other. So the first thing the Corporate Body got, principally of course, from the cost consultant — that is who you would look to — that £108 million was a fair and robust figure, but also from the architect, and at the Stage D sign-off meeting. I do remember quite clearly the Corporate Body seeking a view from the architect that they could work to this, and they received that. That was obviously an important part of the reassurance they were looking for. Following the Stage D sign-off, an instruction was given that the cost consultant and the Construction Manager should then work to produce a package-based cost plan, which they produced over the next two or three months — I do not have the precise details to hand.

84. Mr Campbell QC: This is referred to in the text on the screen, is it not, at the top?

85. Mr Grice: I think it turned up in about the autumn of that year. So the next stage was to produce a package-based cost plan and, in fact, £108 million, even to this day, remains the base of the DLE reports, so £108 million has been the peg, if you like. It was communicated politically, but that was underpinned through the normal management processes.

86. Mr Campbell QC: If you go down a few levels, it is quite difficult for the man designing a drainpipe or a manhole cover, or even something like the Committee Room ceilings, to have an eye on an overall target of £195 million. He should have an eye on something much more prescriptive, much more local, in terms of that package of work, should he not?

87. Mr Grice: I was about to agree with you on drainpipes until you mentioned the Committee Room ceilings because I think there is a genuine point about that. The guy designing a manhole cover is probably just designing a manhole cover, but the Committee Room ceilings are a very substantial package, and I would fully expect the designers working on that to have an eye to the cost. But I think the more precise answer to your question is: that is why you have a package-based cost plan.

88. Mr Campbell QC: I wanted to get to that.

89. Mr Grice: Sorry. That design — even the manhole cover, but let us put that to one side — the actual Committee Room ceilings will be part of a package; that package will have a cost against it which will have been agreed by the lead principal consultants. That is your package-based cost plan, and I would have expected your designer to have that in their mind at all times. I fully accept that, until you tender it, you do not actually know what it is going to cost, but I would have thought that that should have been part of the process.

90. Mr Campbell QC: But the other side of that coin is that you can tender it without having fully worked out working drawings, can you not? You can tender it with general arrangement drawings and an idea of cost?

91. Mr Grice: I think, as you know, some judgements have been made on what point one goes out to tender. Certainly, the advice I have heard given, and in particular I have heard from David Manson, the professional quantity surveyor on the Progress Group who was very thoughtful on this matter, was that, yes, you have to make a judgement, and again you are judging programme, cost and other issues. But, other things being equal, the more information you put in a tender, the better and more robust a price you are likely to get back. However, as I am sure you know from testimony from others, two-stage tendering has had to be used on a number of occasions where it is more as you have described it; there has been a more general idea with a specific requirement for the contractor to make input into design. I do understand that there are benefits to that, but one of the difficulties is that, naturally, the tender you get back has got to have more provisional sums in it.

92. Mr Campbell QC: More potential elasticity in it?

93. Mr Grice: Precisely.

94. Mr Campbell QC: And, of course, also a sum for all the design necessary to fill out that provisional sum component to something real?

95. Mr Grice: Exactly.

96. Lord Fraser: Yesterday, Sarah Davidson said to us, I thought with compelling accuracy, that under construction management, if that is the course you follow, there is no such thing as a cap; you get it when it is finished. It seems to me that this is what has bedevilled this project all along. MSPs, yourself and others have all along been trying to put a cap on it, and the fact of the matter, which she seemed to have grasped within a month of being appointed as Project Director, was that you cannot do it. And that is why the Parliament eventually took the so-called cap off it, and let it proceed as it has.

97. Mr Grice: She is right; that is the nature of construction management.

98. Lord Fraser: I am still a bit lost about who understood what. Why was the Parliament saying to the architects, “You will do it for £195 million — or £108 million if you want to use the construction figure — and you are not to exceed that”, when anyone who was knowledgeable about the way that construction management goes forward — Sarah Davidson clearly grasped this very, very quickly indeed — knows that there is no such thing as a cap. There is a contradiction in there somewhere, is there not?

99. Mr Grice: It is difficult for me to speculate on what might have been in the minds of Members, but what I can say is that the Corporate Body asked John Spencely to look at the nature of it, and his report does include some discussion on construction management. And indeed the Auditor General’s report, which, of course, post-dated that debate, contains a quite eloquent discussion of construction management. But you are right and Sarah Davidson was right; that is the nature of construction management. But you can also understand, if you like, the political and, if I may say so, media pressure to have, at the very least, a figure to go at. But you are right: in June 2001, the Parliament decided that that was no longer the best way to manage this project, which does not mean to say — and I think Sarah Davidson was very clear on this yesterday, as I would want to be — that people gave up on cost.

100. Lord Fraser: We were not suggesting that.

101. Mr Grice: I realise that, but lest anyone would think that that was a signal that cost did not matter. It was a signal of the realities of this type of procurement.

102. Mr Campbell QC: I think that when the question was put to her yesterday in that way, it was simply to provoke a reaction.

103. Mr Grice: I entirely accept that.

104. Mr Campbell QC: I am not putting any conclusions to you. It is, of course, an easy perception in the public mind and in the layman’s mind, is it not, that if you build something, you must know what it is going to cost before you start?

105. Mr Grice: I accept that.

106. Mr Campbell QC: The analogy of the conservatory or the house extension that has been made to me by taxi drivers all over Scotland is not really fair in these circumstances, is it?

107. Mr Grice: I would not say that it is not fair, but I would express it this way: if I was going to build something as straightforward as a conservatory, I think I probably would want to know what the window at the end was like before I started building the walls out from the house. If I did that, I would probably be able to get an accurate cost. As you know, under construction management, we had put in the foundations and begun to build the superstructure of the MSP block before we had designs for the East end of the site, and therefore it is just a completely different way. Other people more knowledgeable than myself have eloquently argued the pros and cons of construction management, but yes, if you do not know what the design is going to be, then it is very difficult to say what it is going to cost.

108. Mr Campbell QC: The subtext there might well be that, even if you do not know what the design is going to be, you ought to have a mechanism in place for keeping the designers to a price?

109. Mr Grice: That is your package-based cost plan.

110. Mr Campbell QC: A problem arose with that because, as you have already told me, one of the components of that very often had to be a provisional sum?

111. Mr Grice: Yes.

112. Mr Campbell QC: Because either design was not complete or because the actual method of constructing the components was not known at the time the package was let.

113. Mr Grice: Yes; again, I think DLE would be the best people to ask, because this is, of course, their expertise. But as I understand it, the process is that all the consultants get together. This is where they need to bring all their professional expertise to bear — architect, Construction Manager, cost consultant — and they look at it and they take a best professional estimate of what it is going to cost. Of course, the cost consultant would say to you, “The more design information I have, the more accurate I can make my cost.” I guess that has to be a judgement in time, and you have to rely ultimately on the competence of your professional advisers in producing that.

114. Mr Campbell QC: One of the things you might also rely on, if I can just stretch this argument out a little more, is to have in that circle of decision-makers a person from the Client side who has a very clear idea about construction cost and about the management of cost on a construction site.

115. Mr Grice: You would expect your Project Managers to be involved with that, and I am sure that they were, but again, one needs to be very clear that Bovis, DLE and the architects all have clear contractual responsibilities to the Client. One must always be careful not to muddy that. They are responsible for delivering certain services under those contracts, and the Bovis contract in particular is very wide-ranging in the responsibilities that it gives them. You would expect that, but they are not only like decision-makers; they are basically consultants and advisers, so it is their job to produce a package-based cost plan using best professional endeavours, and to present it to the Client for decision. Your Project Managers would engage at various points along that, but ultimately, they would be the recipients of that and that, indeed, I believe was the case. Where it gets more iterative as you go along is your Project Manager is actually engaging throughout that process to try to influence it as it goes along, but then that brings you ultimately back to a body like the Holyrood Progress Group actually taking decisions based on the advice it gets.

116. Mr Campbell QC: That process can become blurred too, can it not, if there is all the time an insistence on programme and completion in the shortest or the best possible time? That can reduce, for example, time for consideration of options, time that the designer would like to have to work his design out to the optimum. I suggest to you that it can perhaps reduce, at least around the margins, a proper emphasis on cost because expediency can take over?

117. Mr Grice: I think it is a judgement; it is a balance. The December 2002 target, in fact, was there for quite some time, so I think that goalpost did not move; the designers knew what they had to work to. They signed up to that and said they could work to it, so I think if the architects themselves say that that is adequate time, I think we are entitled to take them at their word.

118. Mr Campbell QC: Could I take you to paragraph 17 of your precognition? You are talking in this section about reporting lines and reporting arrangements. I have just one question about this, and that is about the decision to exclude the Project Director, Mr Ezzi, from the HPG meetings.

119. Mr Grice: I would not express it in those words. It was myself as well, actually. I think a decision to meet in private is not quite the same as deciding to exclude an individual. They decided to meet in private. There are two points on that, really. First, the HPG was clearly empowered to make its own procedural decisions, and I respected that.

120. Mr Campbell QC: No issue arises then?

121. Mr Grice: If I could use the example of a normal Committee of the Parliament. A normal Committee of the Parliament will meet in private on certain occasions to facilitate deliberation, and I think it is quite proper for the Progress Group, at that stage in particular, to take the view that it wished to have time in private to consider its views. The key point was to (a) ensure it took proper advice from the Project Director and took the proper time, and it did that, and indeed from myself in the early days, and (b) that its views are clearly communicated. I think it passed both those tests. I think it is perfectly entitled, if it thinks it is helpful to the good governance of the Project, to have an opportunity to meet in private. I certainly at the time did not feel that that was inappropriate.

122. Mr Campbell QC: I have no problem with its entitlement to meet in private. Clearly, it can set its own rules, and did so, and Ms Davidson set those out very clearly in her opening paper. Brian Stewart described the Holyrood Project Team and the HPG as “joined at the hip”, and he saw them as the key part of the Client Body. If the HPG is running the Project and maintaining a close overview of key decisions, if I can put it in that way, was it not essential to have Alan Ezzi there so that he could take their mind, even if he sat there and did nothing and just listened?

123. Mr Grice: He was there.

124. Mr Campbell QC: But not in the private sessions?

125. Mr Grice: No, so they had the opportunity in the other sessions to quiz him and myself. HPG and HPT, if I accepted Brian Stewart’s description, became joined at the hip. I think, in these early days, HPG had only just been established. Its procedures, I think, were slightly more formal than they are today. It took a view that a substantial amount of discussion involved the Project Director and indeed myself and indeed discussion with the consultants. But they also wanted time to meet in private, and I did not see a problem with that then, and I do not see a problem with it now. If, for example, they had met entirely in private and not allowed the Project Director in, I think that would have been cause for criticism, but to have a period during a meeting when they met in private — I saw no difficulty with that.

126. As I say, the key point was: did they take proper time to seek the views and advice of their Project Director? Yes, I believe they did. Did they communicate their decisions clearly to the Project Director? Yes they did, so they were the two tests I would set. They passed them both. I think if they felt there was a need to meet in private, fine. You are absolutely right to say that over time they have evolved. Whether they are joined at the hip or not, I do not know. I would not quite use that phrase, but certainly there has been a close and more iterative working relationship and, yes, less formal, because they have worked together now, many of these people, for several years, and they now judge that there is no need to have that, though, potentially, if they wished to have a private meeting at any point, they could do so under their procedures.

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127. Mr Campbell QC: I wonder if you would accept any part of Mr Ezzi’s criticism — perhaps it is a comment, not a criticism — that he felt that he had been hired to be the man in charge and he wanted to be as close to his bosses as he could be. I am paraphrasing, but he felt distanced. You no doubt have read his evidence or seen it. He felt distanced from the HPG because throughout his tenure of the office, he was, as he put it, kept out of HPG meetings.

128. Mr Grice: Well, he clearly was not kept out of HPG meetings. There were certain parts of those meetings where nobody was allowed in, myself included. That is the first point. Secondly, there were many opportunities outside formal meetings to have contact with HPG members. I certainly took that view myself, and of course I worked with Alan closely over that period, and as I say in my precognition, there was clearly a lack of meeting of minds as to what his role was. But his role was clearly to be the Client representative, and they are the Client Body, and there is a responsibility on both sides, it seems to me, to ensure that there is good communication and mutual understanding of what they are trying to achieve.

129. I do not believe that the HPG procedures at that time disturbed that. There was opportunity for Alan and myself in those formal meetings, and plenty of opportunity outside those formal meetings, to have contact with HPG members, especially the political members who were on the parliamentary campus three or four days a week, to engage with them in addition to that if, at any point, either Alan or I felt there was some issue we were not sufficiently clear on.

130. Mr Campbell QC: You deal with Mr Ezzi’s appointment at paragraph 20 of your precognition. I would just like to look at CB/2/257, for the record. What was the audit criterion which was put to you that should keep you out of HPG meetings after the first year? I have had difficulty understanding that.

131. Mr Grice: Yes. Concern was expressed to me that if I was the formal recipient of HPG recommendations, then I ought not to be part of the discussion which led to the formation of those recommendations. It would be clearer if I sat outside that process. And I would have to say that it had been my intention not to sit in on HPG meetings other than initially to help them get up and running, partly because of the other pressures on my time and partly because they were given a specific job to do and I felt it was appropriate that there was a measure of distance, and I sat, if you like, between the HPG and the Corporate Body. I thought there were, if you like, governance reasons for not doing it, but also, I will be honest with you, practical reasons for not wanting to commit every other Wednesday.

132. Mr Campbell QC: Just reasons of time?

133. Mr Grice: Reasons of time, yes.

134. Mr Campbell QC: CB/2/259 is the advertisement and CB/2/260 is — I hate the expression — the job description. That is right, is it, the job specification?

135. Mr Grice: The job spec, yes.

136. Mr Campbell QC: Can we note, please, at the foot of the first page of that, that the main role was:

137. “to be the SPCB’s representative, acting as a single focal point for day to day management of the Parliament’s interest in the Project, with responsibility for securing the delivery of the new building complex within budget and to the specified quality. You will be expected to join the Project after the completion of Stage D… This appointment is for a fixed term —”?

138. And then there are a series of more detailed criteria and duties. The expression used:

139. “the single focal point for day to day management of the Parliament’s interest… with responsibility for securing the delivery of the new building”

140. does not seem to me to be terribly different, Mr Grice, from what conventionally the industry looks for in a project manager. Do you agree?

141. Mr Grice: I think it is management of Parliament’s interest in the Project, and I think it is a distinction from managing the construction of the building. That is the first point I would make. The second point I would make is: it was very clear then, both at interview and of course when Alan took up post, that there was actually a project management team, so there was no doubt that the role of this person was to sit, if you like, holding the ring. I am very clear also that this post would be guided by the HPG. That was made absolutely clear at the interview and in terms of formal appointments and delegations, so the single focal point, yes, but day-to-day responsibility for actually managing the Project, no. There was clearly a project management team in place; there was clearly a Holyrood Progress Group in place; and the role of the Project Director, if you like, was to sit and hold the ring between the two.

142. Mr Campbell QC: Was this the person who sits in Mrs Doig’s bow tie, in the knot of the bow tie? You do not know that analogy, do you?

143. Mr Grice: Mrs Doig’s bow tie?

144. Mr Campbell QC: Forgive me. I thought you might have seen the analogy. Mrs Doig’s analogy, seriously, was that she was the knot in the bow tie, and to one side of her was the Client and to the other side were all the construction professionals. She characterised it as, “I am the person through which everything passes in both directions.”

145. Mr Grice: Yes, yes. I can see what she is getting at.

146. Mr Campbell QC: I did not mean to take you by surprise.

147. Mr Grice: I would not want to completely sign up to it, but I think in principle, yes, you have got your political client, if you like, your Corporate Body, your Progress Group on the one hand; you have got your Project Managers and your lead consultants and, yes, this person holds everything, sits in the centre of that.

148. Mr Campbell QC: And we can see, can we not, from this job specification quite clearly that the would-be candidate is told that he is there to represent the Parliament’s interests — so that is one half of the bow tie — and he is there to manage the Parliament’s interests and, of course, before he can do either of those, he has to identify what the Parliament’s interests are?

149. Mr Grice: Absolutely. If you do not understand that, then I think you cannot succeed.

150. Mr Campbell QC: And his medium for doing that, or one of his media for doing that, was the HPG, was it not?

151. Mr Grice: It was the principal medium for doing that, not a media but the medium. That is not just because the Parliament said so; it is because that was absolutely crystallised out in the delegation of functions which I gave to the Project Director subsequent to appointment. It was also clear from that that the actual day-to-day management of the Project on the ground was to be achieved through project management, which was already in place.

152. Mr Campbell QC: Well, I wonder about that as the single focal point for the day-to-day management of the Parliament’s interest in the Project.

153. Mr Grice: You have to bear in mind that this is a job advert; this is a job specification. There was a full interview process and considerable discussion and I not only briefed the Project Director on his appointment but gave him a formal appointment letter which made this absolutely clear. So this is intended to give a would-be applicant an idea of what we are looking for. There was a process which follows on from that, of course.

154. Mr Campbell QC: I wonder if you would agree with me that there is a distinction to be made between managing the Parliament’s interest, as this puts it, on the one hand, and managing all the construction issues on the other?

155. Mr Grice: Yes, I think there is a distinction, and that is what we were trying to grasp. Whether it is ultimately as clearly expressed as it might have been is a different matter. The intent in any document like this is to try and boil that down to a succinct phrase, but yes, I would agree with you: I think there is a clear distinction.

156. Mr Campbell QC: I do not want to take more time on this than I have to, but have you read Mr Ezzi’s evidence or heard it?

157. Mr Grice: No.

158. Mr Campbell QC: You have not. Was it apparent to you whether or not he understood that the description here and the letter of appointment was something separate and distinct from being a conventional project manager?

159. Mr Grice: I take it from what you are saying — and apologies for not having had time to read through his evidence in detail — that there was some confusion in his mind, obviously that is a matter of fact and there is no reason to doubt Alan’s evidence. I was quite clear that what I was looking for was this person sitting in the middle, as you have described it, performing a leadership role, using project management, not actually doing the project managing. The lack of clarity on that, then obviously —

160. Mr Campbell QC: You perhaps encapsulate it very well there: using project management rather than being the Project Manager?

161. Mr Grice: That is exactly what we were after, and that is why it was titled Project Director.

162. Mr Campbell QC: That is what you were after. Well, I understand your position on that, and you make it clear, I think, in those answers and also in paragraph 22 of your precognition.

163. Sir, did you have a question before we leave this document?

164. Lord Fraser: Can I just be clear? CB/2/265 is a revised organisation structure, and I am not sure, just from this file, whether this is a completely separate thing or whether this was part of the package as well.

165. Mr Grice: I could not tell you, Lord Fraser, whether this was put out with the —

166. Lord Fraser: What I am getting at is that, as I look through the first five pages of the advert and specification, there is absolutely no mention of the HPG. However, if what follows after CB/2/265 and thereafter was included, then whoever was applying for this job would have been aware of the HPG.

167. Mr Grice: The role of the HPG was not only clearly explained, but the Convener of the HPG and David Manson from the HPG actually formed part of the interview panel with myself, so I think there can have been absolutely no doubt in all the applicants’ minds that the HPG were key players.

168. Mr Campbell QC: Did you have many candidates for this job?

169. Mr Grice: Yes.

170. Mr Campbell QC: A dozen?

171. Mr Grice: No, no. I cannot remember off the top of my head but the quantity was reasonably good.

172. Mr Campbell QC: Tender returns were good, were they?

173. Mr Grice: I think you judge tender returns not just on quantity but on all sorts of other factors as well.

174. Mr Campbell QC: Please move to paragraph 25 of your precognition. You talk here about subsuming your HPG reports into your own report to the Corporate Body. Is that something you have done since your appointment, made a monthly report on all aspects of their work to them?

175. Mr Grice: No, I introduced that in 2000 or thereabouts. Obviously I have always reported to them, but in the last three years or so I have taken a judgement that a single monthly report from me to form a basis of a key discussion on the big issues is a sensible way to do it.

176. Mr Campbell QC: Is this a report about implementation of their instructions, among other things?

177. Mr Grice: I give them a forward look about issues that were coming up for the Parliament, both on the political side and the administrative side. I will report on key decisions I have taken under my delegated authority and, as I report here, for the past two and a half years or so I have used that as a vehicle to give the HPG a monthly update on the Project. In recent times as well there has been a monthly report on Implementation Unit matters to go alongside that.

178. Mr Campbell QC: And in practice that has been written by Ms Davidson since she took up post?

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179. Mr Grice: Yes. We also, in recent times, have attached a direct report from Bovis on programme as one of the annexes to it.

180. Mr Campbell QC: Is that separate and distinct from Bovis’s fortnightly construction management meeting reports which deal with programme too?

181. Mr Grice: It would not be separate from it; it would be the most recent one of those, I imagine. I do not think it is a separate document.

182. Mr Campbell QC: I am not aware of having seen the Project Director’s chapter, if you like, of your Chief Executive’s report.

183. Mr Grice: I could arrange for that.

184. Mr Campbell QC: Please do not do it unless I ask you because we have enough paper upstairs.

185. Mr Grice: I can give you an idea —

186. Mr Campbell QC: We might have a look at those if they are available and not otherwise restricted or confidential.

187. Mr Grice: I would be happy to give you a couple of samples, if you like, so you can see what they are like if that would be helpful.

188. Mr Campbell QC: Thank you for the offer.

189. Mr Grice: I will wait to hear from you.

190. Mr Campbell QC: You deal at paragraph 27 with the management of inflation. Try to encapsulate for me, will you, how you perceive the difficulty with the management and the treatment of inflation?

191. Mr Grice: The normal practice in public sector procurement is to always work to your original price place — in this case it would be 1998 price place — completely ignore inflation and at the end of the Project you say, “It cost x amount and we have added in y amount for inflation” because inflation, by definition, really can only be known at the end of the Project. The idea is that by stripping out inflation it gives you good discipline. I think that was again an issue when you are trying to set price caps and targets: what is the price place?

192. Mr Campbell QC: It makes it quite difficult though, does it not, if you are trying to secure a tender two years after the base date? It has to be discounted back first.

193. Mr Grice: It does, and so they try to work in the same price base. Obviously you will get a tender in cash terms. If it is 1998 and you are tendering in 2001, the tenderer will tender in 2001 prices. My understanding is that your cost consultant will then make an estimate of what inflation has been since 1998 and, yes, they will do exactly as you have said.

194. The difficulty was — and the Auditor General himself touched on this; he made a helpful comment upon it, I think, in his 2000 report — how we should treat inflation. Because the resolution of Parliament was silent on what the price base was, the Progress Group felt — and I agreed — that we should at least take a view on where we thought it was going to come from. The Auditor General himself had noted the fact that no separate allowance had been made for inflation. He noted that whilst contingency’s primary use was not inflation, nonetheless if it was not used for anything else, then clearly it could be used for inflation. As it happens, of course, it was not available for inflation.

195. Mr Campbell QC: Clearly by its very description it is not intended for that purpose?

196. Mr Grice: No. I think his comment, if I can paraphrase him, was that if it was not used for other purposes, then it could be used to allow for inflation. However, I think the HPG’s view on this — and mine as well — was that there was ambiguity and I was, at that point in time, about to write to the Audit Committee, and the judgement was that that would be a useful vehicle to get this discussion on inflation into the parliamentary domain. I think this concluded with a letter from myself to the Convener of the Audit Committee explaining our approach to inflation so that they could take a view on it and, if necessary, call for further evidence. So this was really the beginning of a process of discussion. I think what they felt was that we should not simply be silent on inflation just because the position was not clear; best to have a discussion and a debate and some clarity.

197. Mr Campbell QC: And presumably best to have an instruction, too, to the cost consultants who were reporting fortnightly or monthly or however often on one basis or another?

198. Mr Grice: Precisely; best to say, “£ 108 million, 1998 prices — we will worry about inflation at the end of the Project.” That is the norm; that is what they are used to and that is the clarity that we were looking for, and I think that we got there.

199. Mr Campbell QC: And is that the stratagem that was adopted?

200. Mr Grice: It was, indeed. I think it remains the position that inflation is identified separately. You will see in the cost report that there is, and has been for some time now, a separate line for inflation.

201. Mr Campbell QC: Are we to think of inflation in this context as simply the fall in the value of money between date A and date B, or are we to think of it in terms of local market pressures which inflate — as in blow up or increase — the cost of trade supplies, either labour or materials?

202. Mr Grice: Effectively the latter leads to the former, does it not, because it is basically the escalation in prices due to market pressures? Now that could be a local market or a global market, depending on where you are procuring. Yes, one pound buys you less timber in 2001 than it did in 1998; the value of that pound has gone down. But it is not general inflation, if that is the point you are getting at.

203. Mr Campbell QC: That is what I want to hear.

204. Mr Grice: It is building industry inflation. Even more precisely — and this becomes, as I understand it, increasingly difficult — building industry inflation is different in different markets.

205. Mr Campbell QC: So this is not what Gordon Brown talks about when he talks about inflation in his Budget speech or in the retail price index (RPI), the general inflation across the shopping basket of goods, when he says, “Well, inflation has stood still at 1•5% or 2%”? That is not what we are talking about here?

206. Mr Grice: My understanding is that building industry inflation is much more volatile. There have been periods where it has been zero, reflecting a depressed construction market, and also periods when I think it has been in double digit figures annually. But again, the professionals will make an estimate of that but they will always be very careful to tell you that inflation is something you can only observe accurately with hindsight. You cannot control it.

207. Mr Campbell QC: So you have to look back when you get to final account stage and see what has happened in the marketplace for that particular type of supply over the period with which you are concerned?

208. Mr Grice: Exactly.

209. Mr Campbell QC: And actually that is quite a sophisticated process?

210. Mr Grice: I believe it is, yes.

211. Mr Campbell QC: And no doubt relies to some extent on DLE’s own indices but also on local market knowledge?

212. Mr Grice: I think it is a mixture; they gather data and apply professional judgement to it.

213. Mr Campbell QC: Did the HPG have an understanding of how this would affect the overall price?

214. Mr Grice: I think they had a pretty good grip on it. They had the considerable advantage of having David Manson and John Gibbons on the Group, who were very knowledgeable on these matters. My recollection is that they to some extent led the discussion that we had.

215. Mr Campbell QC: You deal in paragraph 29 with granite, I think by way of example, but I am not sure. Is this just as an example of how the HPG engaged with one aspect of the cladding problem?

216. Mr Grice: Yes, it was an important one. Lest you think I have not, I have been following your deliberations, and I recall that granite came up as an issue, so I felt it was worth taking the opportunity not just to use it as an example but to give some explanation. It is not an unimportant package given that the external appearance of the building is heavily influenced by this material, and it was a particularly important procurement package.

217. Mr Campbell QC: What I really want to ask you is this: is there anything in here we cannot take out of the minutes in relation to the granite selection issue?

218. Mr Grice: I think there is a pretty thorough HPG minute of this.

219. Mr Campbell QC: The East Wing Package, which you start to deal with at paragraph 30, was a key problem package, was it not, because of the difficulties in realising the design, indeed the difficulty of executing the design before it was realised? That is right, is it not?

220. Mr Grice: Yes indeed. Absolutely.

221. Mr Campbell QC: And we can see from both the tender returns and the results that it has gone significantly over budget. I wonder if the HPG was really able to deal with this in any sort of meaningful way, given the very difficult and sophisticated engineering problems which were presented by these designs?

222. Mr Grice: They received advice from a number of sources apart from the architects. Of course Bovis themselves have a responsibility to the Client to advise on procurement strategy. I put this in partly because this was the first example that I am aware of of a so-called two-stage tendering process where you go out in the knowledge that you have not got it designed out to the nth detail. But partly for programme reasons and partly because it allows you to bring on board what they call “contractor design” expertise; you go with it. Now, it is a Bovis call. Yes, it is highly sophisticated and you absolutely rely on your Construction Manager to understand all of the intricacies of it and to give you good and clear advice.

223. But I do recall a very thorough HPG discussion on this, and again I do remember David Manson in particular having very clear views and advising the rest of his fellow members about the pros and cons of a two-stage process. He said the obvious advantages are that it allows you to keep moving with the programme, to keep momentum up. It clearly allows you to bring onside great expertise, but once you have let the tender, of course, you have lost the competitive position. So to some extent you put yourself in a difficult position over provisional sums because you are then negotiating them, not looking for the best price in a competitive environment. And I do remember still a very clear exposition — which I found very helpful — from David Manson on this in the context of the HPG. So I think the HPG had a clear understanding, but it has to be said that the effective advice from Bovis was that we had to go with it.

224. Mr Campbell QC: For programme reasons?

225. Mr Grice: And the HPG, the Project Director and project management all signed on for that Bovis advice, which they presented as really being the only way forward. But there was a very thorough and very good discussion to understand the issues.

226. Mr Campbell QC: But it is a tussle, is it not, at the end of the day, between a focus on programme or — putting it negatively — a focus on waiting until the design is set out before you go to tender?

227. Mr Grice: Yes, you could have spent another, say, two or three months. Option B, if you like, was to wait another two or three months, and a judgement has to be made on the price impact of having delays on site. A judgement has to be made as to whether actually you have the design expertise among the architects, if it is specialist. And I have heard this on a number of occasions — particularly, I would have to say, with some of the cladding and specialist glazing packages — that the real world-class design capability exists with the likes of Mero and companies like that. So you almost have to get them on board to help you to resolve it. But I accept entirely that it is a judgement call, and that is exactly what you look to your Construction Manager to advise you on. And their clear advice — although it was subject to some considerable interrogation, as I say — was that this was the best option to take in these circumstances.

228. Mr Campbell QC: Does any of this process involve coercing the architect into an acknowledgement that he cannot come up with the design without the contractor’s help?

229. Mr Grice: I do not think I am close enough to it to say to what extent there is coercion or whatever. My recollection is that when we have gone down the route, the architect has been accepting of that position. Whether they are accepting that if they had been given more time they could have done it, or whether they have accepted that they need that contractor design input, I could not say; I was not close enough to the individual packages. Somebody like Paul Curran or somebody much closer to the packages could probably give you a better answer on that.

230. Mr Campbell QC: If I looked for the starting point for a decision to eventually go with the two-stage tender, you said it is a Bovis call, so we might have Alan Mack saying, “Well, this is obviously a two-stage matter. Let us just go that way.” It might involve a rather sheepish acknowledgement from the architect that although he could design it out to a certain point he needed the expertise from Mero, or whoever, to bring it to the finished detail.

231. I can see how in either of those cases there might be hesitation because it involves, inevitably, confrontation — either the acknowledgement by the architect that he cannot do it or Bovis having to impose its view on the other consultants. Do you have any impression that decision-making in this regard has been the cause of delay?

232. Mr Grice: I am afraid I was just not close enough to the packages to say. I would entirely agree with you that it is a judgement call, and I would certainly accept — I think this is a point you made earlier — that view that architects, understandably, will look to get as much possible time as they can to do a design job. That is a normal thing to do. There comes a point where a person has to say, “Right. That is it. Time is up.” That would be the Construction Manager’s job. They have got to take this overview on where programme is all fitting together. They advise the Client.

233. I have to say that I have not myself — but this is from a bit of a distance, you have to understand — perceived among the architects great unhappiness. It has not been done on many occasions; it has usually been done where there has been considerable complexity. Certainly my impression — but as I say, that is from a distance — is that the architects have been accepting of that. But somebody closer to the big packages would no doubt be able to give you a better insight.

234. Lord Fraser: Sarah Davidson told us yesterday, in relation to one of the German packages, that she had been over there and there had been some confusion because the message that was coming from the Design Team in Edinburgh was not the same as the message that was coming from Barcelona. It would seem — as Mr Campbell is putting it to you — that in Edinburgh there was a greater willingness to see that we can design it so far and will leave the more expert, specialist bit to the actual trade contractor, but was there a problem that Barcelona wanted to design it all through to the last detail?

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235. Mr Grice: There are almost two elements to that, I think. The first is that; yes, if you have contracted designers there is an extra link in the process. If you have designed it out to the nth degree and said to a manufacturer, “Make those windows and fit them”, then fine. If you are saying to them, “Here is a design as far as we have got it; finish the design, make the windows and put them in”, you are introducing an extra link. That is one point, and that is certainly a consequence of two-stage tendering of this type. There is a judgement as to whether that, on balance, has been beneficial to the Project or not.

236. The point about the Barcelona architect wanting to continue designing things after the Edinburgh end has felt it has taken it far enough — it is certainly an impression that I have got, I think as Sarah Davidson reported to you yesterday. It has been my general impression that, especially when Brian Stewart has been in the lead on things, he has been prepared to take a pragmatic approach to when the design is suitably refined and has been willing to seek to accommodate the programme and other issues and certainly perception.

237. But, again, I would have to say, Lord Fraser, that I am several stages removed and I could not give you specific examples of where I have seen that in practice. I have certainly had that impression coming both through my own project management team and through the HPG and occasionally, it has to be said, from the RMJM end of the partnership.

238. Lord Fraser: I understand clearly enough, and we have had quite a bit of evidence on this, which is fairly obvious to a lawyer, that once you go to two-stage tendering without a price fixed you have lost the competitive advantage.

239. Mr Grice: Yes.

240. Lord Fraser: But what I had not really quite grasped as clearly as has come out of this piece of evidence is that maybe you actually need to go to two-stage tendering because your architects may have some wonderful concepts, but when it comes down to the final detail of it, you really do need to get your specialist trade contractor in to help you finish off how it should be achieved.

241. Mr Grice: That is exactly how I had it explained to me. I think we need to be clear that we are talking about a relatively few but key packages.

242. Lord Fraser: And expensive ones?

243. Mr Grice: And expensive packages, exactly.

244. Lord Fraser: Something like the Foyer Roof?

245. Mr Grice: Again, Mero is a good example and they are still very much in the picture in terms of getting the building finished. Ultimately they are going to manufacture and fit the windows but the actual detailed design translating — I think it was a lot more than just sketches, but even as far as it got, the actual buildability issues in design terms were very much involved in that process. Their judgement was not just a programme issue, but that expertise was needed and it was, therefore, programme aside, a sensible thing to bring them on board. You are absolutely right; the competitive position is much weakened at that stage and you rely on successful negotiations, which does not leave the Client in quite as strong a position as when it is in a competitive environment.

246. Mr Campbell QC: Paragraph 30 sort of glides into the site-wide exercise to find savings; these are the Alan Ezzi cost-cutting exercises, which he told us about. We already have the narrative of what happened to those. I put this to you really just for the sake of completeness because we have not seen it before. Ms Davidson’s letter to you of April 2001 from the HPG (CB/4/775) is quite long and quite hard to summarise, but I think the thrust of it is that in the end the HPG decided to go with quality over savings in respect of much of what Mr Ezzi had proposed. Is that fair?

247. Mr Grice: Yes, that is fair.

248. Mr Campbell QC: You were not at the meetings, were you?

249. Mr Grice: At that stage, yes.

250. Mr Campbell QC: You were at the meetings?

251. Mr Grice: Well, at the part of the meeting that Alan Ezzi was at.

252. Mr Campbell QC: Was that done with an understanding of the cost consequences of preferring quality over cost reduction?

253. Mr Grice: Yes. I think Alan Ezzi was able to give them an idea of the… these are savings forgone, if you like.

254. Mr Campbell QC: Indeed.

255. Mr Grice: As you say, they took some but certainly considered and ultimately rejected other ones. There was an estimated potential saving attached to those.

256. Mr Campbell QC: Forgone for what is set out here as quality reasons, quality of material, essentially?

257. Mr Grice: Yes.

258. Mr Campbell QC: In terms of exercises to try to achieve savings, did this form the foundation for subsequent exercises, within your knowledge, to try to do the same thing in other aspects of the site?

259. Mr Grice: I think this was almost the last opportunity to do this sort of exercise while there was still a reasonable amount of design. You reach a point — and, indeed, you are reaching a point at this stage in the Project — where you are building it at a very rapid rate, and I think it is very obvious from the file record that you are then taking judgements at a much finer level. This was perhaps the last opportunity to look at saying, “Well, we simply won’t build it that way.” Even at this stage it was very clear that we were right in the last opportunity because much of the debate focused around whether it was feasible and whether it was a sensible thing to do. I think this was the last opportunity to do a value-management-type exercise as Alan Ezzi attempted — well, he was successful in bringing forward proposals. I think thereafter you are looking at individual packages and the best you can do with them.

260. Mr Campbell QC: You are looking at an accumulated momentum, are you not, which is very difficult to interrupt once you have designed to a certain stage and with construction in progress?

261. Mr Grice: It is enormously difficult and construction management makes it harder still. If you were still on a drawing board your on-costs, if you like, would be quite modest, but when your on-costs actually involve construction on site, that momentum you talk about is very clearly there and kicks in at a much earlier stage in the process. By this stage, of course, an enormous number of tenders are out as well as an awful lot of building, so we really are, I think, at the very last point, which is why Alan Ezzi took the initiative and did it at the time.

262. Mr Campbell QC: How would you characterise the reaction of the architect to those proposed cost-saving measures, without delving down into the correspondence?

263. Mr Grice: Resistant.

264. Mr Campbell QC: Can you tell me if you have a perception of whether this was a sort of precious resistance to preserve their design at all costs, a knee-jerk reaction or something else?

265. Mr Grice: No, I think it was a well-argued and principled resistance on grounds of quality and durability. They are different. If you could bear with me I could give you a couple of examples because they were different. For example, there was the proposal to put columns under the cantilever on the Canongate building. Now that building makes quite a dramatic impact as you walk down the Canongate because of the cantilever. Alan, I thought, had quite cleverly come up with the idea that if you put columns under it, you can put a much smaller cantilever in, and that in itself would generate significant savings, but obviously you lose the dramatic impact of the cantilever.

266. Another particular idea he came up with — again, I thought a perfectly good idea for discussion — was instead of having solid cast concrete vaults you would use a render applied to a frame and apparently that would have produced results.

267. But on both those occasions I thought the architects looked at them quite carefully and they resisted them on the grounds that, in the first place, it would lose this dramatic impact that Miralles had been looking to get and, on the second one, that this solidity of form was important. There was also some debate about structural issues as well, I remember, so the structural engineers were brought in. So in no sense would I describe it as knee jerk but they did not agree with them, perhaps not surprisingly, and they made quite a strong defence as I recall.

268. Mr Campbell QC: I really just wanted to get from you your characterisation of their resistance.

269. Mr Grice: Sorry, that was rather a long answer. It was a thoughtful resistance.

270. Mr Campbell QC: That was accepted, you tell us in paragraph 33, by the Corporate Body, who seemed to have become re-engaged at that stage, momentarily, to look at potential for site-wide savings.

271. Mr Grice: I felt that they had to be because, under the terms of my own delegation, I felt if we were going to — for reasons I understood — take a decision to forgo quite significant potential savings, then the Corporate Body, as the Client, should be engaged with that. They were engaged at two stages. There was an initial discussion and they gave an initial steer that quality mattered, and then the HPG put to them a quite detailed written report, which the Corporate Body considered, and they agreed absolutely with all the recommendations of the HPG, which were in effect to accept some and reject other potential savings.

272. Mr Campbell QC: You talk in paragraph 34 and in the following paragraphs about the post of Project Director. What gave rise to the concern that you articulate in paragraph 35 about the members of the Design Team’s ability to work together?

273. Mr Grice: I was reasonably closely engaged at that time through attendance at HPG meetings and others, and I was simply observing that the team did not appear to all be pulling together. It was just a lack of harmony; the team was not harmonious, and I have to say that at that point working relationships across the piece were not good between the Progress Group, the Project Director and the lead consultants, and so the whole thing was difficult.

274. This project has been tense for five years now, so harmony has to be seen in that context but, nonetheless, at that stage I observed. There have been plenty of occasions when the tension on this project has become very, very difficult, and obviously one must not move too quickly. You look to try and solve that, and that is indeed what I did, but it was about that stage. I am just trying to give the Inquiry an idea from the point at which I started to observe from where I sat, from discussions I had with Alan, from comments I picked up around the HPG table and, indeed, as I record, subsequently in direct correspondence from Brian Stewart that things were not well on a range of fronts

275. Mr Campbell QC: I think Brian Stewart goes into quite strong language in relation to what he calls “Mr Ezzi’s performance”; paragraph 36 of CB/5/511 is an example of that. Are you talking to me about something that was really your sixth sense in connection with these relationships? Was it an atmosphere? Was it a specific incident or a series of incidents? What was it that put you on the alert for this?

276. Mr Grice: Obviously in my job a lot of it is about getting people to work to do what they are supposed to do, and people work best when they are all pulling in the same direction. I accept that is stating the blindingly obvious but you can tell when people have not got a good body language; all sorts of things will tell you that. But there came specific examples, not least Brian’s letter. I was sitting around HPG meetings and clearly the nature of exchanges did not suggest to me that this was a harmonious team looking to resolve difficult issues together but was actually a team where expectations on each side were not being met. It then, of course, over the next month or so, became far more specific in terms of specific complaints. Early on I just observed that it was not working; there was tension and the atmosphere was sometimes quite critical.

11.30 am

277. Mr Campbell QC: Mr Stewart came to you, did he not, in April 2001? CB/5/581 is the letter you are talking about is it not?

278. Mr Grice: Yes.

279. Mr Campbell QC: He starts by saying that he agrees that there must be an effort to improve candour and openness. He then says:

280. “The Project has never been easy for us for reasons of which you are well aware. The Barcelona/Edinburgh interface has caused us difficulties.”

281. Although he says:

282. “I am happy to say that our relationship is working extremely well at present. We have not always found the Client easy to read.”

283. This is a theme that surfaced again and again in his oral evidence to the Inquiry. But then he dismisses them and says:

284. “These are not significant in relation to what I understand to be the current concerns… We have struggled to engage DLE sufficiently in the design process.”

285. He then goes on to talk about Mr Ezzi and his perilous relationship with Mr Ezzi. Mr Stewart is a man who chooses his words quite carefully, at least in correspondence, as I have seen it. In your precognition you point to the first sentence of this paragraph and say that that is in contrast to the evidence that you evidently listened to or read that he gave here recently. What is the contrast that you would like us to pick up?

286. Mr Grice: I got the impression from the evidence here that Brian was saying that he had a perfectly good and amicable, harmonious working relationship with Mr Ezzi. You were here and I was not. If that is not the case, then fine. I think what I am stating here is that he had anything but a harmonious and amicable working relationship with Alan Ezzi. Indeed, in my experience it was quite the opposite.

287. Mr Campbell QC: I wonder whether we might be at cross purposes here: this paragraph begins by talking about DLE, as does the quotation in your precognition. It goes on to talk about Mr Ezzi in less than complimentary terms. Is there a distinction to be made there? How would you characterise —

288. Mr Grice: I used it as an example, as I was rather struck, as I say, by Mr Stewart describing in glowing terms the role that Mr Ezzi performed. All I am saying to you is that he took a different tack at the time, and this correspondence was an example of that. I think what Brian Stewart is saying there is that things have not gone very well with DLE or with the Construction Manager but what has made it even worse has been, in Brian Stewart’s opinion, the approach taken by Alan Ezzi.

289. Mr Campbell QC: We can note that, and I pick up now what you say, in his second precognition, paragraph 43:

290. “From our point of view he appeared to have a good working relationship with the team. He was certainly immersed in the detail and understood how the architect (both parts) worked and spoke with some degree of knowledge and therefore authority about our performance. His engagement was simply too late in the process and he did not hold centre stage in a complex client structure.”

291. You have picked that up as an apparent contradiction?

292. Mr Grice: I think it is obviously for you to judge, but I just felt it was important.

293. Mr Campbell QC: I wonder what your perception was of the important relationship between the architect and DLE at this stage, given our focus on cost in this Inquiry?

294. Mr Grice: I did not get the impression of fundamental problems. Clearly, there had been from the HPG’s point of view; they were less than happy, if you like, that some key packages were appearing to come in very expensive. So they were wanting to know why that was the case. Had the architects designed it to a greater degree of complexity than was necessary? Had the cost consultants failed to predict the cost? Had they failed to work together effectively? Or was it simply a consequence of the market? So there was some concern on their part.

295. But, as I record later on, obviously I was concerned all round at that time, so I called a meeting of all the leading players to my own office. That was obviously a difficult meeting; there is no point in saying anything different. But I have to say that at that meeting I did not observe particular difficulties between the architect and the cost consultant. They were certainly giving me assurances of their ability to work together.

296. Mr Campbell QC: Do you think that there is an inherent difficulty in a body which meets only every fortnight inevitably looking at the news it gets with a jaundiced eye just because that news is not favourable and wishing to pass the responsibility on for the bad news?

297. Mr Grice: No.

298. Mr Campbell QC: Is that not what happened here? Because the HPG meet only every fortnight, whenever the news is not good or is off-colour in some way that the finger will start to be pointed much too quickly before there is a proper understanding of why the news has developed as it has?

299. Mr Grice: I do not think it is the focusing on the frequency of meetings that is really the issue; I think it is where you sit in the chain. Although, obviously, I am not a member of the Progress Group, where I sit in the organisation my experience is that you get brought the difficult stuff, quite honestly. People do not, as a rule, walk in my door and tell me that everything is going fine; I just assume that is the way it is. They walk in my door and tell me that a wheel has come off here or, if I am lucky, a wheel is about to come off over there. So you tend to get those difficult issues.

300. For the Progress Group it was a mixture of routine reporting, so I would not want you to think that they got a diet of bad news. But yes, clearly, they are dealing with the big and difficult issues, and the big and difficult issues would tend to be around quality, cost and programme. But it was certainly not my impression at the time that they were looking to shift the blame. Clearly, no group is happy to be told bad news. By and large, and I have felt this myself, you will always hope and wish that you were told earlier.

301. Probably the frustration on their part was that they felt the Project Director was not giving them good enough and clear enough advice. He in turn, as I tried to say in my precognition, felt that they were perhaps not giving him the latitude to do his job. I think at the heart of it all was a lack of a shared understanding of their role and his role. I do not think that Mr Ezzi ever fully accepted the role given to the HPG by the Parliament.

302. In turn, as the relationship broke down, they lost their trust in the Project Director. And when you lose your trust in somebody you are much less inclined to let them get on and do it; you are more likely to be on top of them. That is the process I observed. I do not think it was a function of the lack of frequency of meetings; it was just the nature that they are a body that was working on the difficult issues.

303. Mr Campbell QC: I wonder whether it might be a function of a process like this that when difficulties emerge, a responsible and capable manager will try to solve them before he takes them to his boss or his line manager or, in this case, to the HPG, so that, inescapably, something which emerges as a problem may be the subject of an attempt to solve it before it is brought up?

304. Mr Grice: If you will forgive me, I have done that myself in the past on this project and got into trouble for it. You have to take a judgement, that is the honest answer. At that level you are talking about a very senior person here. Our job is to take those judgements.

305. Mr Campbell QC: But the inevitable consequences of this is where you have a vocal board that wishes to be involved and wishes to keep itself well informed that it is going to be surprised and indignant when it gets news which is of a dramatic nature.

306. Mr Grice: It is going to be unhappy, yes. Could I possibly ask for a five-minute break?

307. Lord Fraser: Yes. We will take a break.

Informal break at 11.39 am.

Hearing resumed at 11.46 am.

308. Mr Campbell QC: If I can I take you to paragraph 37 of your precognition, please, moving on a little bit from Design Team difficulties.

309. You have said to me several times, both now and on previous occasions, that sometimes it is important not to move too fast and to try to work through a problem before taking a decision. With Mr Ezzi, you had a pretty trenchant view from Mr Stewart in his correspondence; I daresay it was corroborated in other ways. Does it come to this, that eventually you had to see him and put these sentiments to him?

310. Mr Grice: Yes. Obviously I discussed the matter with Alan. My view to taking decisions is that you take the best decision you can in the time you have got, and that might be very rapid and it might be over time. Just because I get a trenchant letter from Mr Stewart does not mean to say that.

311. But clearly it is a sign, as you say. He chooses his words carefully. He, as the Design Team leader, in a very important position, is basically telling me that he is having great difficulty working with Alan. So I discussed that with Alan and with Alan’s agreement I called a meeting with all the lead consultants, because, as you rightly pointed out, there is also reference in Mr Stewart’s letter to a less than ideal working relationship with the other consultants. I felt the sensible thing was to get them all together and sit down and see whether we could find a way through this. At the end of the day, these are all highly experienced men working in the construction industry, all at the top of their professions, if you like. I wanted to find out why on earth they could not work together.

312. Mr Campbell QC: Did you get an answer?

313. Mr Grice: I received assurances.

314. Mr Campbell QC: It is not the same thing, though, is it? That is an effect not a cause.

315. Mr Grice: It was pretty deep-seated and these are difficult things to resolve. I made clear my expectations.

316. Mr Campbell QC: I am sure you did. You make it clear that that is your style. However, making clear your expectations and analysing the cause for the disruption in the first place may not be quite the same thing. Is this about professional approach to a difficult project? Is it simply about personalities? What is it about?

317. Mr Grice: I think it is a combination. There was certainly a personalities issue there, as far as I could detect it. There was also an approach issue. I think the consultants, and the architects in particular, found Alan’s approach difficult — what they called this “divide and rule” approach. So it was a combination of the two. I was looking to understand a situation as best I could. These people spent a lot of time working together. Inevitably what I get is a distillation of each of their positions and views, so I was trying to take a clear judgement, basing my judgements on analysis, always guided by what is the best thing for the Parliament and what options I had. My initial view, as it would always be, is to try to understand that and to try to find out what is bothering people. Is it something that can be resolved?

318. That meeting was very much exploring what the difficulties were. I got each of the key players to tell me in front of their colleagues, because one thing that I observed was that there were lots of bilateral discussions about people’s concerns. I wanted them to discuss, in an open forum with their colleagues present, what they felt were the problems, because if we do not understand what they are, how could we look to address them? So the assurances I got were not simply, “We are all going to be friends tomorrow and get on together.” I did not really care too much whether they liked each other; I was interested in whether they could work together.

319. So we looked at what the problem was and it was a classic “clear the air” meeting. I thought we had a way forward but I was not kidding myself. One meeting might be a helpful starting point but fundamentally it came down to these individuals being prepared to make a go of it. There was nothing stopping them doing that.

320. Mr Campbell QC: Aside from their perception of Mr Ezzi and the sort of difficulties expressed by Mr Stewart, did you get a better insight in that process into their capacity for working with one another? I should highlight, obviously, DLE, RMJM and Bovis.

321. Mr Grice: I certainly concluded the meeting by feeling that there was. I did not leave the meeting feeling that there was no hope. I left the meeting feeling that we have moved things forward and that there had been an opportunity for people to express their frustrations and concerns. Questions had been posed and answers given around the table. So I felt it was a starting point to a possible turning around of these key relationships; that was the output from that meeting.

322. Mr Campbell QC: Was that a meeting to help you to understand or a meeting for you to give a definite direction, such as failure to work together in an amicable or harmonious way, at least, might have dire consequences?

323. Mr Grice: It was both. It is only fair to hear people out. I had had a lot of discussions with Alan, as he was a member of my staff, and I had had the letter from Mr Stewart. So I had a certain amount of information but I think it is important to give people an opportunity to say their piece. That was the first part of the meeting and the second part was about, “What are we going to do about this?” I thought it was important too that they were clear on my expectations and I was speaking here very much as the Client.

324. Beyond that, what I wanted was some constructive suggestions as to how we get on. It was mostly between themselves as to how they could communicate better and have a shared understanding. And I got a degree of comfort.

325. Mr Campbell QC: Did you get any steer from them about changes in the organisational structure which they perceived might be advantageous?

326. Mr Grice: No. I do not think that anybody made any suggestions of that nature.

327. Mr Campbell QC: In the end, what did you conclude about Mr Ezzi’s tenure of the post of Project Director?

328. Mr Grice: In the end, subsequent to this meeting, I know we focused on the difficulty with the Design Team members, Brian Stewart in particular, but it was really the communication to me from the Convener of the Holyrood Progress Group effectively saying that they had lost confidence in the Project Director that was the most significant.

329. Mr Campbell QC: I do not want to dwell on this any more because time is not really on our side — programme and all that — but did you come to terms with Mr Ezzi before his departure?

330. Mr Grice: Yes.

331. Mr Campbell QC: Let us talk about the appointment of his successor, if we may, which was not without controversy at the time. Can I ask you, please, first of all: did you consider having a competition for a replacement?

332. Mr Grice: Yes.

333. Mr Campbell QC: What decision did you reach?

334. Mr Grice: It had taken six months to recruit Alan Ezzi from the competition starting. I took a view that the Project could not afford to have a period of six months without a settled Project Director. I took a view that the then Bovis programme was pointing to a completion date still of December 2002, so I would effectively have been offering somebody not much more than a year’s contract. I had been through a recruitment exercise to secure Mr Ezzi’s services and I felt very clearly he was the best person for the job. So I felt that a competition was simply not viable and was not in the interests of the Project at that time. But yes, that was my first thought.

335. Mr Campbell QC: From a Civil Service background, you would be aware that that was an unusual route to take to a senior appointment.

336. Mr Grice: Our recruitment processes in the Parliament — I cannot speak for the Civil Service — are that where we are filling a permanent post we go to external or internal competition as the norm. Where we are filling a temporary or fixed-term post, which this post is, then we play it on a case-by-case basis. So you have to look at it case by case. This was both temporary and fixed term, and so we fill those sorts of posts through a variety of methods including competition but sometimes by direct appointment.

337. Mr Campbell QC: You must have perceived, when Mr Ezzi was appointed, that what you required was a project director with construction experience, and indeed we can see that from the documents we looked at. Please explain to me your thinking in relation to the nature of the replacement that you were seeking.

338. Mr Grice: I was looking for a range of skills when we appointed Mr Ezzi: leadership, communication and intellect. They are all very clearly stated in the job description. But you are absolutely right, I took a view at that stage that a construction background was important as well. At this point, of course, having tried to fix the problem and concluding that it could not be fixed, I stood back in the time available and thought about what the issues were.

339. I consulted Dr Gibbons and the Convener of the Progress Group as well as the Presiding Officer to help me to reach a view on this. I came to a view that one of the problems was that Alan had, in fact, been doing a job more as a senior project manager and that had led to some issues with his project management team as well. The key to all this was somebody who — back to, if you like, Mrs Doig’s bow tie — could sit in the middle, communicate, bring people together and give the thing direction and purpose. And somebody, critically, who understood what the Client wants. You cannot be the Client’s representative effectively unless you understand what the Client wants.

340. So that led me to the view that construction experience was not essential. But as I say quite clearly in my precognition, if I was going to do that I had to think very clearly about where that construction expertise was going to come from. I have explained my approach to that in my precognition, which was to strengthen project management, give it a clearer role and allow it to do its job, which was to manage.

341. I was further strengthened in the position by taking Dr Gibbons onto the Parliament’s books at that stage, pretty much full-time. I was also aware that the Progress Group by this stage had got into its stride and it had professional capacity on it. So looking at the whole piece together, I judged that the overriding skills I needed in the middle were those I describe in my precognition. Construction industry experience was not essential. What was important, though, was to understand the Project and understand what the Client wanted.

342. Mr Campbell QC: What does “understand the Project” mean — the procurement of the building?

343. Mr Grice: Back to the debate we were having earlier — the nature of the building. There are plenty of people who will tell you how to build a room and put services into it. Fine, and we have got some top people on the job both in Bovis and in our own Team to do that. I do not think there has ever been a problem throughout this project in the quality of project management. Whoever has been in the job, I think they have all been people who have shown themselves to be extremely competent. Where I think we have had difficulty is at that level above, that holding of the ring. So I reflected on the view I had taken a year or so earlier and came to a different conclusion.

344. Mr Campbell QC: Does that mean having, as it were, argued yourself into that position that it was inescapable that whoever you appointed would have to have knowledge of, and come from, the parliamentary organisation?

345. Mr Grice: First and foremost they had to have the communication, leadership and interpersonal skills, wherever they came from. But yes, I came to the judgement that understanding the political environment and context was essential if you were going to work with the Progress Group, the Corporate Body and the wider membership. Bear in mind that there may well have been people outside the organisation but it would be hard to think of them. Where you would find those skills predominantly would be within the Parliament itself.

12.00 pm

346. Mr Campbell QC: What is the characteristic of the Client that gives it that special quality which you call several times “political”? Can I just enlarge on that question for a second?

347. Mr Grice: Yes.

348. Mr Campbell QC: We are procuring a building: we know that it is to be iconic; we know that it is to be special; we know that it is to be a multi-user building, and that it is architecturally unique in the world. Those are all givens. You have several times said that you needed somebody who understood the political nature of the organisation. What I am having trouble pinning down is understanding what that really means, over and above demands for space in the complex for particular purposes.

349. Mr Grice: It is a hard quality to define, I will be honest with you.

350. Mr Campbell QC: That is why I asked you the question.

351. Mr Grice: It is being able to operate in a political environment, amongst politicians, in that goldfish bowl and in that environment where you get a range of very strongly held opinions, often at quite extreme ranges. It is to be able to work with the Progress Group, three of the seven members being MSPs. It is somebody who fundamentally understands that it is not just putting together the rooms and the roofs — we have people who can do that. It is somebody who can actually grasp — I do not mean in a technical sense — the notion of what a Parliament building is for; somebody who can work comfortably with politicians. They are a particular group of people with a range of opinions who require an acceptance as well as an understanding. This applies to my own job. It is not just a question of understanding; it is accepting that that is the way it is in a political environment and being able to work with that.

352. Mr Campbell QC: Are we talking, Mr Grice, about anything more than a group of people with strongly held views that do not always match one another?

353. Mr Grice: They are the elected representatives of the country, so yes, we are very definitely talking about more than that.

354. Mr Campbell QC: That is a given too; MSPs, of course, are elected representatives. But I do not see, and I do not understand, how this particular characteristic of political people impacts on the procurement of a building. You are not talking to me about individual demands from individual MSPs about the use of space, adjacencies, entrances or private areas or anything of that kind. You are talking to me in a diffuse way about a client which has a special quality. I need to understand how that impacts on the procurement process, and I am not there yet, I am afraid.

355. Mr Grice: It is the whole process of building. You are building a home for the Parliament, for these people and for their successors, and you are operating in a particular environment. It is an environment that is subject to intense media and political scrutiny, in addition to all the complexities of the building itself. It is a person who can cover both of those bases.

356. Mr Campbell QC: But scrutiny should not impact on cost. Scrutiny should be there anyway.

357. Mr Grice: No, but I would argue — and there is plenty of evidence for this — that the level of political and media scrutiny of this project has been — I cannot find any example of it anywhere in the world. It is a person who can both ensure that construction takes place and operate in that environment, in other words, that that sort of intensity of pressure does not cause them to collapse or, as I think was the case with previous people, to put that to one side effectively and say, “Right, I am just going to focus on the building of the building.” I had Project Managers who could do that; I needed someone who could talk the language of the Project Managers, who could earn their respect and the respect of the key consultants, but who could also be sensitive to, and work with, this political element. That is what I am trying to describe to you. I think that is what makes it unique.

358. Mr Campbell QC: Did that person have to be in charge of the Project? I accept all that you say about Ms Davidson’s communication skills, and if I may say so, they are perfectly obvious from her appearance yesterday. Why not simply divorce the communication job, either upwards, downwards or outwards, from the invisible man who is at the centre of the bow-tie knot and actually getting on with building the building, controlling costs, hammering Bovis’s programme and doing all the myriad of jobs that a project director would need to do?

359. Mr Grice: If that person is not at the centre of it, they cannot do that job. It is easy to think of this mythical hard man in the middle taking these decisions.

360. Mr Campbell QC: I was trying not to use that expression.

361. Mr Grice: I know. Indeed, arguably, that is what has been tried in the past on a couple of occasions, certainly with Alan Ezzi, but what was very clear to me is that the person cannot do that job unless they are able to take with them the political aspirations of the Parliament. They have to be able to square that circle. You cannot have this person sitting outside that — it just does not work. What happens is what happened: that person drives on and starts trying to take decisions they think are right and they run up against the expectations and aspirations of the Parliament itself. Unless you can find a way to square that circle, you cannot perform that role. Therefore I took the view that I wanted somebody who could do that.

362. Mr Campbell QC: Would it have been conceivable to construct the sort of organisational chart that I have figured to you, but with the invisible hard man in the middle, and to have kept the communication skill outside of that role?

363. Mr Grice: Not in my judgement.

364. Mr Campbell QC: Would it have been conceivable to say to the MSPs, in whatever manifestation, “Look, guys, just wait. We are doing it; we are doing it the best we can. I know you are interested and please come and visit, but you really just have to wait”?

365. Mr Grice: They were not interested; they were in charge.

366. Mr Campbell QC: It is a serious question.

367. Mr Grice: I am making a serious point. They were in charge — that is the important point. At the end of the day, the Parliament is the Client, and it is simply not feasible. I have made the point about there being different types of chief executives/managing directors. There are some who run the organisation. But in this organisation, our elected representatives are in charge, and you need to be able to, as I say, square that circle. And it is incredibly difficult. It requires a particular grasp and understanding and acceptance of that, and yet not going so far over to that side that they forget that what they have actually got to do, as you rightly say, is procure a building to match that, which at the end of the day, yes, is made up of walls and ceilings and electrical cables.

368. I think it is a very complex job. You do need that person, and they need to be fully empowered to sit in the middle and to pull the whole thing together. Essentially, the job I asked Sarah Davidson to do was very similar in many respects to what I wanted Alan Ezzi to do, in that communication sense, but I took the view that it was maybe a handicap to bring somebody in and they thought they then had to manage the Project as well. No, we had good, effective project management, and they need to be given the information and the authority to do it. That is the approach we took.

369. Mr Campbell QC: You could have solved the Alan Ezzi problem by bringing Martin Mustard into that post. He was second, I think, after Mr Ezzi in the interview.

370. Mr Grice: I could have done, but that would have weakened the project management. Martin was a good project manager. I had the best of both worlds; I had Martin continue in that job. And with all respect to Martin, who is a good guy, it was my clear judgement that Martin could not have done the bringing together of the political aspirations and the construction idea. What I decided was to have Sarah and Martin.

371. Mr Campbell QC: So you appointed Ms Davidson, who was at that time the Secretary of the Progress Group; she was on your staff anyway but seconded even at that time from the Civil Service?

372. Mr Grice: She is a secondee, yes.

373. Mr Campbell QC: And that is still the position, is it?

374. Mr Grice: It is.

375. Mr Campbell QC: Why has that remained the position?

376. Mr Grice: Because in a few months’ time she will be out of a job.

377. Mr Campbell QC: But she had been Secretary to the HPG as a secondee. I understand why, if the project directorship was in isolation, she might be a secondee. Why has she not ceased to be a civil servant and become a Parliament employee?

378. Mr Grice: It was not necessary. As I say, she has got to think about where she would go at the end of this project, and as a secondee she will return to her host Department.

379. Lord Fraser: Can I just get one thing absolutely clear in my mind, Mr Grice? Ms Davidson said in her precognition yesterday:

380. “At the time of Mr Ezzi’s appointment, the organisational structure was reviewed and my formal title changed to ‘Director of Policy’ to reflect the wider nature of my role.”

381. That is factually correct, is it?

382. Mr Grice: It is factually correct.

383. Lord Fraser: Was she not then discharging exactly the sort of function that Mr Campbell is suggesting to you was an appropriate one for her to do without having to take on responsibility for the pouring of concrete and all the other construction aspects of it?

384. Mr Grice: I certainly added to those. Yes, she was doing some of those. She was handling all the parliamentary questions, all the external communication issues, but she was not doing, if you like, the internal communication issues, so I added to that post. But yes, she certainly retained quite a few of her other functions. We appointed a new Secretary to the Progress Group.

385. Mr Campbell QC: In paragraph 46 you talk about the cost cap and specific programme target dates. We can read the debates for ourselves. What did the SPCB have to say about having regard to quality?

386. Mr Grice: They had clearly demonstrated, particularly in response to the site-wide savings recommendations, that quality was extremely important. But what was crucial, I think, about the 21 June 2001 resolution, apart from moving things on in terms of the cost cap, which we discussed earlier, was that it contains an extremely important central phrase, “without compromising quality”. It was not even “have regard to” but “quality must not be compromised”. That is the instruction. In fact, they use the word “directed”, which is a lift from section 21, I imagine, of the Scotland Act, so this is very clear parliamentary language, directing the Corporate Body through the Progress Group to complete the Project without compromising quality. So that was a very clear instruction. It went with the grain of the HPG and the SPCB view.

387. Mr Campbell QC: Do you think Parliament has had an understanding that in so directing it was, if I may put it in a deliberately perverse way, limiting the potential for savings in the course of the remainder of the Project?

388. Mr Grice: I think that is a reasonable assumption because the report that the Corporate Body put to the Parliament ahead of that debate actually included a dialogue around the savings which they had chosen not to take on grounds of quality. So the Members taking that decision and adopting that resolution could be reasonably expected to have understood what was in the Corporate Body/HPG mind. I do not think the HPG and the Corporate Body made any bones about it. They were very clear, as they continue to be, that money matters, and they will obviously look at every opportunity to control costs. Nonetheless, this emphasis of quality was not just in the resolution, but there were examples of where they had gone for quality over cost savings in the report that was put to Parliament.

389. Mr Campbell QC: We had reached a point, had we not, by now in the Project where the Client, in whatever manifestation, had become really dependent upon Bovis for rolling out the remainder of the Project?

390. Mr Grice: Yes.

391. Mr Campbell QC: Little could be done by the HPG or the SPCB either to accelerate or to hold back progress on the Project?

392. Mr Grice: There is an enormous momentum behind a project at this stage; you are right.

393. Mr Campbell QC: Had you ceased to attend HPG meetings by this stage?

394. Mr Grice: Yes; I cannot remember exactly — an analysis of their minutes would show it. I think I stopped attending around the late summer or early autumn of 2001. I occasionally joined them for a brief discussion on a specific topic, but I have not attended them routinely since then.

395. Mr Campbell QC: In paragraph 49 of your precognition you refer to the short schedule that is attached to your precognition. Tell me what you would like the Inquiry to take from this schedule.

396. Mr Grice: I felt, as I was thinking through the precognition myself and trying to get clear in my mind the various steps, that the Inquiry might find it helpful to have, if you like, a summary of the key movements. Another key feature of the 21 June 2001 resolution was that it required —

397. Mr Campbell QC: Mr Grice, can I just interrupt you? Can you go to page 26 of your precognition? It is my fault entirely. Can you begin that answer again?

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398. Mr Grice: The 21 June 2001 resolution had required the Corporate Body to report quarterly to the Finance Committee. That has been upped to monthly reports since Mr Reid became the Presiding Officer, and I thought it might be helpful to the Inquiry, because there is a massive amount of information, to distil the key movements. What you see is that a number of things are happening. First, because of complexity of design and resolution of blast, it is proving to be more difficult. You are seeing revised programmes; as one programme is not met, another one is produced.

399. You are also seeing, even as programmes hold, that complexity within that programme is increasing, and that in turn is driving cost. That is rather a simplification, but that is essentially what I was trying to demonstrate for your benefit here.

400. Mr Campbell QC: So the figures in the second column, just to be clear: are they designed by you in this table to reflect overall cost rather than just construction cost?

401. Mr Grice: Yes. These are equivalent, if you like, to the £195 million, except inasmuch as they include inflation — that global cost — and they reflect the costs which were reported to the Finance Committee.

402. Mr Campbell QC: Page 27. That shows us up to the beginning of this year, £401 million.

403. Mr Grice: I am sorry to say that that has, of course, been superseded again.

404. Mr Campbell QC: I think we are now sitting at £431 million?

405. We should recognise there, should we not, that that includes contingency of £40 million odd?

406. Mr Grice: Indeed it does, yes.

407. Mr Campbell QC: And also recognise that Mr Fisher’s view is that that is likely to be spent? You may not have heard his evidence.

408. Mr Grice: No, I am aware of his views on the matter. And also recognising that these are still estimates, and that the final out-turn will depend on final settlement of accounts, which I think is a point I made last time I gave evidence.

409. Mr Campbell QC: The decision to report quarterly and then monthly to the Finance Committee is essentially a backward look, is it not, by the Finance Committee at what has happened since the previous report?

410. Mr Grice: There has been a strong element of that. As Ms Davidson noted to you yesterday, she, Robert Brown MSP, John Home Robertson MSP and I go to the Finance Committee and are questioned in detail on the report. There tends to be a combination of a retrospective, but also a forward look, because when we go with the DLE cost report, as I think you have just noted, there is an attempt by DLE on each occasion to predict what future changes might cost and express that in financial terms. So there has genuinely been a “how did we get here?” and “where are we going?”

411. Mr Campbell QC: Is the Finance Committee capable of exerting any downward pressure on those on the site, as it were, to keep down rather than just to manage costs?

412. Mr Grice: The Progress Group and the Corporate Body have that responsibility. The Finance Committee is twofold: one, it certainly applies pressure, because they are the Finance Committee and they apply that sort of discipline; but really it is a means to get the figures into the public domain, if you like, and have a public forum for debate and scrutiny to get as much information to members of the public and to Members of Parliament. So it is that device; of course, yes, the Finance Committee at that very broad level are pressing us, but I would have to say that the Corporate Body and the Progress Group, despite the emphasis on quality, have always been very clear that you do not spend any more money than you absolutely have to.

413. Mr Campbell QC: I understand that. I just wanted to see whether the Finance Committee’s involvement was a comparatively recent feature.

414. Mr Grice: Yes.

415. Mr Campbell QC: I dare say attending in front of them is a horrible experience once a month, or at least it concentrates your mind, as Ms Davidson says, but does it exert a downward pressure which you are able to transmit further down onto the site?

416. Mr Grice: It is not a horrible experience. It is part of the normal scrutiny process. Quite seriously, I think the comments and reaction of the Finance Committee help to remind us all that this is costing money and that despite the difficulties, we must never give up on that. So they have played a role, but very much at a strategic level, which would not be capable of being translated into specific actions on site.

417. Mr Campbell QC: You deal in paragraphs 51 and 52 of your precognition with the question of capping fees. I do not want to take too much time on this, but there are two matters I would like to ask you about. The first is that I am trying to understand the rationale for suggesting to those who are contracted to you that for some reason they should cap their fees.

418. Mr Grice: The rationale is that we are dealing with public money and that we want to limit that. The rationale is that we want as much cost certainty as we can achieve, and I think whilst we are not contractually entitled to it, we are perfectly entitled to ask for it, and that is just what we did.

419. Mr Campbell QC: But it cannot be on the basis that the Project has gone over budget, can it, because after June 2001 the cap has come off?

420. Mr Grice: The cost cap was neither here nor there in terms of fees, because fees are, as you know, derived either from a percentage of the construction cost, whatever that happens to be — and that of course is whatever any statements are; it is the actuality of the construction cost, on the one hand. Depending on which consultant we are talking about, there is also an element for covering site and other organisation costs. So the rationale on fees from a client point of view, notwithstanding the contractual position, seemed to me highly desirable, that if we could get a cost cap, it is a way of trying to transfer some risk at least away from the Client.

421. Mr Campbell QC: Are the consultants not an easy target in a situation where there is a wide public perception of cost overruns — a much easier target than the building itself?

422. Mr Grice: No, I have never seen them as a target. Indeed, I would like to think — and if you have seen any evidence I have ever given to the Finance Committee or other Committees — that I have never sought to target the consultants. It is a difficult thing to go before the Finance Committee and explain another cost increase. I hope I have always resisted any temptation to lay the blame at the consultants’ doors.

423. But the reality was that I think as the Client, given that the construction cost of the building was considerably higher than was originally envisaged, that we were entitled to at least approach them to discuss a cost cap. I think their reaction in principle at that time was fairly positive. Their reaction, certainly as far as the architects were concerned — perhaps I should be more specific here: certainly as far as Brian Stewart was concerned — was in principle that he was happy to enter those negotiations.

424. Now, they did not make particularly good progress, but I suppose from their point of view, to have fee certainty, provided it was reasonable — and I say this in my precognition — could be said to offer them some knowledge of what they were working to.

425. Mr Campbell QC: It was said, I think by Mr Stewart, that he, on behalf of the joint venture architect, came forward, from my recollection in March 2002, with a proposal that they would agree to cap their fees.

426. Mr Grice: It is my understanding — and I could not comment specifically on that, I am afraid — that fee discussions were ongoing. But at the end of the day, it is not the process of negotiation, it is what it actually delivers, and my understanding from project management is that that had not produced a resolution. In fact, that much was patently obvious because a year later there had not been an agreement.

427. Mr Campbell QC: I did not put it to you in those terms, though. It was not that it had produced a resolution. I will read to you from paragraph 124 of Mr Stewart’s second precognition:

428. “Most conscious of the thickening climate of public hostility, RMJM stood ready to discuss sensible fee capping as early as 2002. As has become increasingly obvious from publicly available information, this conciliatory approach was not one necessarily shared by EMBT, our joint venture partner: but our very readiness to recognise the impact of public hostility to rising costs was seized upon by certain sections of the media as being evidence of guilt; with a guilty verdict delivered in a trial by media just as the present Inquiry was setting forth the terms upon which it would address the key issues.”

429. So there are two aspects there; he stood ready to discuss this in March 2002. Is that, in your understanding, factually correct or not?

430. Mr Grice: Yes. On the date I could not say. I could certainly say that in May 2002, when we reported to the Corporate Body, we were able to report to them in the knowledge that he was willing to discuss; that is true.

431. Mr Campbell QC: And the same was true, was it not, of Ove Arup, who capped their fees?

432. Mr Grice: I think by May 2002 we had achieved agreement to a cap with them. Whether it was Brian’s initiative or ours I could not honestly say, but I was certainly clear at that stage that there was the basis for beginning to discuss a fee cap.

433. Mr Ian Leitch (Solicitor for the Scottish Parliamentary Corporate Body): If I may be of assistance, my Lord, Paul Curran in his evidence dealt with this at paragraph 39 of his precognition, and with Ove Arup at paragraph 37 of his precognition.

434. Mr Campbell QC: Thank you very much. I am much obliged.

435. Mr Grice: I should say at that point that Paul Curran has been our lead Project Manager on fee negotiations right the way through.

436. Mr Campbell QC: The second point arising from that paragraph is perhaps more difficult to pin down, but at least in Mr Stewart’s perception and mind, the raising of the question of fee-capping was, in the public mind, inextricably linked with the continually reported increases in costs, and the finger was pointed at Mr Stewart’s firm, although the joint venture architect has been largely responsible for that. Is that a fair characterisation, do you think?

437. Mr Grice: I do not think I am really qualified to comment on that. As I well know, the media will report it in the way they judge most appropriate, and there is no question that at around the time that they agreed the fee cap, in my judgement they should have been given some credit for that. In reality they were not. But we on the Parliament side were clear that this was to be welcomed in the public interest, and I think that was pretty much the tenor of what the Presiding Officer said.

438. Mr Campbell QC: You would be bound to see it from your own point of view. I can understand that entirely; but do you perhaps recognise that Mr Stewart has some basis for feeling aggrieved, because a suggestion that he at least had made very much earlier was now being linked up inextricably with vastly increased construction costs?

439. Mr Grice: I certainly acknowledge that he is very upset about it, yes.

440. Mr Campbell QC: Perhaps that will do for now.

441. Moving on to think a little bit about programme and the optimism about, or ambitions for, programming. You touch on this in paragraphs 53 and 54 of your precognition. I appreciate that you were removed somewhat from the minutiae of programmes and the movements from one series to another. Are you able to help me with your perception of the robustness of Bovis’s programme predictions?

442. Mr Grice: Simply because it is a matter of fact that programmes 5, 6A, 6B, 7A —

443. Mr Campbell QC: 7B now.

444. Mr Grice: I was not going to say 7B. I was going to say that the other ones had failed to be achieved. So to that extent they have not proved to be accurate, and I suppose you could derive from that they have therefore not been robust either.

445. I am afraid what I am not really able to say — because I think you need a really detailed understanding, and I think you have taken evidence on this from other people — is exactly why they proved not to be accurate. But it is certainly my clear view that they have proved to be wrong in setting not just end dates for the whole thing but elemental dates within that which were subsequently not achieved.

12.30 pm

446. Mr Campbell QC: I was interested in your paragraph 54, where you say:

447. “The key message on programme — ”

448. — this is June 2002 —

449. “ — was that although Bovis was sticking firmly to the view that April/May 2003 was achievable, the judgement of the Progress Group and the Project Team was that it stood at no more than 15% and the prospect of having a building which was fully operational by May 2003 was virtually nil.”

450. We can see now with the benefit of hindsight who was right, but this means, does it, that both the HPG and the Project Team were interrogating and second-guessing Bovis’s own predictions?

451. Mr Grice: They were certainly interrogating and taking a view on them, yes, and I think there has been that interrogation all the way through. It is always very difficult because it is Bovis’s prime responsibility to programme, and I think even the HPG view is derived from project management. The sort of advice you would get from Paul Curran and his team was that they really felt that the Bovis view at that point was overly optimistic, and they felt strongly enough about that that it ought to be reported to the Progress Group who in turn reported it to the Corporate Body.

452. Mr Campbell QC: I appreciate that your room for manoeuvre in an area like this is quite difficult. You cannot simply sack Bovis because they have proved to be inaccurate programmers because of all the management tentacles which are now in place for looking after all these packages of work. Did you have any room for manoeuvre in relation to programme, other than to acknowledge with a weary sigh that the programme was not sustainable and to look to replace it with a better one?

453. Mr Grice: It is a difficult call throughout, and again — back to the nature of construction management —effectively experts were hired in to deal with certain facets of it, and one must always be careful having hired the men not then to hire in a second team to, as you said in the past, second-guess them. I am not sure whether Sarah Davidson covered this or not yesterday, but she took a judgement, I think a little while before this, that the concern about Bovis programming was such that it would be worth getting in a specialist programmer on our side to do a proper — I would not say second-guessing — scrutiny of the Bovis programming approach to see whether there were lessons we could learn. That chap was called Steve Briggs; I do not know whether you have had evidence previously on Mr Briggs.

454. Mr Campbell QC: A lot.

455. Mr Grice: I shall say no more then.

456. So that was the specific action we took, but at the end of the day Bovis have a contractual responsibility to us to put forward programmes. The relevance here, and the reason I put it in, was because the decision-making process flowed from that because, notwithstanding the concerns over whether the Bovis programme was achieved or not, there was a clear decision taken with professional advice that we should stick with the Bovis programme at that time because that kept the pressure and momentum up on site. There was a concern that if the view going out was, “Well, actually there is not really much hope of that”, that that itself would reduce pressure and momentum. There was a very clear understanding on the part of the Corporate Body and the Progress Group as to the likelihood of achieving this. Nonetheless it was felt to be in the interest of the Project to keep that as the stated target at that point in time to maintain that momentum.

457. Mr Campbell QC: That report is at CB/2/514. The SPCB report dated 18 June 2002, paragraph 7:

458. “We are all agreed that it would be a mistake to relax pressure on the team at this juncture by formally extending the construction programme. Nonetheless, we must at least privately recognise that the likelihood of achieving a building which is fully operationally complete by May 2003 is virtually nil.”

459. So that is where that comes from in your precognition.

460. We have not seen any of the work of the Implementation Unit, which is your people who are charged with managing the migration into the new building. Does any part of the conclusion that the chances of achieving a building which is fully operational by May 2003 come from the work of the Implementation Unit which was not shared with the Project Team and Bovis?

461. Mr Grice: This is quite early days for the Implementation Unit and it is certainly true that as we have got closer to actual construction completion that we have got very full engagement between the Implementation Unit and Bovis. It is a lot more complex than the finishing of a building; it is individual elements, when can you put servers in, et cetera. It is very complex. Bovis’s responsibility effectively ends at practical completion and it is our responsibility to take that on.

462. So what I was saying to the Corporate Body, and the reason why we were having an Implementation Unit, is so that we could have our own view taken on exactly what would be involved in the migration. As I say, that is something where there is a very great deal of detailed engagement now with Bovis. At that stage I think you are talking more about how long from the date we get a finished building would it take us to perform all the functions that we think we need to perform. In practice, of course, there is a great deal more overlap than that, and you can see I have actually got people down on site already dealing with implementation issues, even though the building is not finished yet.

463. Mr Campbell QC: I see this report as quite significant in the chronology which we are looking at. Who in fact was the author of it? It is signed by the Holyrood Progress Group, but there does not seem to be an individual signature; yourself, Ms Davidson, the co-operative team?

464. Mr Grice: I certainly would not have the knowledge to write that; it has got too much detail in it. I could not tell you who the author was. It could have been a secretary to the Progress Group. But I think the key point is: it is from the Progress Group. It actually contains their views under their name and I think that is what matters.

465. Mr Campbell QC: Well, it may matter to me to know who is pressing the conclusions on the SPCB?

466. Mr Grice: The HPG is, very clearly.

467. Mr Campbell QC: Clearly, but it may matter who the individual concerned is.

468. Mr Grice: I really do not know.

469. Mr Campbell QC: You do not know if this is an Andrew Wright paper, or guided by him, or written by Dr Gibbons or Sarah Davidson; you do not know?

470. Mr Grice: No idea at all.

471. Mr Campbell QC: We will return to it in due course, I dare say.

472. Could you look at paragraph 56 in your precognition, please, This is about concern on the publication of risk information. Did you have to take decisions about the provision of supplementary reports to the HPG containing risk information that was not shared more widely?

473. Mr Grice: No.

474. Mr Campbell QC: How did Bovis deal with the ultimately inevitable recognition that they had to face up to, that their programme, on a number of occasions, was not sustainable?

475. Mr Grice: They would typically come and explain why. There were different reasons on different occasions but usually it was either that they had not received the information that was necessary, that a contractor had not performed as quickly as they had expected or that they had hit unexpected issues of complexity of scheduling a programme. So it tended to be a range of reasons given. Then they would take stock, if you like, put all the pieces back together again and move forward.

476. One thing which has emerged more clearly in recent times is that a year or two back Bovis were giving their best estimates of how long it would take contractor A to perform a task, whereas my understanding now is that they are saying that these are effectively how the contractors signed up to these things. They are no longer the best estimates of the Bovis programmers; they are coming from the trade package contractors themselves. Bovis would obviously be scrutinised in some detail as to why it had not been right, and then there would be a degree of interrogation as to the new programme and why that one might be right if the previous one was not — in other words, what lessons have been learned by Bovis from the previous programme.

477. Mr Campbell QC: Bovis have told us many times about their experience in managing package contractors and signing people up to dates and programmes which they could meet. Are you able to identify for us any characteristic of this process which has made that apparently so difficult on this occasion?

478. Mr Grice: My perception is that, especially in recent times, the sheer difficulty which the trade package contractors have had in building, and I think it has been the interfaces that have been difficult; the interface between the windows and the cladding, for example, and working in congested areas. The north lightwell is the most — I was going to say celebrated —infamous part. I know you have been on site, so you have an idea of that. I think Bovis have found it difficult to predict that with sufficient accuracy and a lot of it has simply come down to the package contractors not going as quickly as they had hoped to, or contractor A has not been able to get in to work with contractor B in as an efficient way as Bovis had hoped for.

479. Mr Campbell QC: Have you felt, listening to the series of reasons given from occasion to occasion, that they have substance or have you felt that you are listening to excuses rather than reasons?

480. Mr Grice: I cannot really take a view on that at this time. I think it is the sort of thing that I would want to reflect on at the end of the Project.

481. Mr Campbell QC: I am going to press you a little bit. You must have a sense of whether or not Bovis can be seem to have been “overly ambitious”, which is a phrase — not my phrase — that has come from other people.

482. Mr Grice: I would not want to say at this stage whether I think they are being over ambitious or not. Certainly the reasons they gave were substantial, if you like. They were able to explain, “This contractor has been looking at installing 12 windows a week; in fact it turned out to be six windows a week.” They were able to explain it with facts, so it was substance at that stage, but I do not feel really that until the Project is completed that I could take a final view. It is very complex and I would want to go and take a very careful look at exactly why it turned out not to be accurate.

483. Mr Campbell QC: But if we wanted to do some analysis of this problem and set it out in a way for the report or some other reason, we would look first of all at the HPG minutes, would we not, to see what the Construction Managers are saying when they come to see the Client?

484. Mr Grice: I think there is a very detailed record there and I would certainly point you in that direction. Inevitably one would then have to look at the individual packages and how the programme and those packages sit together; it is very complex. Before you could begin to draw any firm conclusions out you would need to do quite a detailed analysis.

485. Mr Campbell QC: You would also have the benefit of Construction Managers’ meetings, which you minuted.

486. Mr Grice: Yes. I think there is an awful lot of information and you would have to drill down right into that before you could come to a view.

487. Mr Campbell QC: Let me ask you some questions about paragraph 62, if I may.

488. “Bomb blast remained a major issue at this time. Specifically, difficulty was being experienced in finalising the design for windows to meet the requirements of the specialists.”

489. By the “specialists”, who do you mean?

490. Mr Grice: I mean security service people and specialists in facade engineering.

491. Mr Campbell QC: And blast engineering?

492. Mr Grice: Yes, people who understand the implications of blast and their impact on buildings.

493. Mr Campbell QC: And when you say:

494. “Judgements had to be taken, ultimately by the Corporate Body — ”

495. — that I find a little surprising —

496. “ — as to whether it was safe to rely on desk analysis or whether actual blast testing should take place.”

497. Was that ultimately a client decision or was it a specialist decision?

498. Mr Grice: I take your point — no, actually. The Corporate Body could have satisfied itself on the basis of desk analysis only, which was available and reported to them. I would have to say to you that my clear advice to them would be that, in the circumstances, it was advisable to have a full test, given the importance of this particular issue — we are talking here about windows. A view was available to them, but as you might imagine, without going into the details, that view had a degree of equivocation in it, “I am giving an assessment and I cannot give you an absolute guarantee. The reality is — unless you go and test some of those elements in the field — ” So the Corporate Body could do that. But in reality, if you are saying, “Did they have a lot of room for manoeuvre?” my view is that the decision they took was inevitable and correct.

499. Mr Campbell QC: The Corporate Body would not have in front of it all the specialist security information, counter-terrorism warnings and whatever other official but secret guidance was available?

500. Mr Grice: We would not have made available all that detail, no. We gave them a précis report, if you like, including a written assessment by the specialist.

501. Mr Campbell QC: So faced with that advice from you, as the gatherer-together of all this information for their benefit, a decision was inevitable, was it not, that the maximum possible precautions should be taken?

502. Mr Grice: As I say, I think that is right, and I have myself a separate responsibility under health and safety, and I would think that in the circumstances that was the best decision.

12.45 pm

503. Mr Campbell QC: You say, somewhat disarmingly if I may say so, at the end of this paragraph:

504. “This caused further programme difficulties.”

505. Actually, it caused quite major programme difficulties, did it not?

506. Mr Grice: Yes, I did not mean to understate those, because it is clear from that —

507. Mr Campbell QC: It is a beautifully short sentence for what was actually quite a big problem.

508. Mr Grice: Indeed it was; I would not want to underplay that. It was very difficult and had the tests not been successful, it would have been far worse, but, in the event, the tests were successful and we were able to proceed.

509. Mr Campbell QC: You make something in paragraph 65 of Mr Stewart’s periodic absence or commitment to other parts of his work. I was quite surprised to read this, given the size of RMJM, the stage the design had now reached and the assumption — perhaps wrong — that within an organisation of that kind there might be a scheme of delegation to enable a project to continue. After all, this is not their only project.

510. Mr Grice: I was instructed, as can be seen from my precognition, by the Corporate Body to pursue this matter. My assumption was that in a substantial organisation like that, the appointment of a suitably senior person, but below Mr Stewart, would have been one way forward. Equally, Mr Stewart himself, and there is no doubt that when Brian Stewart is focusing on a project he makes things happen; he is very effective. The concern by the Corporate Body and the Progress Group was not that he could not do that when he was there but that he was having enforced absences because, as you rightly say, he is the Managing Director for the whole company. I was instructed to discuss the matter with Brian Stewart and to seek a resolution to that; either they nominate somebody who we are happy with or Brian himself is able to give assurances that he can devote the time necessary to it, notwithstanding his other commitments. You will see the correspondence, which was not getting us very far.

511. Mr Campbell QC: But ultimately you did resolve that. You got the undertakings you wanted?

512. Mr Grice: I did. I got Brian in and discussed it with him directly. I got a firm undertaking and, to be fair, over the period immediately following that, Brian did honour the commitments he gave me up until the latter part of last year when, as I think you know, the issue in a sense surfaced again.

513. Mr Campbell QC: Is it your view that it appeared that Mr Stewart’s attention was diverted by this Inquiry and that, as a consequence, he was not sufficiently available on site?

514. Mr Grice: He certainly chose to spend a lot of time here. Many of us have a lot of demands on our time, including quite legitimate demands of this Inquiry, and one just has to get on with that.

515. Lord Fraser: I was a bit surprised by this, because this was not the first time concerns about his full-time attention to the Project had been brought to your attention.

516. Mr Grice: No. As I say, the period in the late autumn was effectively picking up something which had happened —

517. Lord Fraser: I was thinking more in time that there were internal concerns expressed to you, I think as far back as May 2001. It is obviously a recurring theme?

518. Mr Grice: Yes. I could not comment; it is a matter of fact that he spent quite a lot of time in this room and I would have personally preferred him to have been on the site.

519. Mr Campbell QC: No doubt Mr Stewart has an answer to that, and to some extent he has given it to us, but he would no doubt say that in the interests of the organisation for which he has responsibility it was important to be here to hear what people are saying.

520. Mr Grice: I would not want directly to engage in that debate with him in public, but clearly, from the Client point of view, that gave us cause for concern, to the fine extent that the Presiding Officer himself intervened to resolve the matter. So I entirely understand and respect the concerns a managing director will have for his company. But I think we, as the Client, are entitled to take a rather narrower view of our own interests, which we did. I am happy to say — and I think it is important to record — that, following the intervention of the Presiding Officer, we did get a resolution and that Mr Stewart put a lot of energy into the Project, which he continues to do so, and that is definitely to the benefit of the Project.

521. Mr Campbell QC: There are only two or three more things, Mr Grice. For once my timing is not too bad. You deal with Mr Reid’s election as Presiding Officer at paragraph 68. I would like to take you to paragraph 70; the thrust of paragraphs 70 and 71 is that information being provided by DLE came forward as a big surprise.

522. Mr Grice: Yes.

523. Mr Campbell QC: At your level, I take it that means that you really had no advance warning of it?

524. Mr Grice: No, as I think I record here. In late May — I am afraid I could not give you a precise date, but certainly late May — the Project Director told me (a) that there had been a risk and cost review and (b) that it was likely to show a cost increase. Therefore, that was known to me. But I think we were all surprised at the magnitude of the increase, as I say, not least the Presiding Officer.

525. What really added to the surprise was that the actual completion date at that stage appeared not to have shifted. Normally, the experience had been that the programme would shift and then there would be a cost review which would show that that had consequences. But at that point in time, although the position did change subsequently, what really gave rise to the surprise was that the programme was looking at the same finish point.

526. Mr Campbell QC: Were DLE tasked or challenged as to whether this information could have come forward more quickly?

527. Mr Grice: Yes they were. I am sure they were by the Progress Group and I think, from memory, also by the Corporate Body itself.

528. Mr Campbell QC: Could you look at CB/4/230 and tell me if that is the minute of the meeting to which you are referring?

529. Mr Grice: Is this the HPG meeting of 4 June?

530. Mr Campbell QC: Yes. I am looking slightly puzzled because I do not recognise these numbers in the brackets. Is that the meeting that we are talking about?

531. Mr Grice: Yes, I am sure. I was not there, obviously, but yes.

532. Mr Campbell QC: Could you go to the foot of the next page, CB/4/231?

533. “DLE had now produced papers which indicated an additional construction cost of £18•7m. When the various factors were added on to this (fees, VAT, etc) this produced an increase in project cost of around £37m, from £338m (incl landscaping) to £375m, since the previous report to the Finance Committee in February. DLE had produced a paper supporting this figure but further discussion was required for the Project Team to have confidence in their figures. Again, it was commented DLE must or should have been aware for some time of a likely increase in costs due to the revision of the programme but had not reported to the Group any estimate of what this increase might be. Andrew asked if inflation contributed to any degree to the figure. Sarah advised that a revised estimate for inflation was overdue.”

534. So that is the minute of what appears in your precognition?

535. Mr Grice: Yes.

536. Mr Campbell QC: Do you have knowledge of whether or not DLE had been developing that report over the preceding weeks?

537. Mr Grice: I do not have detailed knowledge, I am afraid, but my understanding of the answer they gave was that they could not really revise their previous cost reports until they had updated programme information from Bovis. It was only at the point that they received that that they were able to produce this further cost check.

538. Mr Campbell QC: That would be a reasonable posture for them to take, would it not? You cannot cost it if you do not know when it is going to happen.

539. Mr Grice: Yes, up to a point. There is no doubt that you should; I think it comes down to a judgement. I am speaking a little bit almost on behalf of the HPG but I guess myself as well. You have to take a judgement as to whether professionals working on the Project, with an intimate knowledge of the Project, are able to make, if you like, an educated guess running ahead of that. There is no doubt, you are absolutely right, that fundamentally you take the Bovis programme and you say, “What will it cost to build up?” I accept that. Ultimately the Client wants robust data and we must be careful not to push people towards making too many guesses. But I remember myself that this was a major cost jump when the programme did not appear to have extended out at the far end, and one was bound to say, “Well, could you not have given us any indication that this was coming?”

540. Mr Campbell QC: It may call into question the extent to which DLE and Bovis were properly liaising in the weeks leading up to this?

541. Mr Grice: It could. I could not comment on that, one way or the other, because I simply do not know, but that would obviously be a question that you might ask.

542. Mr Campbell QC: You mean the Inquiry might ask?

543. Mr Grice: One might ask.

544. Mr Campbell QC: That is sufficiently impersonal; I shall leave it there. You were at this meeting, were you?

545. Mr Grice: No.

546. Mr Campbell QC: In getting his hands on the Project, Mr Reid interviewed the lead principals from each of the consultant firms, as we can see at paragraph 73. I think I am taking it from your paragraph 73 that this was more than just a getting-to-know-you meeting, a meeting at which firm declarations of understanding and commitments were sought by Mr Reid.

547. Mr Grice: Yes, it was certainly more than getting to know you. Obviously, the background was difficult, with the further cost projections, and the Corporate Body, under Mr Reid’s convenership, decided that they wanted the consultants to be given an opportunity, one at a time, to give their account of events, if you like, how we had got to where we were, and critically, and always in Mr Reid’s mind, I think, is, “How do we take it forward from here?”

548. Mr Campbell QC: Was this meeting minuted?

549. Mr Grice: Yes, I think this meeting was minuted in some detail. To be clear, this was actually a Corporate Body meeting; it was not just George Reid interviewing.

550. Mr Campbell QC: Ah, that is perhaps why I had not understood that.

551. Mr Grice: I think, although I would honestly have to check for you the detail, certainly the Presiding Officer has had bilaterals with the lead consultants as well, but I am referring here to an actual Corporate Body meeting.

552. Mr Campbell QC: And was this a meeting principally directed at fee-capping or at a more wide-ranging appraisal of the Project?

553. Mr Grice: A clear objective in the Presiding Officer’s mind was to achieve a commitment to resolving the fee-cap issue; but no, it went much wider than that. It was basically an opportunity; this is really the first meeting of the new Corporate Body, albeit that much of the membership was the same, and it was a meeting to take stock, to have an opportunity for detailed discussion and to question the lead consultants so that the Corporate Body can form a view as to the state of the Project and how we get it from there to completion.

554. Mr Campbell QC: Did anything come out of that which led you to think that there was anything you could do except let the Project take its course and keep the stick on the back of everybody involved?

555. Mr Grice: No. I think that is a fair description — keep the pressure on people, keep driving it forward.

556. The specific outcome was an agreement to cap fees on a lump-sum basis and that did produce a saving to the public purse, which was obviously a desirable outcome against that background. But no, you are right, at that stage and at that point in the Project, all the advice is to finish it as quickly as possible.

1.00 pm

557. Mr Campbell QC: That was coming from DLE?

558. Mr Grice: That was coming from DLE, Bovis and, to be fair, from the architects as well. The whole thrust was, therefore, “How do we achieve that?” The Presiding Officer starts by asking, “What are the barriers? What is going to stop us getting there?” So you can see that the mindset is not about gazing around, if you like. It is actually about, “We have to get there. What is going to stop us? Let us anticipate those and deal with them.”

559. Mr Campbell QC: I am sure that Mr Reid also had a learning curve to climb, having come into this relatively late. What instruments are available to you, him or both of you to keep the pressure on?

560. Mr Grice: It is always important to retain this, to keep working through the project management structure, to constantly try and anticipate any problems which are going to slow you up, to understand that delays of a day or so here and there actually have a capacity on this project to snowball. That is something I have certainly observed. It might not look important, so it is that good intelligence, getting project management very much empowered to work with people to take quick decisions so that whether it is the famous Zen garden or anything else, that issues like this, which are bound to come up, are resolved quickly and not allowed to get in the way of other packages. So that is what we could do. That was not fundamentally different from what we were doing in the past, but I think doing that more effectively, with a greater drive and determination, was really what we have been trying to achieve since that point on.

561. Mr Campbell QC: One might say as a client that one had the right to expect all that from day one. Would you agree?

562. Mr Grice: Yes.

563. Mr Campbell QC: What you are describing to me are nothing more than very short synopses of the contractual terms which each of these consultants and trade package contractors are under.

564. Mr Grice: We are not asking for anything that is not in people’s contracts. It is pulling it all together and making sure it all happens. The key thing — and I realise that you are seeing Mr Reid tomorrow and he can speak more eloquently for himself, I am sure — is about how quickly you resolve those issues: the difference between doing it in a day and it taking a week. There is no doubt in my mind that all concerned have always looked to resolve those issues as I have described. It is simply the speed with which they happen and a very strong view that everything must be done to allow decisions to be made quickly, because it is that process of the speed of decision-making.

565. That partly takes us back to Brian Stewart needing to be around. Although there are not major design issues, there is a person who can actually say, “Right, OK, we won’t spend another week arguing about this. We’ll go for that.” That is what we have been trying to get in this final phase.

566. Mr Campbell QC: It could take me back to our discussion of whether you really need a board of management or whether a single person might have been better, but I will not go there again.

567. Would you like to turn to paragraph 83 of your precognition, please? I would like to give you the opportunity to read these concluding paragraphs, if you would?

568. Mr Grice: I am very grateful for that.

569. “I should like to conclude this statement with two points. First, George Reid said to me back in 2000 that the construction of Holyrood was about far more than just a building. He said it was a political project. He was right. As the Inquiry reaches its conclusions in terms of lessons to be learned, I hope it will bear in mind the unique circumstances of operating within a highly political environment. It is not simply that the Client is a Parliament which is unusual enough in itself but also a brand new Parliament with all that that brings. The perfectly legitimate political concerns raised at the outset of the Project, at hand-over and since and the media scrutiny which has followed from that have placed enormous stress on all those concerned. It has been a demanding and difficult environment for officials. In that context, I wish to place on record my appreciation of the Holyrood Project Team, in particular the current Team led by Sarah Davidson but also their predecessors since the Parliament took responsibility for the Project. It is a testimony to their commitment to the Parliament that they have stuck it out when any one of them could easily have returned to their host organisations.

570. The second point is to note simply that whether or not it is ultimately judged to have been the right building in the right place at the right time constructed in the right way, the Parliament will have an outstanding facility which will enable it better to fulfil its constitutional role, in particular, in engaging with the people of Scotland and contributing to good governance of this country. Given all that has happened in the construction of the building, there will be a tremendous responsibility now to make sure that good use is made of it.”

571. Mr Campbell QC: I am much obliged. Thank you.

572. Lord Fraser: Thank you very much, Mr Grice. I am most grateful to you for not only this appearance but the previous ones that you have made before us. Thank you for your full precognition, some of which you obviously have not spoken to directly in detail, but we will be scrutinising it carefully, together with attendant documents. Thank you very much.

573. We will now adjourn until 2.00 pm.

Hearing adjourned at 1.05 pm.