HOLYROOD INQUIRY TRANSCRIPT
Wednesday 10 March 2004 (Afternoon Session)

Rt Hon the Lord Fraser of Carmyllie QC reconvened the hearing at 2.04 pm.

1. Mr Campbell QC (Counsel for the Inquiry): Sir, good afternoon. This afternoon we are joined by Ms Margo MacDonald, who needs no introduction from me. Thank you for coming, Ms MacDonald, and for providing the Inquiry with a precognition. I am most grateful. I think since you submitted it — on time, if I may say so — you have had occasion to think further about the way in which it is laid out and you want to change the emphasis of it slightly. Is that right?

2. Margo MacDonald MSP: Thank you for asking me, firstly, and secondly, I think that the evidence given to the Inquiry over the past week, in particular, since I submitted my written paper (MS/20/001 – 008), has gone over the same ground as I might have; so I do not want waste the Inquiry’s time.

3. Can I introduce Peter Warren, my office assistant? He is accompanying me and, since I am shaking like a leaf, he will go and get the paper out if need be.

4. Can I start by saying that if the First Minister had not responded positively to the request for a public inquiry that I made in April of last year, I would not have been able to put my suspicions, observations and allegations regarding the Holyrood Project into the public arena for judgement by Scots themselves. Frankly, that is why I am here.

5. I am therefore very grateful to the Inquiry for having done a proper job, so far, of probing the determining elements and the personnel of the Project so that Lord Fraser’s report can provide explanations for what most people regard as an example of crass ineptitude on the part of their elected representatives in the Scottish Parliament. I do not take the slightest iota of pleasure in saying that, and I would like this Inquiry to be able to start putting right that impression of us that many people have.

6. To save the Inquiry’s time, since much of the material included in my written submission has already been addressed during the evidence given in the past week, with the agreement of the Inquiry I would like to focus my evidence on Parliament’s having been misled; the quality of professional advice given by senior civil servants; the effects of Señor Miralles’s death; the ineptitude of the Scottish Parliamentary Corporate Body [SPCB] in dealing with those; the Holyrood Progress Group’s [HPG] confusion and naivety; and the unmitigated mistake in Paul Grice’s appointment of Sarah Davidson.

7. Mr Campbell QC: Thank you. Let us look at your precognition now, if we may, and pick up those themes. Before we do so, you have taken a little time to think about the size of the site at Holyrood. Rather than take you through the precise words you have used, you have a general concern I know about the size of the site and its ability ever to accommodate a Parliament complex.

8. Margo MacDonald: I have to say from the outset, because I have been accused of favouring one site over another, I did not, in fact. Although the more I got to realise, the more I got to believe that the last site that should ever have been chosen was the one at the foot of Holyrood Road, because the only way in which it might have proved suitable would there to have been a very, very simple straightforward building. Perhaps that might have fitted on to the site, but I am most impressed by the fact that Keith Geddes, when he was the leader of City of Edinburgh Council and approached for his opinion on whether the site was suitable or not, was advised by his planning officials that it was not; that it was very constricted.

9. I also recall somewhere in the earlier evidence that John Gibbons was invited to investigate the strip of land that Teague Homes at that point had purchased but had not yet built on, and to which I referred during the first parliamentary debate.

10. Mr Campbell QC: That is the strip of land to the immediately west?

11. Margo MacDonald: Yes. It would have meant that you would not have sat in your MSPs’ office block and looked into the woman next door’s bathroom had there been just a bit more elbow room on the site. I suggested to some of my new colleagues who had come from local government that it might have been a reasonable precaution to have some elbow room left, because in that part of the town they would hardly have lost financially if they had had a spare bit of land at the end that they wanted to dispose of.

12. Mr Campbell QC: Could I just ask you to look at one of these paragraphs — 2.5? You talk about the inflexibility of the site as:

13. “a more credible reason than those already suggested to the Inquiry as Enric Miralles’s reason for ignoring”

14. what you call

15. “the only firm client instruction on the design”.

16. To be absolutely fair, Ms MacDonald, the Building User Brief spread over three volumes, and it contained a number of quite firm instructions, did it not, about other parts of the complex?

17. Margo MacDonald: I think what I am referring to there was the very outset when the competition stage was being gone through and when there was a considerable dialogue between Señor Miralles and some members of the judging panel and the late First Minister himself. Everyone did seem to agree that the horseshoe-shaped Chamber was what there had to be: that was the very centre; it was the symbolic heart of the sort of Parliament we would have. So I think Señor Miralles was well aware of that, and frankly I did not buy the nonsense of him thinking that we had to have the same as they have in continental Europe — a theatre-style arrangement.

18. Mr Campbell QC: If you are right about that, have you been able to discover from your own investigations or enquiries why it is that when the design for the Debating Chamber first emerged from Barcelona that it was not in a horseshoe shape but it was in a theatre style — a much flatter design?

19. Margo MacDonald: I think the first design was not just as flat as it eventually became. Was that not the second transmogrification of the design? But I still maintain that Señor Miralles was aware of this wish on the part of the Client, and he had seen the Chamber that we were operating in right at the start; he was well aware of it. It just does not ring true to me anyway, and I think it may well be that the shape that he eventually came up with fitted the site better. Now I cannot prove that; it just seems to me to be a bit closer to reality than what we heard.

20. Mr Campbell QC: So you are saying that the horseshoe that we have now fitted the site better?

21. Margo MacDonald: No, it did not; that was the thing.

22. Mr Campbell QC: Or did not fit the site better?

23. Margo MacDonald: It did not fit the site even then because the original very pretty balsa wood model which Señor Miralles produced, which I think enchanted most people, incorporated an indication of a third — a quarter to a third — of the density of building that would be required, even at that early stage. Therefore it seems to me that he had to find room in that site; and a longer, finger-shaped building, mirroring the other ones, just took up less room.

24. Mr Campbell QC: But it was clear, was it not, in the Building User Brief, that a horseshoe was required from the beginning?

25. Margo MacDonald: Yes. I do not think there is any dubiety about that; everybody knew it had to be horseshoe shaped.

26. Mr Campbell QC: Are you recalling from the time of the competition that this was a given as far as Scottish parliamentarians were concerned?

27. Margo MacDonald: Yes. The people who did the groundwork in preparation for the Parliament, they were all agreed that this would create the sort of ambiance that we wanted for the Scottish Parliament. They wanted to maintain, I think, the best aspects of the confrontation — the confrontation of ideologies and ideas that you find in Westminster — with the ability for the Parliament to come together, either for a consensus or an agreement, when that was called for.

28. Mr Campbell QC: Could I take you to parts 3, 4 and 5 of your precognition? You make some general points here about the contract, and you recognise, I think, that whatever else we had here we had an inexperienced client? Is that fair?

29. Margo MacDonald: I think, unfortunately, it is abundantly fair.

30. Mr Campbell QC: Perhaps you would read paragraph 3.2. You ask a series of questions here.

31. Margo MacDonald: Yes. Well, we did have an inexperienced client, and we should not explain about that, because they were at great pains to tell us when we came here to give evidence that they are not construction engineers. No, they are not, but on the other hand they are charged with looking after public money. So if you are not a construction engineer, you get hold of somebody who knows a construction engineer and architects and all the rest of it. That is why, presumably, we have people like Dr John Gibbons employed in the Scottish Office as well as in the Scottish Executive as now is.

32. What was the quality of advice — what was the nature of the advice — that he was giving to this inexperienced client? I think he had a duty of responsibility to make sure that the Client did not stay as wet behind the ears as he was when he started.

33. Mr Campbell QC: And these are questions you would have liked him to ask, are they?

34. Margo MacDonald: Well, yes. I do not know whether he asked Señor Miralles whether or not he had experience of this style of contract or not; I seem to remember evidence to the Inquiry that Señor Miralles did not have. Just in passing, I wonder if I might say that it would have been a good idea to employ an interpreter because quite a lot of the technical differences that were experienced between Barcelona and Edinburgh may well have been compounded by language difficulties sometimes. But that is just in passing.

35. Did Dr John Gibbons recommend that construction management should be the style of contract? I think I recall Dr Gibbons saying that although he personally was not experienced in using it, because it was a new method of building, it was obvious that he was perhaps a bit excited by the possibilities of this style of contract.

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36. He probably made the wrong judgement in judging that the combination of the inexperienced client and the inexperienced architect in operating this and an unfixed project in terms of design and delivery date because one was dependent on the other. There were too many indeterminates for that construction management style to have been the one selected. I just wonder what advice he gave.

37. Mr Campbell QC: So you are putting these questions into your precognition, are you, as questions that you think the Inquiry should ask or questions you think that Dr Gibbons, or somebody, should have asked at the outset?

38. Margo MacDonald: Well, actually, I did ask them till I was blue in the face and was getting nowhere. That is why we have got an Inquiry. You could find out for us.

39. Mr Campbell QC: We will do our best. Let us think about the Design Team; chapter 4 of the precognition. What are you saying to us here?

40. Margo MacDonald: What I am saying to you is, according to evidence, Enric Miralles was contacted by a dozen or so of the disappointed candidates in the designer competition. He was visited before the final rounds of the judging in Barcelona by John Gibbons and Professor Andy McMillan, a friend and colleague of Enric Miralles.

41. According to Dr Gibbons’s evidence, as I recall, he felt it would have been improper for him to offer any advice to Señor Miralles as to the most appropriate partner for him to seek in Scotland. Remember of course that we already knew right from the start that Enric Miralles’s practice was not big enough to take this on; he would require a partner.

42. I take what John Gibbons says at face value, that he offered no advice. But I wonder if Andy McMillan perhaps offered advice as regards the suitability of RMJM because there does appear to have been a mismatch of operational styles. Once again, what advice did Dr Gibbons give the Client? That was what he was there for; he was there to advise the Client.

43. Mr Campbell QC: Who do you think the Client was in those days?

44. Margo MacDonald: Donald Dewar and the Scottish Office.

45. Mr Campbell QC: Donald Dewar and the Scottish Office; or Donald Dewar or the Scottish Office?

46. Margo MacDonald: Well, I thought they were one and the same thing. No, no; Donald Dewar was the Secretary of State and the Scottish Office was the Department that he was the Minister for.

47. Mr Campbell QC: And what is your sense of who was driving the Project? Who was the Client in the driving seat?

48. Margo MacDonald: I do not know. I think it has been established that Donald had a great interest in driving this Project forward; he wanted it a done deal before the Parliament was set up. While I think that that was a mistake I can see why he did it. I think he was trying to avoid Glasgow/Edinburgh arguments, because there was a body of opinion that would have wanted to see the Parliament outwith Edinburgh, just to spread things around a bit. It would either have been a peripatetic Parliament or it could have been in Glasgow.

49. I think Donald Dewar realised that that was a bit naive; that Edinburgh was the place it should be: the Scottish Office was already here and the Scottish Executive was going to be here. So I have no doubt that he gave leadership, as a Minister does, to his Department. But I think in the Scottish Office as well there were people who were driving the Project.

50. Mr Campbell QC: You make a point in paragraph 4.2 about a meeting in Edinburgh University in December 1998 about which I do not think we have heard before. What meeting was this?

51. Margo MacDonald: There were a series of meetings all over Scotland at that time before the Parliament was up and running; to talk about Parliament and so on. Brian Stewart addressed that meeting and in the course of questioning he admitted that there were difficulties between himself and the Barcelona end — well not himself personally but the Edinburgh end of the company; RMJM’s end and the EMBT end of the company.

52. So there were difficulties even at that stage because, presumably, Brian Stewart shared the same enthusiasm and drive as Donald Dewar and wanted to get a move on, whereas Enric Miralles had gone on holiday for August and shut down.

53. Mr Campbell QC: But, Ms MacDonald, everybody knows that Europeans go on holiday in August.

54. Margo MacDonald: But we are northern nationalists; we do not expect them to do that when there is a Parliament to be built. No, no. I think it was an indication of the different attitudes that each end of the joint venture company brought to this. Alarm bells should have been ringing at that point.

55. Mr Campbell QC: At section 5 you talk about the Client.

56. Margo MacDonald: Yes.

57. Mr Campbell QC: Now, what are the points that you want us to take from this? Do you want to read this section, or do you want to summarise it?

58. Margo MacDonald: I will summarise it. Paragraph 5.1:

59. “The Inquiry has already heard evidence to the effect that for a successful outcome to a construction management project, the client requires to understand, and preferably to be experienced in, this style of building. As the original client, the Scottish Office, and its successor, the SPCB, have revealed in their evidence, both politicians and the officials advising them ignored the fundamental requirement of having a fixed design strategy before implementing the programme of works packages.”

60. Now, I know that part of the theory of construction management that we have heard is that it allows you to progress your programme while you are designing. But I think we heard from the Gardiner & Theobald witness that when you had an inexperienced client that was not such a clever idea. So there is a mismatch of the style of contract and the Client.

61. Mr Campbell QC: Could that have been overcome, given the political priority for a programme that fitted between elections? It is clear from the evidence, is it not, that one of Mr Dewar’s priorities was that he wanted (a) people on site as quickly as possible, and (b) a completion by a given date?

62. Margo MacDonald: I think that is true. I do not think that the combination of the inexperienced Client and the disparate styles of the Design Team and the unfixed nature — the unknown quantity of what the thing was eventually going to be, what size it was going to be — I just do not think they could possibly have come out right in the end. I said as much in the report that I produced in December 2000.

63. Mr Campbell QC: Why did you produce that report at that time?

64. Margo MacDonald: Because I could not believe what was happening. We had had the Spencely Report. It would have been more helpful, perhaps, if John Spencely had put stars round the bit he wanted particular attention paid to. He rather underplayed his recommendation that the design should be frozen; and I am afraid that some MSPs did not completely understand what he was saying.

65. On top of that we had the Auditor General’s report later that year; in September I think it was published. From both reports it was obvious that this was a project with very serious problems. There was design drift; there was progamme drift; there appeared to be very, very confused lines of communication in terms of the Project Team and the parliamentarians. We have now learned that there was an almost circular route which routed everything through Paul Grice. It was no wonder that the lines of communication and welfare management of the Project were confused.

66. I tried to put everything together in a report to say, “Look; this is what the situation is.” Having reread the report in preparation for this Inquiry, what I identified has proved to be true. It was obvious then.

67. Mr Campbell QC: As long ago as December 2000?

68. Margo MacDonald: Yes. I have to say that party politics played a part in it because there were some people who, for their own reasons, did not want to know about the report. And the reasons had absolutely nothing to do with the reality of the project at the foot of Holyrood Road.

69. Mr Campbell QC: But that is inevitable when you have a political client, is it not?

70. Margo MacDonald: Oh, yes; I suppose so.

71. Mr Campbell QC: You grin, but it is a serious question because we have heard much about the virtues — indeed, I have put it in questions myself — of having a construction tsar in charge and a tough man as a Project Manager and so on. I wonder if you would not agree with the proposition that some people have advanced, which is that where you have a client of differing political complexions with different views and different slants on the problem that this type of delay, this type of cost overrun, the very subject matter of the Inquiry is almost inevitable.

72. Margo MacDonald: First of all, you need a client who is properly motivated. They might not have all the skills necessary for the task in hand; and the Client being a politician, you would expect them to be broad-brush merchants anyway. That is why you have amongst your officials experts in a particular field. I have questioned whether or not the politicians were well served by their experts; or whether the experts told the politicians what the politicians wanted to hear — that you could build a Parliament in six weeks and it would be magnificent. Rather, they did not even query that misapprehension on the part of the Client.

73. As well as that you do have to have management of the Project, and it has to be professional management. It has always mystified me as to why someone as sensible as Donald Dewar did not realise that something was wrong when Bill Armstrong flagged up that the Project was not running the way it should have. I do genuinely find that mysterious. I do wonder what advice Donald was given.

74. We have heard evidence from construction people at the Inquiry that they felt that they were second in the pecking order behind the design people; the design people had a direct road into the politicians and so on. They felt that the politicians’ instructions and wishes were conditioned by the needs of the Design Team, perhaps more than they should have been in relation to the construction. We have heard that already; I do not want to go over it.

75. But right from the start, I have always found it strange that Donald Dewar was not alerted to what Bill Armstrong was saying. There seems to be a thread running through the strategy — even till today — where there have been professionals brought in on the construction side and they have not lasted very long. Instead, the person who has replaced them has come from the Civil Service or administrative ranks, and it has not worked.

76. Mr Campbell QC: Look at paragraph 6, would you, in the precognition. You quote at paragraph 6.1 from Mr Mack’s first tranche of evidence. You say:

77. “Bill Armstrong was such a person, but his advice and warnings were ignored. Alan Ezzi came to the position with relevant experience, but lasted only seven months, perhaps because he too tried to manage the costs and completion dates...

78. Barbara Doig is a career civil servant…

79. Sarah Davidson is a career civil servant chosen to be Project Director by Paul Grice after the resignation of Alan Ezzi… He was recruited for his experience in large projects following publication of the Spencely Report, which criticised the then Project Sponsor.”

80. You make a point about the job advertisement. Do you want to read that for me?

81. Margo MacDonald: “The subsequent Project Manager job advertisement stressed, ‘a proven track record of delivering major building projects is essential.’ There were 49 applicants Sarah Davidson was not amongst them.”

82. There was a question-and-answer session — to be quite honest with you, quite a distasteful exercise — held in the Chamber following Sarah Davidson’s appointment by Paul Grice. We were assured as parliamentarians — and remember we are the people who are explaining this to the people in the street who are paying for it, whose Parliament it is, and in whose name this is all supposed to be done — now we were told that she was taken on board because of her communications skills. She was forced to sit at the end of a row, with her head down, writing, and not saying a word.

83. So she never said anything, but we were told that she was a great communicator.

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84. We were also told by Jamie Stone, if I remember, “We have moved away from bricks; we are on to people now.” This is before the design is fixed. This is when the works packages were all in disarray and falling out of schedule and so on. It was obvious that the Holyrood Progress Group had just bought the line from, I suspect, Paul Grice, who had recruited Sarah Davidson a few months previously as the Secretary to the Holyrood Progress Group. And I have no doubt she was good at that job; I have got no reason to assume that she was not. But to then put her in charge of the whole project at a very, very difficult juncture when Spencely had identified the need, when the Auditor General had identified the need, for a professional to manage such a very complex and technical project was astounding.

85. Also, as far as I am concerned, good practice was not followed in terms of recruitment because when Alan Ezzi applied, as I see here, there were 49 applicants. Now let us assume that for some reason Alan Ezzi… there was a good reason for him going — there was an incident before, and if you ask me about that I will tell you later — but let us assume there is a good reason for him going. We were assured at that meeting — the question-and-answer session where Sarah Davidson said nothing — that her inexperience would be compensated by Martin Mustard’s experience. Martin Mustard was the guy who knew how to build the house and so on. We were given this as assurance that we have moved into the communication stage, we have got a PR woman, a very good communicator, to do it, and behind her there is this very knowledgeable construction man.

86. Mr Campbell QC: Construction professional.

87. Margo MacDonald: Yes. Now he had applied for that job when Alan Ezzi applied. I am told he came second. So I think in most companies you would find that when the first successful applicant leaves the job after seven months you revisit the people who had been shortlisted and interviewed and so on. There was none of that ever happened. That was not good practice.

88. Mr Campbell QC: In any event Mr Mustard was there before Mr Ezzi’s appointment, was he not?

89. Margo MacDonald: He was.

90. Mr Campbell QC: He was there during Mr Ezzi’s appointment as we heard this morning, and he was there after Mr Ezzi’s appointment.

91. Margo MacDonald: As I tell you, he was the justification given to us for the choice of Sarah Davidson as the Project Director because of his professional expertise.

92. Mr Campbell QC: Do you know if he had been doing a different job during the time of Mr Ezzi’s appointment and came to do a different job after it?

93. Margo MacDonald: Oh yes. He was moved to, I think it was facilities management. Now whether that was paperclips and pencils I am not quite sure, but it certainly was not the quality of job with the heavy responsibility that he had previously exercised.

94. Mr Campbell QC: Before or after Mr Ezzi’s appointment was he moved?

95. Margo MacDonald: After.

96. Mr Campbell QC: Can I summarise this? Tell me if this is right: you are unhappy with the decision to appoint Sarah Davidson as Project Director, not on personal grounds at all —

97. Margo MacDonald: No, not at all

98. Mr Campbell QC: Principally on the grounds that she was not a construction professional.

99. Margo MacDonald: And that was what was needed.

100. Mr Campbell QC: And you think that was what was needed?

101. Margo MacDonald: Yes, at that stage. I think we have heard that from quite a lot of witnesses to the Inquiry as well.

102. Oh yes, that’s right — I had forgotten; the Holyrood Progress Group said that the other justification for appointing her was that we were into the endgame. I think by this they meant we are nearly there; they had nearly got the thing built.

103. Mr Campbell QC: We can pinpoint this question-and-answer session because it was videoed. I think it was one of the few videos that the Inquiry has.

104. Margo MacDonald: I was coming to that.

105. Lord Fraser: Yes, Ms MacDonald, I have seen a tape of that, which you described as being uncomfortable. That comes through from just observing it.

106. Margo MacDonald: Yes.

107. Mr Campbell QC: Now you move on in this precognition to what you entitle “Significant Events.” You told me, in opening, that you were concerned that Parliament, as you put it, was misled. Is this the section where you deal with what Parliament was told?

108. Margo MacDonald: Yes. We had a debate in June 1999, and I said at the time — I think far too generously — that Parliament was inadvertently misled into believing that the Project was tickety-boo. It was not, even at that stage, and as this Inquiry has teased out, that fact was known to the Scottish Parliamentary Corporate Body.

109. Donald Dewar by that time, it has to be said, was coping with a wide, wide range of tasks. The Parliament had just been set up and he was trying to do everything. He was not a great delegator, I do not think. And so I think the humanity of how people behaved and what was done and what was not done at that time is perhaps understandable. But it was the job of the parliamentarians to look at the evidence and say, “Should we be careful of what we are getting into here?” That was what Donald Gorrie and I tried to do. We simply tried to have a review.

110. Now if I had known then what I know now — that the Parliamentary Corporate Body had just accepted this Project without having any review — I think I would have made more of it, but actually I just assumed that they would have done that. I was rather dissatisfied that they should still think having done a review that we should proceed. I did not realise they had no review; there was no cost plan, there was design drift, there was Project drift — everything was adrift. I did not know that that was all known to them. So we were misled in that debate.

111. Mr Campbell QC: Misled by omission or misled by commission?

112. Margo MacDonald: Well, we were misled by omission in that they did not tell us about things that had not happened. We were misled by commission when the figure that was quoted as being the construction cost — £62 million — was known to them to be false at the very least. It was £89 million.

113. Mr Campbell QC: Can I pick up a question that Lord Fraser has asked one or two other witnesses? You were, forgive me, an ordinary backbencher —

114. Margo MacDonald: Oh, all right. Yes.

115. Mr Campbell QC: — in the first Parliament; that is to say a backbencher without ministerial responsibilities.

116. Margo MacDonald: That is true, yes.

117. Mr Campbell QC: Now, do you feel that you were able to get the information that you needed if you were interested in this subject?

118. Margo MacDonald: No. I asked all sort of questions, and I have no doubt that you have got copies of them. I will not bore the Inquiry with them. But I asked detailed questions, and I was just fobbed off. That was one of the things that began to alert me. If everything had been fine I would have had much better answers — much fuller answers — and I did not get them.

119. Mr Campbell QC: You and Mr Gorrie have been portrayed as a pair of MSPs marching out of step with the rest of the body politic really since that time and right up to now. With the benefit of hindsight and your own considerable experience, is that fair do you think?

120. Margo MacDonald: Well we only lost the first debate by three votes. Once again, I think it was cock-up rather than conspiracy, to be honest with you. I was told afterwards that Donald Dewar had been fairly sanguine about losing that first vote. That did not mean that he had gone off the idea of Holyrood or anything, but he was fairly sanguine. He thought that, OK, we could have a review; it would not have done too much harm and then we would start again, perhaps on a stronger basis.

121. But it was in the first flush of the Parliament, and Whips and party managers were fairly enjoying being Whips and party managers, and so a Whip was put on by the SNP, I think, in the first instance. Now Donald Gorrie and I had wanted a free vote because we were convinced that in a free vote most parliamentarians, just in the door, faced with this huge Project and all the rest of it, faced with constituents who were beginning to say, “How much is it going to cost?”, would have opted for the safer review — just a bit more time to review the thing. But a Whip was put on by the SNP and Labour put a Whip on as well. Of course, it was a free vote — supposed to be, but it was whipped. I think more than anything that was what lost us that debate. There were only three votes in it.

122. So Donald Gorrie and I were not all that much out of step, although as time went on the party political interests I think strengthened at different points in the history of this saga. There has been a tendency on the part of the Labour party to feel that it would be very unfair to blame Donald Dewar for everything, and I think that too. And so they were, perhaps, too protective of Donald Dewar. The SNP as the principal opposition, well, they were compromised because they had Andrew Welsh on the Corporate Body, they had Linda Fabiani on the Progress Group. They were probably very frustrated about the whole thing. The Tories got their act together a bit later, and I think were just oppositionist.

123. So things changed, and Donald Gorrie and I occasionally were reasonable people and then at other times we were absolutely unreasonable depending on how the political waves were lapping round our feet.

124. Mr Campbell QC: Let us look at the second debate, can we, and what you have to say about it? You say:

125. “I thought it necessary to either reaffirm the case of Holyrood by halting construction of the Chamber and tower buildings to allow a matter of weeks to compare and contrast…. or, following a thorough investigation… to walk away from it.

126. That suggestion was defeated by nine votes. Had MSPs known of the unsettled design, the absence of a cost plan and the true state of health of Señor Miralles, the motion to proceed would have been lost.”

127. Were those questions being asked at the time?

128. Margo MacDonald: That debate is actually a black day in our history so far. Lots of questions had been asked prior to the debate. David Steel, as we heard in evidence, had made all sorts of efforts to assure and reassure MSPs that really Donald Gorrie and myself and one or two others — but mainly Donald Gorrie and myself — were kicking up a stink about nothing. But I am absolutely convinced that if the Parliament had been in full possession of the facts at that stage and if they had known, above all else, about the state of Enric Miralles’s health, that vote would not have been to continue with the Project as it was.

129. The misleading information that was given as regards the walk-away price was very, very superficial. There was no attempt made to evaluate what could be had for that site in the open market. If you think about it, what like it was: the archaeological part was over and done with; planning permission had been given for an underground car park — you know, in the centre of Edinburgh — it was a very attractive site; I do not think that they would have been short of a bob or two. In fact, I calculated we would probably have made a small profit. I see recently one or two of the quantity surveyors have said the same thing might be true, because when the vote was taken the building and site above ground I think was only up to the ceiling level of the MSPs block, and so we had a choice. We could either raze it or we could build it and sell it on —

130. Mr Campbell QC: By ceiling level you mean ground level?

131. Margo MacDonald: Yes. There was so little above ground and there was a choice to do what we wanted to had we decided that that site was not proving suitable because it was too congested. But none of these ideas were explored at all. John Spencely did not have the opportunity because he did not have enough time to explore alternatives to the site and so on and so forth, because the thing was snowballing and becoming more and more complex. I think some MSPs were impatient with having to really think it through again when we thought that that was all behind us.

132. But as I say, overshadowing everything — for me anyway — was the state of Enric Miralles’s health. When I hear what people say now and when I think what they said in that debate about how, “The poor man was in top form recently when I had dinner with him only last month”… Now this debate took place in April —

133. Mr Campbell QC: On 5 April?

134. Margo MacDonald: Yes. Last month was March. The man had been diagnosed in February in Barcelona as having an inoperable brain tumour. So some absolutely dreadful things I think were said at that time.

135. I can understand, once again, why the Miralles family wanted to protect their privacy, protect their children. I can understand that. Obviously they were hoping that although the prognosis he had been given in Barcelona was fatal that they would find another way of dealing with his illness in America. All of that all of us can understand. But there was a professional responsibility on the part of that company; there were two parts of the company and I believe it was professionally negligent of them not to have informed the Client that Enric Miralles had a serious condition.

136. Now we have also heard that he was working so hard to bring the design up to pre-Stage D. I ask you: would it be likely that anyone would be able to work as hard as was needed to at that point if they were suffering from an inoperable brain tumour? I think it highly unlikely.

137. But that is the sort of information that MSPs were being given. We were being told in the tearooms, “Ah, well, you see, Margo does not understand construction. Modern construction does not need an architect. It has always been planned that Señor Miralles would bow out round about this stage in the Project.” The fact that he was going to be paid two-thirds of his fee after that stage in the Project seemed to me to contradict that. However, I was only a layperson. But the Parliament was not told that he was as ill as he was. We were not told that the design needed as much completion as it did to get it through Stage D. We know that it would not have got through Stage D as far as the local planning department was concerned had it not been a Government project.

138. Mr Campbell QC: And what about the cost plan which was required for Stage D?

2.45 pm

139. Margo MacDonald: Och, for goodness sake. How pernickety can you get — a cost plan? It was never even mentioned.

140. Mr Campbell QC: You talked about John Spencely and the cleared site, and getting money back for the cleared site. You know that Mr Spencely puts estimates into his report about the possible value of the cleared site. He sketched a number of scenarios. Do you have a view about the figures that he puts on those?

141. Margo MacDonald: He did not have time to investigate them. I would just say that. I am not an expert. All I know is that he did not have time to properly research the market and research the alternatives.

142. Mr Campbell QC: Going back to Señor Miralles for a moment and his illness, did you ask questions about his illness? And were you told these were distasteful and could not be answered?

143. Margo MacDonald: I was indeed. I mean I felt awful. I really did feel awful, because we can all understand what his family would feel like, and we can understand why they wanted to, as I say, guard their own privacy. But when a journalist phoned Enric Miralles’s office she was informed that Enric Miralles was in America and he was on a lecture tour. This appeared as a front page in the ‘Evening News’. So during the course of the debate I drew attention to this, and if you ever see the video of Donald Dewar’s response to my claim that Enric Miralles was in America on a lecture tour you will realise that Donald Dewar was aware of the fact that Enric Miralles was ill. Everything in his body language… He really was quite disgusted that anyone should say this. He did not know that it had been Enric Miralles’s office who had been under instructions from the family to tell journalists that.

144. I do not know exactly what Donald knew of Enric Miralles’s illness or when he knew. David Steel said he was told the evening before the debate. But I do know that on the day before Enric Miralles had his operation in Houston, he sent a fax to Brian Stewart and Mick Duncan, his partners in RMJM. It is a very sad letter — very poignant when you read it now obviously and it was poignant at the time. He hopes that he is going to see them again and all the rest of it. So they knew how seriously ill he was. They sat in the gallery during that debate when the Parliament was misled as to the part that Enric Miralles was currently playing in the production of the design. They knew that he was in hospital in America having undergone an operation to remove the tumour, and they did not say anything.

145. Mr Campbell QC: But they could not, from the public gallery.

146. Margo MacDonald: No, but they could have when I saw them in the Black and White Corridor afterwards have mentioned that they knew on 30 March. They knew days before that debate. There was certainly time for a sensitive handling of a very, very important factor in this Project. And also I think some attention to be paid to the sensitivities of the Miralles family at that time, but they chose not to share that information. Now I think that was professionally negligent.

147. Mr Campbell QC: Can I go to paragraph 9 of your precognition, much of which you have covered already? Could I ask you to read from paragraph 9.2? If we just note in paragraph 9.1 first of all you asked a series of questions about Stage D and the loss of the lead architect.

148. Margo MacDonald:“Also, the original contract terms had been negotiated with a ‘Signature Architect’, Enric Miralles. I was anxious to explore whether the financial terms of the contract could be re-negototiated.”

149. I sent a letter to David Steel detailing questions about the renegotiation because I could not believe that a contract that was as dependent as the one that I had a copy of was on Enric Miralles… I just could not believe that on his death that it would not be reopened because he was central to that contract. The Presiding Officer just accused me of being ghoulish and insensitive and so on. As we have heard here in fact the thing drifted so that the contract was still in operation it would appear 18 months after Enric Miralles had died. Now the public relations team went into overdrive to persuade everyone that his death would have no effect at all — minimal effect. And I think the Inquiry has evidence of its own to that effect as well.

150. Mr Campbell QC: Read paragraph 9.4, please.

151. Margo MacDonald: “Señor Miralles’s death represented a natural hiatus in the Project before there were above ground structures in the east side of the complex, however it appears that at this stage the RMJM designers, possibly in response to the SPCB drive for a completion date as early as possible, were out of step with the Construction Managers. In his evidence to the Inquiry Alan Mack said that in a letter to Martin Mustard, the Project Manager, he raised his concerns regarding the actual finality of Stage D, but was told that the programme (completion time) was the Client’s driver for the Project.”

152. That is what we referred to earlier on. The realities of the building side of it were rather pushed to the side in favour of the dreams of a design.

153. “Mr Mack agreed with John Campbell in giving evidence, that his concerns were of a serious enough nature to have justified a direct approach to the Client at this stage. But questions remain about the role played by the designers who obviously were aware of the slippage in the Design Programme and its effect on the Construction Programme and control of costs.”

154. Now as I say I can understand the humanity of it, but we had a public concern; we had a public responsibility. We should have been able to better manage the two obligations that we had: one to the Miralles family; and the other to our public responsibility.

155. Mr Campbell QC: Thank you. In opening this precognition you said you wanted to talk also about what you described as the HPG’s “confusion and naivety”. Those are your words and not mine. You have not dealt with this in the precognition in terms, but I should give you the opportunity to enlarge on that if you want to take it.

156. Margo MacDonald: I think what became obvious from the evidence that they gave the Inquiry was that they were confused as regards their role. Linda Fabiani was insistent that they were monitors, and yet if you look at the video that Lord Fraser has seen of the question-and-answer sessions, at the very first one held in November, I think it was, of 2000, they were at pains to say that they were going to manage the budget. They saw themselves as managing the Project and managing the budget, and bringing it in. The expression always was: “It is our job to bring it in on time and on date.” And yet by the time they come here they say that they were only monitors. Hewers of wood and carriers of water. I think that they were very confused as to what they were actually meant to be doing in terms of their function. I have already referred to the circular route of line management. No one was quite sure who really ran this project. Was it Paul Grice as the senior Accountable Officer in Parliament, acting on behalf of the Corporate Body, or was it the Progress Group acting on behalf of the Corporate Body?

157. Mr Campbell QC: What do you think?

158. Margo MacDonald: Oh, I haven’t a clue. I am not being funny. I do not know.

159. Mr Campbell QC: I can see that.

160. Margo MacDonald: I do not know. They do not know; if they did not know then I can be excused for not knowing. I think there was a confusion as regards their role. Where you saw it was at the questioning at these question-and-answer sessions. They were asked about the £195 million. Now remember we have really got to stick to the rules on this: Parliament thought it had voted for a ceiling of £195 million — plus all the wee extras that we do not talk about if we are being polite, you know, like road realignments and things, but never mind the extras — £195 million: that was the budget.

161. The Progress Group told us at the first question-and-answer session in the Chamber that it was their job to bring it in in line with the Parliament’s instructions, but before we had reached even the end of that question-and-answer session they were saying that this was only a target, and they were saying that you cannot possibly have a budget that you stick to if you use construction management — that is just the nature of the beast. So I do not think even they managed to get a handle on what construction management was or how it should be managed.

162. They defended Flour City’s appointment. My office had been writing to them saying: “Excuse me, why did you choose this company?” Two £2 shares, a gentleman called Mr Tang from Hong Kong, and another gentleman from Texas. They were the company. And we were told, “No, this is an international company of great repute, great experience and so on.” So I said, “How many folk have they recruited internationally?” “Well, none.” So I could not see where we tapped into this experience and yet they parroted these lines at the question-and-answer session. I do not know who was giving them advice; I do not know where their advice was coming from. I suspect it was coming from the PR side of the operation. I am not absolutely certain on that but I suspect that.

163. They certainly did not share any concerns which they paraded in front of this Inquiry. They did not share those concerns at this time either with their parties or with MSP colleagues because I was in the SNP group at that time. Never once did either Andrew Welsh or Linda Fabiani say, “Oh we should flag up a concern about such and such a thing.” Whether or not they told their party leaders I do not know. So I think they were very confused as to what they were actually meant to be doing.

164. Mr Campbell QC: Do you think the structure that was selected following Spencely’s report — and after all it all comes on the back of one of his recommendations — has been helpful?

165. Margo MacDonald: I think it could have been helpful if there had been greater definition of their task. I am being hard on them but that was because they gave the appearance at the question-and-answer sessions of knowing it all and treating the MSPs who went along to these sessions — which have now of course been discontinued; I think they got a bit hot —

166. Mr Campbell QC: When was the last one?

167. Margo MacDonald: It was February 2003. We do not have this exchange of information now, but I do not think their role was defined properly for them. I do not know whether I am a wee bit to blame for this because I did suggest in a letter to David Steel that he should maybe think about a committee of backbenchers who would just keep themselves well informed. But this was not the sort of committee that I had in mind, because these were party appointees. I thought that they became absorbed into the Project Team much more, rather than standing apart from it and acting as a quasi-Client.

168. Mr Campbell QC: I am sure you could see right away that from the point of view of a construction professional a Group like this is a real pain in the neck because it has to be reported to. Is there a way of keeping control of the construction team and the Design Team without having the many-headed committee Client which they all dread? Are we back to the same question?

3.00 pm

169. Margo MacDonald: Yes. You get yourself a good industry professional and if you want to have people who will act genuinely as monitors of what is happening and who will ask intelligent questions so that they can relay them to the people on whose behalf they are working, then that is fine. But you do need a professional running the show; they should not have been running the show but they seem to think they were.

170. Mr Campbell QC: I have no more questions for Ms MacDonald, Sir. I am very grateful Ms MacDonald, thank you.

171. Lord Fraser: Can I ask you, at the time of the first debate the proposed size of the Parliament — which no MSPs had had any involvement with up to that point — was 18,000 square metres?

172. Margo MacDonald: It started at 16,000 square metres, it crept up to 18,000 square metres and from there it went to 23,000 square metres, then it went to 31,000 square metres, then it went to 33,000 square metres, I think.

173. Lord Fraser: From the time it came into the ownership of the Scottish Parliamentary Corporate Body, to the work that is going on now, it had more or less doubled in size.

174. Margo MacDonald: That does not really surprise me.

175. Lord Fraser: I did not think it would but I just wanted to find out from your examination of what has been added into it — and considering the functions Parliament has to perform and the way it wanted to perform those functions — do you see that there has been any self indulgence in the part of MSPs in expanding it from 18,000 square metres to 33,000 square metres or was it inevitable if they were going to perform the functions as they determined?

176. Margo MacDonald: No, Lord Fraser, as I said right at the beginning there were choices that parliamentarians correctly had to take the responsibility for making. Although I have been very careful not to criticise the aesthetics of this building and all the rest of it, until it can be properly judged, I have been very critical of the process. Part of that process was in taking the decision, in the first instance, to try and evaluate what would be a reasonable amount of money to spend on a Parliament building. I have felt — and certainly people who have written to me and have got in touch with me have felt — that we have spent an unreasonable amount on this building, which was out of proportion with our other expenditure.

177. Kirsty Wark, when she gave evidence said that the choice would be between a shed and a Parliament building to be proud of. Well of course that is nonsense because the Scottish Widows’ building, which is the same footprint, almost exactly, as this Parliament, I think I am correct in saying, cost about £68 million. Add on for extras such as IT et cetera and it still brings it in well, well under £200 million. The same thing might be said for the Standard Life building. Now these are two different styles of building, approximately incorporating the sort of facilities that we will have in the Scottish Parliament. So the real choice that we had to make was in the proportionality of spend I think. Because we got the process wrong and so on we have ended up spending twice what quantity surveyors now tell me the thing is worth. But since we are not going to be borrowing money on it I do not suppose that matters.

178. Lord Fraser: When you were invited to vote in June 1999 — when, the whole Parliament was invited to vote — the site was 23,000 square metres. So the assumption must be that it was assumed at that stage that that was going to be of sufficient size.

179. Margo MacDonald: Yes, but these estimates, I believe, were wrong because — and this is the lack of wisdom really in determining these things before the Parliament was up and running — it was a new body, it was going to be organic and so on and it did grow like topsy, unfortunately, and I think it is continuing to grow, but that is another story. There were many more people than were anticipated even at the initial stages of the design competition, so therefore there was no direct linkage, I think, between the 16,000 square metres that was in the initial Brief. If you want to enter for the competition, design a building of this size, and it was actually for a flat cleared site which was different from what we ended up with as well. I would not necessarily accuse the Parliament of being too grandiose in its desire; I would not necessarily do that because I think it did try to fit functionality, in the light of the experience it had. I do not think that I would accuse the MSPs of that.

180. Lord Fraser: Why I asked you is because I have read the April 2000 debate and it did not appear to me that anyone, as at April 2000, was arguing what was being put on offer in June 1999 was sufficient for your purposes. I think your side of the argument was, “Halt, let us have a look at this again” and the other side was saying, “Accept it as it is now with at 31,000 square metres, with a cap of — as you pointed out in your evidence — £195 million.” I am not conscious of anyone in that debate — and I just want to be corrected by you if I am wrong — nobody was arguing, “No, no, 23,000 square metres, which is what you originally got and were invited to vote on in June 1999, was an adequate space for the Parliament’s requirements.”

181. Margo MacDonald: I think we glossed over that bit, Lord Fraser. I do not think there was too much attention paid to it because it was fairly obvious by that time that the Committees were meeting more frequently and there were more people working in the Parliament. There is a high staff count in our Parliament.

182. Lord Fraser: What I am wondering is, to what extent in the way the vote was invited on the second occasion, was there an implicit assumption that the earlier 23,000 square metres was inadequate for you?

183. Margo MacDonald: I think that is entirely implicit. It was not explicit. As I say we sort of glossed over it; we just understood that that was the nature of the beast.

184. Lord Fraser: I am afraid I think you are right in saying that you do not know what the actual cost of the building was as at handover.

185. Margo MacDonald: That is right. I do not think anybody did — well maybe somebody did, but I do not know the person’s name.

186. Lord Fraser: You have pointed out, as indeed Mr Spencely and the Auditor General, picked up, that prior to that debate the cost consultants had actually said, “It is not going to be £62 million. It is going to be £89 million.”

187. Margo MacDonald: Yes.

188. Lord Fraser: I understand, and correct me if I am wrong, even if you cannot put a figure on it you are not even comfortable with that £89 million as at June 1999?

189. Margo MacDonald: No. I had heard, and forgive me but I cannot think where the reference is just now, but I will search for it and supply you with it if I can get hold of it, that in fact I had heard the figure was higher than that — it was over £100 million.

190. Lord Fraser: I think you are factually correct that the SPCB as at the time of handover, for which there is a statutory order, did not say, “What is it we are taking?”

191. Margo MacDonald: Well, no. I have cited that as incompetence on their part. I believe it was incompetent. But once again the start of a new Parliament and everything was going like a waterfall. That is why you have five permanent officials and they were the same officials that had been in the Scottish Office. Once again I would have expected the role of the senior civil servant to be that of guide and say, “I think you better count how many things are in the box that you are taking”, and they did not. It has been bedevilled by that from the start because there was quite an argument over who was responsible for what.

192. Lord Fraser: I can understand your frustration and your explanation of it, but it is difficult to know who was the Client. I know legally who was, but who was in charge of this Project?

193. Margo MacDonald: Paul Grice I think. Paul Grice is the continuing thread and he certainly, in terms of line management, was senior to even the advisers from the Scottish Office, which became the Scottish Executive. Who was in charge on behalf of the Client? I think Paul Grice.

194. Lord Fraser: Well he was the only person to whom, as I understand it, the Scottish Parliamentary Corporate Body could delegate their responsibility to.

195. Margo MacDonald: Legally, I think so. Yes.

196. Lord Fraser: Looking at the issue of who was the Client — who was giving the instructions, who was calling the shots. What would you do if you were sitting on the other side of the table?

197. Margo MacDonald: Emigrate?

198. Lord Fraser: Every fortnight as I understood it, the designers, the builders, et cetera were brought before the Holyrood Progress Group, then maybe a day or two later got instructions through Paul Grice about what they were to do or not to do.

199. Margo MacDonald: I know I am not being of any great help in this, but then I never understood it either. I had never seen a management structure — we had drawn wee flow charts and things and they all ended up in the same place.

200. Lord Fraser: Was that a problem in the way this contract went forward?

201. Margo MacDonald: It has to be. We know that the design elements had to fit with the construction packages. As we were told in the Inquiry, you had to have men standing around just in case they were needed to do something. That is not a very good way to manage a project, but it was inevitable if you did not have someone who was strategically planning and driving the Project. Now Paul Grice — although theoretically and legally he was the responsible officer — he could not run the Parliament and do that. I am saying no more to you than I have said to him. He should not have been doing both things because I do not believe it was possible to do it. I think he made some bad judgement calls, one of them being to replace an industry professional, Alan Ezzi, with an administrator — no matter how ace — in Sarah Davidson, because the thing has doubled in price and has drifted and drifted in terms of completion date, during her watch. You cannot ignore that.

202. Lord Fraser: I think I should make it clear, while I have seen a tape of the first uncomfortable Holyrood Progress Group question and answer session when, as you correctly observed, Sarah Davidson is at the end of a row with her head down scribbling furiously and doing not much else. I believe we have tapes of the other question and answer sessions, which I have not yet seen.

203. Margo MacDonald: They are quite interesting in parts because you do see the confusion on the part of the Holyrood Progress Group and you can see where the information that they are sharing or keeping from MSPs, that it has originated inside the laager, because they did feel themselves under attack.

204. Mr Campbell QC: There are other videos, for your information and I am sorry to say you will have to watch them at some point.

205. Lord Fraser: I am sorry to keep you Ms MacDonald. Finally, we have heard in this Inquiry — and I think you may have heard too— that at the outset, once the Scottish Parliamentary Corporate Body had taken over, they kept very full minutes and then you, as a backbench MSP, were provided with a brief summary. Now one can understand why minutes might be redacted to remove commercially confidential information but did that constricted form of minuting being made available to you limit your ability to ask the questions you wanted?

206. Margo MacDonald: I am suspicious as to why there were two lots of minutes because I only learned there were two lots of minutes when I came to this Inquiry. So therefore I do not think that there were two lots of minutes produced in order to help my limited reading ability. I think it might have been to make sure that it was presented to me in a way that would cause the least possible trouble if I queried anything. I am not making light of it. I think it is an absolutely disgraceful practice. I believe it to be an illegal practice as well, and I am glad they have stopped it. I do not think they did it to help MSPs understand what was going on; I think they did it to make sure MSPs did not understand what was going on.

3.15 pm

207. One thing you did say Lord Fraser, yesterday, was that it might help — and I certainly believe that it has the possibility of shortening or curtailing the amount of original research that you have to do — if you had access to the tapes. You suggested that MSPs had a collective responsibility to make sure that you had access.

208. You didn’t? You do not want to see the tapes — the BBC tapes?

209. Lord Fraser: Oh yes I do.

210. Margo MacDonald: I put the motion down today that I put down on the 31 October, and I put it back down again. This time I am so cheered by Fergus Ewing’s support for the idea yesterday because he did not sign it last time. I imagine that he and all the others will sign it this time.

211. Lord Fraser: I would be grateful. I think you will understand that at the outset I said I wanted to leave no stone unturned and that remains my concern. Although like Fergus Ewing yesterday I do not know whether there is anything of any particular worth in what is being kept from me.

212. Margo MacDonald: I think it is a possibility that some of the questions that cannot now be answered as to motivation and reasons for early decisions — you referred yourself to the creep in the size. Well the architect is not here and even though we were told that it made no difference if he died and that people understood his concept so well, there have been well over 1,000 design changes, so we know that that was rubbish. It would have been good to hear from him himself. If the video, which BBC Scotland showed the other night which was done in, I think, November 2000, and when you see now what David Steel was saying then — he was saying that everything was tickety-boo and he had been to Barcelona and he was absolutely intrigued at how closely the two ends of the partnerships worked together — when we know what we know now, I think it might be quite handy to see the BBC tapes.

213. Lord Fraser: Thank you very much indeed Ms MacDonald. I am most grateful to you.

214. Mr Campbell QC: Yes, Ms MacDonald, I am most grateful to you for coming. Thank you.

215. Margo MacDonald: Thank you

216. Mr Campbell QC: Sir, can I invite you to adjourn? Tomorrow we hear from Mr Brian Stewart who is to be with us for the whole day.

Hearing adjourned at 3.17 pm.