HOLYROOD INQUIRY TRANSCRIPT

 

Wednesday 12 November 2003 (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.  Unless there are any preliminary matters, the person with us today is Mr Ian Wall, Chief Executive of Economic Development and Investment Group.

 

2.      Mr Wall, good morning and thank you very much for coming to the Inquiry.  Can you confirm that you are Ian James Wall, that you are a fellow of the Royal Institution of Chartered Surveyors, and now Chief Executive of the EDI Group?

 

3.      Mr Ian Wall: That is correct.

 

4.      Mr Campbell QC:  Can you tell us first something about the EDI Group; what is it; who owns it and what are its functions?

 

5.      Mr Wall:  It is a property development and investment group registered under the Business Acts and all the rest of it; a private company, but all its shares are wholly owned by City of Edinburgh Council.

 

6.      Mr Campbell QC:  Thank you.  Would you mind keeping your voice up a little bit?  Casting your mind back to May 1997, what was your position within EDI at that time?

 

7.      Mr Wall:  I was the Head of Property and Development.

 

8.      Mr Campbell QC:  And what did that mean in practical terms?

 

9.      Mr Wall:  I was the Senior Chartered Surveyor in the firm.  I had a couple of chartered surveyor colleagues, and we were carrying out a variety of developments at that stage; industrial, offices and residential, if memory serves me correctly.

 

10.  Mr Campbell QC:  And aside from its ownership by the local authority, was the company structured conventionally, with a Chairman, a Chief Executive and a board?

 

11.  Mr Wall:  Correct.  The then Chief Executive was Duncan Sutherland, and the Chair of the Directors was Councillor Donald Anderson.

 

12.  Mr Campbell QC:  Thank you.  You have kindly responded to an invitation to give evidence to this Inquiry.  In so doing, have you had recourse to EDI’s records of the events around 1997 and 1998?

 

13.  Mr Wall:  I have done.  I have read them.

 

14.  Mr Campbell QC:  You would be aware then, of course, of the General Election result of May 1997, the White Paper which followed it, and the decision to not proceed with the Royal High School by itself as a prospective site for the Parliament building, taken around July 1997.  What did EDI do when that decision became apparent?

 

15.  Mr Wall:  We put together some proposals for an approach — or two approaches — to development on Calton Hill.  What we loosely call Calton Hill of course is St Andrew’s House, Regent Road, the Royal High School — that area.

 

16.  Mr Campbell QC:  Yes.  Why did you do that, Mr Wall?  Why did EDI do that?

 

17.  Mr Wall:  Because we felt that this was the best location in — I suppose, in the loosest sense — urban planning terms; that a Parliament should be in the centre of a capital, it should be in an elevated position.  The particular site, we thought, had some additional benefits in regenerative terms for the east city centre of Edinburgh.  I have to be careful with my language here, but there are issues, for instance, that St Andrew’s House was owned by the Government already, the Royal High School was owned by the City Council, the road was owned by the City Council — these things obviously make for ease and speed of development.

 

18.  Mr Campbell QC:  Yes.  In moving forward to look at this as a prospective development, were you encouraged by the City Council, or by the Scottish Office, or both?

 

19.  Mr Wall: By neither.

 

20.  Mr Campbell QC:  By neither, so this was a self-motivated step, was it?

 

21.  Mr Wall:  Yes.

 

22.  Mr Campbell QC:  Hoping to achieve what?

 

23.  Mr Wall:  The erection of a Parliament on or about Calton Hill.

 

24.  Mr Campbell QC:  Right.  Did you put together a professional team or did you use your own in-house people?

 

25.  Mr Wall:  We drew together a professional team.

 

26.  Mr Campbell QC:  At your own expense?

 

27.  Mr Wall: Correct.

 

28.  Mr Campbell QC:  Yes.  And did that consist of the usual members of a building team, including engineers?

 

29.  Mr Wall:  Architects, engineers, quantity surveyors, landscape architects, project managers and construction advisers.  At a later stage, we added a security adviser, in view of the questions that we had got in discussions with the Scottish Office.

 

30.  Mr Campbell QC:  Right.  And how soon was it before you entered discussions with the Scottish Office?

 

31.  Mr Wall:  Our first meeting with the Scottish Office was on 21 July 1997.  That was a meeting Duncan Sutherland had; I was not present myself.

 

32.  Mr Campbell QC:  And did you subsequently have meetings with Historic Scotland in September and with the Scottish Office again in October?

 

33.  Mr Wall:  We did.

 

34.  Mr Campbell QC:  Were you in any way discouraged or inhibited from going ahead with your ideas for Calton Hill?

 

35.  Mr Wall:  Not at all.

 

36.  Mr Campbell QC:  Can you summarise for the Inquiry what the general nature of your ideas was in starting out to look at this as a project?

 

37.  Mr Wall:  We made two proposals.  One was to take the existing St Andrew’s House and to create a new Debating Chamber between the wings that point, roughly speaking, to the south of the building, together with refurbishing the building.  And the alternative was to propose that a completely new parliamentary chamber be built between St Andrew’s House and the Royal High School.  Common to both projects was the concept that you created, first of all, a new formal square at the junction of North Bridge, Princes Street, Leith Street and Waterloo Place in front of Register House, the old GPO, and so on.  Then, transform Waterloo Place into a grander boulevard — it is already grand, but to give it some discipline and order.  And then culminating in a new civic square — or national square — in front of St Andrew’s House and the new Parliament building so as to create a place for national celebration — Olympic gold medallists coming back, or, more appropriate today, an Armistice parade, or something like that.

 

38.  Mr Campbell QC:  We will look at it in a minute, but clearly that would have major traffic implications for the city of Edinburgh.

 

39.  Mr Wall:  We did not believe it had major traffic implications; we had traffic consultants — Colin Buchanan and Partners — they produced a preliminary traffic impact assessment.  There are issues raised, but in terms of Regent Road — this is in respect of the building of a new debating chamber and ancillary material on Regent Road — you do not have to close Regent Road.

 

40.  Our proposals to the Scottish Office were that the road should remain open to buses because part of the broad brief for a Parliament was that it should be accessible.  We took that to mean that in a wide range of ways, not just the ability to walk in through the door.  And therefore, keeping a public bus system running through the square, and carrying on down Regent Road seemed to us a good idea.  At the same time, the dignity of Parliament suggested you did not just want normal everyday traffic pottering up and down.

 

41.  But these are essentially, from EDI’s point of view, questions for the client to determine.  If they did want the traffic moving up and down, and I have seen such things — in fact, that is what happens in London — then that would be achievable as well.

 

42.  Mr Campbell QC:  Yes.  You mentioned in that answer a brief.  What was the nature of the brief you were able to obtain from the Scottish Office?

 

43.  Mr Wall:  When we started the project, first of all we just read through the White Paper, and if you go through with a felt-tip pen, picking out the things, then you get a broad idea; none of it comes as a great surprise, but nevertheless it reflects the thoughts of the client at the time.  Then Duncan Sutherland, our then Chief Executive, had a meeting with the Scottish Office.  Beginning to create a definition in terms of the size of the Debating Chamber, number of MSPs, number of officers that would be required and things like that.

 

44.  At that stage, I believe it was 120,000 square feet, plus the Debating Chamber.  At further meetings, it increased to 150,000 square feet, plus the Debating Chamber.  Clarity came about car parking; at one stage there was going to have to be additional car parking, but in respect of St Andrew’s House, it was not required because they considered there was sufficient car parking there already.  Matters like that developed as we continued discussions.  Clearly, the consultations with Historic Scotland were useful in determining what might or might not be achievable in respect of St Andrew’s House and so on.

 

45.  Mr Campbell QC:  So how long did the process take for you to work up an indicative scheme, before you submitted it to the Scottish Office?

 

46.  Mr Wall:  Well, as I think is true for anybody in this situation, we finished it about the day before we presented it.  You take all the time you have; you do not say: “It’s finished”, and put a red ribbon round it on 15 September or something.  I do recall that our last meeting with the Scottish Office, where we talked about the brief in the broad sense, e.g. not a 50-page document of detail, was not long before we did the final presentation — or what we thought was the final presentation at that stage — to a very large Scottish Office group headed by Donald Dewar and various senior Ministers and officers.

 

47.  Mr Campbell QC:  Can I show you a document called ‘Building User Brief’, which is quite an extensive document, running to dozens of pages?  Did you get that, even in draft form, from the Scottish Office?

 

48.  Mr Wall:  No.

 

49.  Mr Campbell QC:  It seems odd now that here was a private developer — albeit one owned by the host city — working away at proposals for a site which had been, at least in the public mind, the obvious candidate for a Parliament, and yet, from your answers to my questions, it seems that there was really quite minimal interaction between you and the intended client, namely the Scottish Office.  Were you left to get on by yourselves with this?

 

50.  Mr Wall:  I am not sure I would go with the word “minimal”.  The process you describe is not uncommon; people put sites up for sale and we put together a team, just in a straight commercial sense.  You try to glean as much information as you can at any one time in a particular circumstance, and you make your bid in the light of that.

 

51.  Things were moving quite quickly; things were not even certain, in a sense, after the election — there was still the referendum and so on.  It is trite to say it, but every journey begins with a first step, and you say, “We want a Parliament, and it is roughly so big, and so on”, and people start to say, “It looks like this”, and then you say, “Well that is interesting, we will refine that and make it a bit smaller or a bit bigger”.  It is a process.  So, although it is always easier to respond the more guidance you get from the client, there is a sort of situation in which you accept the client’s position and do your best to meet the way they want to see the world go.  It is a big mistake to tell the client how they should behave.

 

52.  Mr Campbell QC:  What I am trying to get to is whether or not there was a clear steer from the client as to what they wanted, or simply, at this stage, general indications.

 

53.  Mr Wall:  The impression I received was that they gave us as much information as they had.

 

54.  Mr Campbell QC:  As part of the team you had put together, I think you have told us that you included cost consultants, or cost controllers — in the old days called quantity surveyors, but we live in a new world.  Who were they?

 

55.  Mr Wall:  They were a firm called Gleeds.

 

56.  Mr Campbell QC:  And in pursuit of the objective which you were engaged on, did you carry out work in costing the proposals which ultimately you submitted to the client?

 

57.  Mr Wall:  Gleeds did that on our behalf, yes.

 

58.  Mr Campbell QC:  And how firm do you feel now, looking back on it, were the figures which they came up with?

 

59.  Mr Wall:  Reliably indicative.

 

60.  Mr Campbell QC:  Were you aware of a budget figure being advanced by the Scottish Office?

 

10.15 am

 

61.  Mr Wall:  Well, we were working to the figures inside the White Paper, which was £10 million to £40 million, and so our clear instruction to the design team… I mean it is not the cost controllers, as Gleeds prefer to call themselves, I will probably refer to them as quantity surveyors as you do, sir.  The instruction is not to the quantity surveyors to produce the figure, the instruction is to the whole team, and they work together in order to a number of targets, not just the size or the quality of appearance of the building, but also the cost.  It certainly was clear to us that cost was a key criterion in the Scottish Office.

 

62.  You know, all things being equal, if we had two identical Parliament buildings half a mile apart, if one could have been done for £5 million less than the other then that would have been the winner.  So cost was a very important criterion.  The ultimate significance is the £40 million.  I mean, clearly, if one breached that, on the face of it anyway, one was not even in the running, so our instruction to the team, amongst the other things about quality, timing and so on, was to try to keep the cost under £40 million.

 

63.  Mr Campbell QC:  In your meetings with the Scottish Office, did you test the robustness of the £40 million, which had appeared in the White Paper? By question and answer with the clients?

 

64.  Mr Wall:  I do not think as directly as you would suggest by “testing”.  I mean certainly it was an area for discussion.  There was certainly no indication, as sometimes happens in other situations, that it is an indicative figure and if you came in at £42·5 million but it was a good project then, you know, there is a sort of greyness.  It was I think felt by us that it was a sort of cut-off point.

 

65.  Mr Campbell QC:  And how did your own proposals come when compared with the £40 million target figure?

 

66.  Mr Wall:  Well, as I say, we put in two.  The headline figure for the addition of a chamber to St Andrew’s House was, I think, £36 million, and the headline figure for building a new chamber in Regent Road was £43·5 million, but we offered some additional information, which we thought reduced those on a comparison basis with other locations.

 

67.  Mr Campbell QC:  Can I just understand, did the second option include refurbishment of the Royal High School?

 

68.  Mr Wall:  No.  Although that had been originally part of our proposals, because the original concept we had was St Andrew’s House as the main office for the civil servants and so on; the Parliament Chamber as a brand new building with appropriate ancillary accommodation for a Parliament Chamber; and then St Andrew’s House operating as committee rooms and back-up meeting space for MSPs and for others.  We proposed that it could form a wider national resource.

 

69.  Mr Campbell QC:  What about MSP offices?

 

70.  Mr Wall:  Those would have been in St Andrew’s House.  This comes back to the point you asked earlier about the £40 million, if we included Royal High School as part of our proposals, then it would have pushed us over the budget, so we left it out, although, clearly, the building was there.

 

71.  Lord Fraser:  At one point, Mr Wall, you said that common to both of your proposals was a refurbishment of Waterloo Place.  Do I take it that there was no costing of that reconstruction or refurbishment within either of these figures?

 

72.  Mr Wall:  Those costings were included in those figures, Sir.

 

73.  Lord Fraser:  Can you remember what the cost might have been?

 

74.  Mr Wall:  I think so.  I think that I have the figure here, Sir.  In what we call option A, which was the refurbishment of St Andrew’s House with the Chamber built into it, the Waterloo Place works, Parliament Square and so on were £4 million.  Option B was £5 million.  Option B is the new build, and we took the public works further round behind what would have been the new parliamentary chamber, so they cost more.

 

75.  So within the £36 million, £4 million was included for what one might call works in the public realm, and in the £43·5 million, £5 million was included for work in the public realm.  In presenting these things there is rarely a final figure.  It is a final figure in what circumstances?  If push came to shove, we would have said that even the most expensive option was only £38·5 million, because the public works were much wider than just for Parliament, as they went down Waterloo Place.

 

76.  Mr Campbell QC:  And they would not include, for example, the redevelopment of the old stamp office or the old post office?

 

77.  Mr Wall:  No. None of that was included.

 

78.  Mr Campbell QC:  Could you just look quickly — jumping ahead slightly — at MIS/1/058 please, which will come on the screen?  It is part of the presentation brochure I think, which EDI submitted to the Secretary of State. 

 

79.  Mr Wall:  I have a copy in front of me, thank you.

 

80.  Mr Campbell QC:  We can see in the bottom left a summary of costs.  You set out option A at £32 million, Waterloo Place and Parliament £4 million.  That is the answer that you have just given to Lord Fraser.  Option B, debating chamber outwith St Andrew’s House: £38·5 million, Waterloo Place, Parliament Square and other necessary works: £5 million.  So that was what was presented to the client in due course?

 

81.  Mr Wall:  Yes.

 

82.  Mr Campbell QC:  Was it ever made known to you that a refurbishment of St Andrew’s House was in contemplation and indeed was something that had been sanctioned by the previous Administration?

 

83.  Mr Wall:  That was an issue that we were aware of.  I cannot recall how we became aware of it, but certainly fairly early on, we were.  We had discussions with the Scottish Office about that, and they were kind enough to give us the history of it, because it had been going on for some time.  The proposals had emerged a few years ago — three or four, or something of that order.  Some work of a basic nature was in immediate contemplation, or even commenced, I do not recall. And they intended, all things being equal, to do further work with an estimated budget of some £15 million.  We thought that was a strength of our project, because we understood that the Scottish Office were going to spend that money anyway.  Again, that, in part of our presentation, made our case stronger, because if the money was to be spent anyway, spending it on the Parliament would be much more effective.

 

84.  Mr Campbell QC:  Can we understand that the £15 million was embraced within the target figures that we see in your presentation document?

 

85.  Mr Wall:  The two figures of £36 million and £43·5 million included £15 million for refurbishing St Andrew’s House.  It also included, if memory serves me correctly, an extra £1 million over and above those things, because although it is a listed building of high quality and it has some very nice interiors, we nevertheless felt that we should add another £1 million because there would be a suite of offices for Ministers or very senior people of one sort or another that would be above average.

 

86.  Mr Campbell QC:  Before I ask you about competing sites, Mr Wall, I wonder if you can tell me when you advanced these figures — which I think would be about October 1997 — were your financial estimates examined by the Scottish Office and/or challenged in any way?

 

87.  Mr Wall:  I do not know.  We only gave them headline figures.  I mean we did not provide detailed analyses and things like that.  They were not challenged in either that sense of the word or even in the sense of being discussed in any detail that I recall.  I certainly have no file notes that suggest that.  Whether they took them in-house and passed them to quantity surveyors and said, “Do these look realistic to you?” I do not know.

 

88.  Mr Campbell QC:  You do not know?

 

89.  Mr Wall:  No.

 

90.  Mr Campbell QC:  What I am interested in is whether or not there was a dialogue between the client and, in inverted commas, “competing developers”, before feasibility studies were instructed.  I think that you are saying no.

 

91.  Mr Wall: I do not think there was a dialogue.  We certainly met, but what we were trying to do was elicit as much information as we could in order to provide the best solution to the client’s requirements.

 

92.  Mr Campbell QC: I need to find out from you if you are aware of any systematic consideration and analysis of your headline figures, either to accept them or to suggest that they were too low or too high, or indeed, to reject them.

 

93.  Mr Wall:  I am not aware of any analysis of that sort, Sir.

 

94.  Mr Campbell QC:  OK.  Thank you very much.

 

95.  Now, can I talk to you about the competition as it were?  You would be aware, I suppose, from quite early on that you were competing with sites in Leith and Haymarket?

 

96.  Mr Wall:  Leith, in the first instance; Haymarket emerged later.

 

97.  Mr Campbell QC: What features of Calton Hill were you at pains to emphasise when considering it against Leith?

 

98.  Mr Wall:  Centrality, which encompassed a number of issues, accessibility for people from across Scotland — it is very close to the railway station, the city centre, the Edinburgh bus station and so on — the availability of surrounding facilities that a Parliament either needs or calls forth — additional office space for other occupiers who feel the need to be close by, Hotel rooms for visitors and things like that.  The physical nature of the site we felt was quite strong, because it is on a hill.  We looked at other Parliaments elsewhere.  Parliaments tend to identify with natural features, either on a hill — and one can go back to the Acropolis, although it was not a Parliament — but there is a sense that major civic buildings tend to be on high or, if they are in flat locations then they tend to go by the river or something where they can stand more proudly than just being somewhere.  So we felt that was a great strength and the issue we pointed out that generally there has been a drift in Edinburgh from the East to the West.  That is just continuous and has been relatively steady for some time so that.

 

99.  Mr Campbell QC:  What sort of a drift?

 

100.          Mr Wall:  Essentially of the office quarter, but, of course, as the office quarter drifts other things drift with it. 

 

101.          Mr Campbell QC:  Can we just record, for the purposes of the Inquiry that EDI is largely responsible, perhaps you would say entirely responsible, for the development of Edinburgh Park lying on the western edge of the city?

 

102.          Mr Wall:  That is true.

 

103.          Mr Campbell QC:  Can I just understand, that is a major series of office developments perhaps employing how many people?

 

104.          Mr Wall:  I would estimate 7,000 to 8,000 at present, Sir. 

 

105.          Mr Campbell QC:  And growing?

 

106.          Mr Wall:  Yes, it is only about one third complete.  If I might add, when talking about a drift to the west, I was talking solely about the city centre, not the city as a whole.  I would not deny that that is happening as well, but I was trying to refer to the city centre and things like the Financial Exchange, Fountainbridge and Scottish Widows, I mean twelve years ago there was Saltire Court and so on.  There is a drift that way, and so one of the advantages of Parliament establishing itself in Calton Hill would strengthen that.  At that stage, for instance, there had been an office building beside the GPO Headquarters that had been refurbished and been vacant for five years although a proper, modern refurbishment and so on.  I think we emphasised that.  I mean we did genuinely believe it to be important and useful, but also because we felt we were in competition with Leith, and one of the strengths of the Leith proposals — whatever other strengths they might have had — was that it would help with the continued regeneration of Leith.  When one is in competition, you do not badmouth the opposition; you try to emphasise your own strengths. 

 

107.          If I might add, Sir, the other side of the equation that we drew together was not just to say this would happen, but we talked to a number of the major landowners, CIN Lasalle, who represents the Coalboard Pension Fund who own St James’s Centre and adjoining sites, a site which now you would recognise as The Walk and Harvey Nichols, but at the time was occupied by office buildings and so on; and Railtrack, who own Waverly Station and so on, and they agreed to work with us on a bigger scheme to complement — if the Parliament was to happen there — further investment.  We included proposals, which are in as part of the background of our submission, not for the Government saying these things would happen if the Government was to make this decision.  Those included, for instance, building a new retail bridge across Leith Street, which would connect direct unto St James’s Centre through new build and into St Andrew’s Square.

 

108.          Mr Campbell QC:  So these were, if you like, ideal projects coming in the wake of the Parliament proposals perhaps?

 

109.          Mr Wall:  These were projects that ourselves and our prospective partners felt were genuinely achievable and they felt, as we did, that it would be much easier to make those things happen if the Parliament was in position.

 

110.          Mr Campbell QC:  The Scottish Office itself, of course, is the owner of buildings in the vicinity as well?

 

111.          Mr Wall:  That was another point we made.  The Scottish Office owns two major buildings quite close.  The point I would make about the office quarter of the city centre drifting westwards also means that the corollary of that is that values on the east begin to drift downwards.  The location of Parliament there would certainly strengthen them and therefore there would be an uplift in value.  We employed GVA Grimley, a firm of property consultants, to provide valuations as to what they thought the uplift in value of the Scottish Office landed interest would be in the immediate vicinity.

 

112.          The total they estimated across two buildings was £4·5 million. We represented at the Scottish Office that, in effect, that was value that they were gaining if they made this decision that they would not gain if, for instance, they were to choose to put the Parliament at Leith.

 

10.30 am

 

113.          Mr Campbell QC: Thank you. Could we just look at one or two documents, Mr Wall, please, to set this in its proper context? Could you look at MIS/1/035? Is this you writing to Richard Emerson at Historic Scotland, outlining your broad proposals and reflecting your understanding of his response?

 

114.          Mr Wall: Yes. We had a meeting with Mr Emerson and outlined, at that stage, our thoughts on the various different aspects of the projects and sought his advice, particularly with respect to St Andrew’s House and the setting. Because it was so important, I thought it sensible to write down what I believed had been said, and sent it to him and asked him to confirm I had broadly got it correct, which he was kind enough to do. And then we used this information… In fact I sent this letter off to the design team saying, “Here is a brief synopsis of the Historic Scotland issues which need to be taken on board”.

 

115.          Mr Campbell QC: And this is September 1997, before the presentation?

 

116.          Mr Wall: Yes.

 

117.          Mr Campbell QC: Could you look at SE/2/938? This is a letter of 17 October 1997 from EDI to Mr Anderson, your Chairman, in respect of the firmness of the costs which were being put forward? I wonder if you could read to the Inquiry the middle paragraph.

 

118.          Mr Wall: “Clearly, with limited time and the very limited information we have been provided with to date, our proposals, particularly in respect of costs, are necessarily broad. We welcome, therefore, very much the chance to turn these into detailed firm figures and look forward to both the provision of the brief for Scotland’s Parliament and the existing detailed technical analyses and reports on St Andrew’s House, so that we might prepare, in conjunction with your Officers, a reliable set of costs and the necessary information to allow you to make a fully informed judgement.”

 

119.          Mr Campbell QC: Thank you.. What was happening here, Mr Wall, please, in respect of EDI’s proposals?

 

120.          Mr Wall:  We did our presentation — what I call our formal presentation — to the Scottish Office on the morning of 17 October, and it lasted about an hour and 10 minutes or something of that order.

 

121.          Mr Campbell QC: Did that include the Secretary of State as part of the audience?

 

122.          Mr Wall: Yes. I do have a list somewhere of who was present, but it was certainly headed by Donald Dewar, Henry McLeish, Wendy Alexander, Mr Elder and a number of senior officers.

 

123.          Mr Campbell QC: Yes.

 

124.          Mr Wall: I could provide the list if you required it.

 

125.          Mr Campbell QC: Yes, I interrupted you. I am sorry. You do not need to get that list, just to get your confirmation that the Secretary of State was there.

 

126.          Mr Wall: When the meeting was over, as always after these presentations, you sort of huddle together and say, “Well, how did it go?” We felt it had gone quite well, and we felt the critical aspect for ourselves was the question of costs, that if we could confirm or keep the costs at or about the level we were talking about, we were in with a very strong chance in that context. Donald Anderson who was the Chair of the EDI Group , sent this letter to Donald Dewar, as he had led the presentation on behalf of EDI. There was Donald Anderson, Duncan Sutherland, myself; it was a team on our side as well.

 

127.          Mr Campbell QC: Just to re-emphasise: Donald Anderson was the Chairman of EDI and also at that time a member of a local authority?

 

128.          Mr Wall: Yes.

 

129.          Mr Campbell QC: A councillor?

 

130.          Mr Wall: Yes.

 

131.          Mr Campbell QC: Duncan Sutherland was the Chief Executive of EDI and not a member of a local authority?

 

132.          Mr Wall: No, no.

 

133.          Mr Campbell QC: And you were the Head of Property and also not a member of a local authority?

 

134.          Mr Wall: No.

 

135.          Mr Campbell QC: Thank you.

 

136.          Mr Wall: And so we drafted this letter. I think we were concerned that we had not been able to put as much certainty into our figures as we would have preferred to do and we wanted more information. I do not know whether it was justified or not, in a sense, but we felt quite confident about the work we had done, in so much as the information we had got and as long as there was nothing exceptional or unusual that we were unaware of, we thought probably as more detail, technical information, clarity as to the brief and things like that emerged, we would be able either to confirm the figures or be close enough to feel that we were in with a very strong chance.

 

137.          Mr Campbell QC: Did you get any feel, Mr Wall, for how robust your initial — I think you called them “reliably indicative” — figures were to what might be more realistic after this presentation?

 

138.          Mr Wall: The straight answer to your question is no. I also would like to comment that the price of a building is not the cost of building. The price of the building is the price you want to pay for it. The price is partly a determination of what quality, what speed, what nature of building you want, and so on. So an office does not cost £10; a certain type of office costs £10, and the same with the Parliament.  We thought the figures were tight. It would not be easy, it was not as generous a budget as sometimes one gets, but it was not a budget that was completely out of order.

 

139.          Mr Campbell QC: Would you ever have described it, on reflection, as unrealistic?

 

140.          Mr Wall: Without knowing what is in the heads of the people in terms of what quality, what vision they had for the sort of quality of the Parliament in how much granite, how much polished wood and things like that — we did not think it was. I suppose, to be honest, with the exception that we always thought the £10 million to £40 million was essentially the construction cost. But other than that, it did seem to us to be achievable.

 

141.          Mr Campbell QC: You see, I have got this picture of you still somewhat at arm’s length from the clients, or the prospective clients, in that you are having meetings, certainly, and you have met other officials like Historic Scotland, and you are making a formal presentation to a group including the senior politician, but you are not engaging with the Scottish Office, in the sense that you are not getting from the Scottish Office a robust list of requirements and being told, “Right, we understand what you are about, now go away and cost those and come back and tell us”.

 

142.          Mr Wall: Well, at the time we took what we received and did our best with it.  We asked constantly for a more detailed briefing — I mean we had to ask because that is what one does.  I think we thought fundamentally it was not there. It was not that they were hiding something from us or had better information that would have allowed us to engage more clearly.

 

143.          Mr Campbell QC: Can I ask you to look, please, just moving on now in the sequence of events, at document SE/2/921? This is a letter from the Secretary of State, as you will see, dated 31 October to your Chairman at the time, in which the Secretary of State says:

 

144. “I very much agree that we need robust, independent costings of the options which face us on a site for the Scottish Parliament building. As you will now know, I have therefore asked officials to arrange the commissioning of separate design feasibility studies for the relevant locations, and also to arrange for an independent cost consultant to prepare building cost estimates on the basis of the outcome of the feasibility studies. In addition, officials are also arranging to commission a transport and environmental impact assessment.

 

145. I hope this information will be available in about two months’ time and I hope, if possible, to make a final decision around the turn of the year. I am very anxious that EDI Group and others who have taken a constructive interest in this issue should be kept in touch with progress.”

 

146.          And then he makes some comment on Mr Anderson’s own comments.

 

147.          Now, what we have here is a decision being taken to, as it were, leave the developers’ efforts to one side and to embark on a first set of studies. I wonder, as a process for the selection of a site for a key civic building, do you have any comment on that as a process?

 

148.          Mr Wall: The letter was not a surprise to us because Duncan Sutherland had had a meeting with the Scottish Office on the following Monday. We were told then that two architects would be appointed, one for Leith and one for Calton Hill. A quantity surveyor would be asked to cost both of them. We offered our own services, both of our full design team, because they were only appointing an architect which, we felt, would not provide the roundedness of a response that was required without an engineer and other specialists involved in the creation of buildings, construction advisers, and so on.

 

149.          But also we were concerned that they were only commissioning a design for an addition to St Andrew’s House and not also for a new building.  We have talked a good deal about costs, but there were other objectives in the client’s mind — or we believed there were, sorry, I should say — and the ability to create a brand-new Parliament, to make a modern statement about a modern Scotland and things like that was along with costs, in a sense, a key criteria. So we were very keen that in any independent analysis the Scottish Office wished to proceed with, that that would be within the parameters as well.

 

150.          There was a further meeting — I cannot immediately recall the date, but I think a fortnight later, something of that order — at which this was raised again, when the Scottish Office did say at least it would do a cost comparison, because although the refurbishment of St Andrew’s House and creating a building in it in our proposals is cheaper than creating a new building, what that, not hides, but what is maybe not immediately clear is that, of course, St Andrew’s House becomes smaller. So, the price appears smaller because you are refurbishing less of St Andrew’s House, whereas in the big one, you are refurbishing all of it.

 

151.          Now refurbishment is quite a common experience and you think, oh, it must be much cheaper to take an existing building and knock it about a bit, because you’ve got the building there. But it can often become very expensive, particularly when it is a listed building and Historic Scotland have requirements, as they did here, for window frames which — I have some experience of this — are very expensive to refurbish. 1930s window frames and things like that. So we pressed the Scottish Office to at least do, not a design, but a cost comparison.

 

152.          Mr Campbell QC: You used that expression twice in that answer: a “cost comparison” between what and what?

 

153.          Mr Wall: Between an addition to St Andrew’s House and a new building on Regent Road.

 

154.          Mr Campbell QC: Right. Not a cost comparison between the EDI proposals and the feasibility study produced by the architects?

 

155.          Mr Wall: No. We were having a conversation in the context of the process they had publicly announced they were proceeding on. It would be disingenuous not to say that our arguments around cost were genuine in the technical sense, but were also motivated by the desire to keep the alternative of a brand-new building, which we thought might be a high political objective. Ultimately, the decision would not be made purely on “what is the cheapest”.

 

156.          Mr Campbell QC: Now, put yourself in the chair of the Secretary of State, or at least those advising him, the senior decision-makers. A decision has been taken to appoint different architects to carry out feasibility studies on three competing sites. You have spoken about the way you put a team together, no doubt at some expense. What do you think of the process which was apparently designed to inform the Secretary of State, that is to say, the appointment of architects for different sites, and only architects, not a team.

 

157.          Mr Wall: I must say at the time I was slightly surprised. At the first meeting we were told there were two, and subsequently there were three, because the Haymarket site was added to that process. They were appointing different architects because the purpose is not to get the right answer so much as to compare different answers. Then as much commonality between the proposals will help you make that judgement. I was also surprised that it did not appoint other members of the team. It was particularly true of our own proposals for Calton Hill that engineering was a key part.

 

158.          It is not the quantity surveyor who manages the cost; it is the team that creates a project that costs a certain amount of money.  It is an interactive process between a group of professionals and, ultimately, the client making judgements about how best to solve the issues, given what are often competing criteria, together.

 

159.          Mr Campbell QC:  In your view would the Secretary of State, armed with three feasibility studies, have had reliable criteria, reliable parameters to help him make a decision, or only partly reliable?

 

10.45 am

 

160.          Mr Wall:  I do not think that is for me judge, Sir.  The Scottish Office sought the information they thought they needed to advise.

 

161.          Mr Campbell QC:  Yes, but you are very experienced in this field and if you come to this Inquiry as a very experienced head of a large development company, you must be able to express a view as to whether or not the process which was adopted was one which did, or could, have given the decision-makers a reliable datum line on which to make their final decision.

 

162.          Mr Wall:  Hindsight, of course, is an easy thing.  I think I personally would have done it differently, but I am not saying that the way it was done was wrong.

 

163.          Mr Campbell QC:  Architects commissioned to carry out a feasibility study may, or may not, have a relationship with the final decision.  Does that in any way impact on the relationship between the commissioning client and the architect?

 

164.          Mr Wall:  We are all professionals and try to do our best.  It is nevertheless the case, I suspect, that people whose proposals are put forward and are then subsequently going to be tested in reality, try harder or are more concerned about the product they provide than those who are doing an exercise which is clearly of value but is not actually going to happen.

 

165.          Mr Campbell QC:  Thank you.  Look at MIS/1/032, please.  This is a minute — if I could see the top of the page, please, first: Scottish Parliament location, meeting with Scottish Office, 21 October — and Mr Brown was there and your own Chief Executive, Mr Sutherland.  We see that the meeting was set up to discuss the follow-up to the presentation and Mr Brown, we can see in bold, outlined the process that they were now going through.  There is a list of bullet points of the process which is outlined.  The third bullet point I am interested in, was that communicated back to you?

 

166. “The favoured option is the new chamber within St Andrews House.”

 

167.          Were you able to discover “favoured” by whom or anything about that expression of opinion?

 

168.          Mr Wall:  I do not honestly recall, Sir, the minute.  It was certainly the situation I referred to earlier that we were concerned to keep a new build as part of the equation.  But who favoured it, and why, I genuinely have no recollection of at all, I am afraid.

 

169.          Mr Campbell QC:  If you could look at the little sub-paragraph above the next sub-heading:

 

170. “The two (possibly three) schemes will be given to an independent cost consultant —  probably London based who will cost both schemes.”

 

171.          I think we could read both or all schemes:

 

172. “This will be done on an ‘ independent from Scottish Office’ basis.”

 

173.          All very commendable.  What does it mean?

 

174.          Mr Wall:  The note is written by Duncan.  I can only take it at face value.  One would suspect a quote given — it has been given quotation marks — and it is saying they are not going to use their in-house team to cost it.  If you look further down, you will see under “Future Role of EDI”, the third bullet point:

 

175. “I requested that we get sight of the costings.”

 

176.          It may be some reaction to that, and it is possible the Scottish Office felt that Duncan’s comments might have been calling into question the independence of the internal judgements and therefore the Scottish Office is reinforcing the point that it was going to be done by a quantity surveyor who had no axe to grind one way or the other.  I speculate on that analysis.

 

177.          Mr Campbell QC:  Is it the correct understanding that the commissioning of independent cost consultants, independent from the Scottish Office, was to look at the feasibility studies and not at the developers’ proposals, which had been earlier advanced to the Scottish Office?

 

178.          Mr Wall:  Certainly our understanding was they were going to cost out the proposals to be done by Benson & Forsyth and Page and Park.

 

179.          Mr Campbell QC:  Your proposal document is at MIS/1/41, MIS/1/42, MIS/1/143 and MIS/1/41.  This is an index showing what the document contains and the next page, an introduction.  Could we just look at the next page, “Key Assumptions”?  You say there:

 

180. “Broad criteria have been the basis of our initial analysis.  Many of these follow the general brief from the Scottish Office.”

 

181.          I asked you a question about the building user brief.  Do you recall ever receiving that?

 

182.          Mr Wall:  No, not at all. 

 

183.          Mr Campbell QC:  So, in a sense that you are working to a brief, is that a brief, as it were, partly deduced by yourselves from the White Paper and other documents and partly deduced from meeting with officials?

 

184.          Mr Wall:  All of this here, some of it was in the White Paper, but this is deduced from the meetings with officials.  We felt it fairly stated what we understood the objectives of the officials, at that stage, were.

 

185.          Mr Campbell QC:  Yes.  If we run through that list we can see: accessibility, open government, sustainability, £40 million cost limit, 150,000 square feet in total which broadly equates to 15,000 square metres, a debating chamber of a certain size, office space, access for all sectors of the population, national stature of building, some car parking, secure environment, possibly private finance and — I do not know what you mean by the last one — competition.  Competition for a designer, or a building, or a site or what?

 

186.          Mr Wall:  To be perfectly frank, I cannot recall.  We certainly had an architectural competition as part of our process.  It may have been a reference to competition for the costs of creating the building because EDI would not say, it is going to cost £38 million, or whatever.  We would have cost competitions for all the different elements that go to make up the building. 

 

187.          We offered, in pure commercial terms, to carry out the development either for a management fee or, alternatively, if the Government preferred, to take a lease of the building, to still do it for a management fee but then to dispose of the building at the end to an appropriate institution and then to share the profit with the Scottish Office, which would ensue from such a development.

 

188.          Mr Campbell QC:  Does this document discuss the financing options?

 

189.          Mr Wall:  I think it does.

 

190.          Mr Campbell QC:  Page 19, I think (MIS/1/058).

 

191.          Mr Wall:  Yes, page 19 certainly has the broad financial aspects.  It does not mention what I have just said to you.  There is more detail on page 20.

 

192.          Mr Campbell QC:  It does not mention, I think, the possibility of financing the building in a variety of ways.

 

193.          Mr Wall:  No, but I am fairly confident — and I am just going to try and refresh my memory — that at our presentation that was the document we sent in and we talked at the meeting on 17 October where we worked out our programme of presentation before we went in and a large part of it was around the financial aspects.  I am looking here at the notes I prepared before we went to the meeting to give us a structure to speak to.  The things we touched upon were financial assumptions, build costs of the core Parliament options, the build costs of ancillary elements — for instance, the square — a deal with the £15 million that is currently committed — that is a reference to St Andrew’s House costs “ongoing” — I apologise for that word — the revenue costs over a 20-year period including security and added-value elements to the public purse, summary against Treasury proposal, and so on.  So we did talk about those things.

 

194.          Then under the next section, which we called “Taking the Project Forward” we said it could be done in a private finance initiative route, which is leasing it to the Government and selling it on, or through an EDI role if the Government wanted to hold on to what was such a central building to the nature of the state, that we would just do it for a management fee.  There was no developers’ profit, as one might otherwise normally expect.

 

195.          Mr Campbell QC:  OK.  Since we are not rerunning this competition in this Inquiry, I would like to move on a little bit.

 

196.          You have called this financial package “General Summary” — I am looking at page 20 (MIS/1/059) of the document.  Can we just run through the figures?  Option A, within St Andrew’s House, total cost £36 million.  Now, “Government-owned buildings, £4·5 million” — what is that a reference to?

 

197.          Mr Wall:  That was what we suggested would be the increase in value of Government buildings owned close by.

 

198.          Mr Campbell QC:  OK.  So that is increase in value accruing to the public estate?

 

199.          Mr Wall:  Yes.

 

200.          Mr Campbell QC:  “Private sector estate at 50%” — what does that mean?

 

201.          Mr Wall:  The argument we presented was that what would happen to the Scottish Office’s own buildings, at that stage, would also happen to a number of private-sector-owned buildings and that some of that increase in value could be captured for the project.  We had had discussions with some people who had confirmed in principle that that was acceptable and we proposed that that might be achievable, but I would certainly caution that was the least reliable element of our proposal.

 

202.          Mr Campbell QC:  This is not a matter of extracting that value from those buildings and putting it into construction costs?

 

203.          Mr Wall:  We would envisage some of it being extracted and used towards the improvements in the public realm.

 

204.          Mr Campbell QC:  “VAT recovered £5 million” — is that a reference to VAT recoverable on work on listed buildings?

 

205.          Mr Wall:  Yes.  The understanding was that we were in competition with the proposals for Leith, which by definition would be new build and would have to pay full VAT, whereas ours — well, a large part — whether it was a new parliamentary chamber or an addition, would be refurbishment and therefore that was a saving compared with a new build.

 

206.          Mr Campbell QC:  “Space costs saving £1 million” — what does that mean?

 

207.          Mr Wall:  If we went with the refurbishment we are talking about, it actually produced slightly more space in Option A, which was the Chamber inside St Andrew’s House, than actually the brief required.  With Option B, of course, it provided substantially more space, and you will see that the space cost saving there is much greater.  What that meant was that, although the total cost of the project as proposed was either of those two figures, there would be “space left over” which could be utilised by the Scottish Office for the civil servants, substitute for other space or — and this was certainly recognised by officers in early discussions — just gave some flexibility in the project because it was still early days.  If the Scottish Office had determined maybe they needed another 50 civil servants to run it, or other back-up facilities or something, there was some flexibility in our proposals.  That was translated into cash because again we were trying to create the most cost-effective presentation.

 

208.          Mr Campbell QC:  Can we see anything here for the cost of reaccommodating the civil servants who might be displaced from St Andrew’s House?

 

209.          Mr Wall:  No.

 

210.          Mr Campbell QC:  Was that something that you discussed with the Scottish Office officials?

 

211.          Mr Wall:  I do not recall it being asked.

 

212.          Mr Campbell QC:  Then you have a subtotal, total added value to Government, which is simply the sum of those four figures.  You are subtracting the cost of the Parliament building balance required.  It is not quite right to look at that as a tentative build cost, is it?

 

213.          Mr Wall:  No, not at all.  As I mentioned to you earlier, the private-sector competition is the weakest, but the space cost saving is genuinely correct. In a sense our proposals, because we were using buildings, exceed the brief in a way they would not do with a modern building, and in terms of spending that money you are going to get more space than you can use, and you can use that for other purposes. Scottish Office has, or had, a very large, extensive estate, a lot of it was leased, it would be relatively easy to rearrange things to lose leasing elsewhere and take that space up.

 

11.00 am

 

214.          Mr Campbell QC: Can we look at MIS/1/050 just to see this in graphic form? Is this a plan of the section A option, if I can call it that?

 

215.          Mr Wall: That is a plan of Option A, yes.

 

216.          Mr Campbell QC: Can we see within the inner arms of St Andrew’s House the proposed Debating Chamber?

 

217.          Mr Wall: Yes, it does not come out at all on the computer. It actually does not come out very well ― this is a photocopy of a colour original, Sir, so it has lost some definition in the process.

 

218.          Mr Campbell QC: What is the circular indication inside the arms of the New Street bus depot?

 

219.          Mr Wall: When we began the project, as with any of these things, you run through a whole range of possibilities, and at one stage we considered whether we could provide the additional offices required for the Scottish Office, and then to be the Scottish Executive, on the site of what is known as New Street bus garage, which is that site. In the end we decided it was not necessary, but we thought it was useful to include it as part of the background to our proposals because it does allow the opportunity for additional space to be added in due course, or for a different approach to be had. We also looked at the possibility of putting the secure car parking there and keeping it away from the building and people coming up by way of lift or funicular and things like that.

 

220.          Mr Campbell QC: We should recognise that there is a significant change in level, should we not, between ―

 

221.          Mr Wall: Yes, indeed, and famously up Jacob’s Ladder. We did not quite envisage MSPs bounding up there every morning from a garage, so we thought a lift or a funicular would be more appropriate.

 

222.          Mr Campbell QC: Could you look at the next page, please, MIS/1/051? That is a little clearer on the screen, you can see the Debating Chamber there, inserted between the arms of St Andrew’s House.

 

223.          Mr Wall: And creating in front of it what we call the Members’ Terrace, which would make a great place for MSPs and their guests and so on to step outside. However one avoids it, it is impossible not to think in these terms. In some cases the analogy is Westminster and so on. The word “terrace” may be unfortunate; the point was to use the location to be able to create something that offered a number of good opportunities for use.

 

224.          Mr Campbell QC: MIS/1/052, please. Again, that is only a sketch drawing, I can see that ―

 

225.          Mr Wall: What is technically referred to as an artist’s impression. What we are trying to convey is that with the Chamber looking across the old town, across to Arthur’s Seat and so on, it would just be an absolutely grand place to work in.

 

226.          Mr Campbell QC: I see in the text there that you have considered the issue of security. You told us earlier on that you took on a security consultant. Did you build into your cost estimates his advice? Or the cost of his advice?

 

227.          Mr Wall: Not in the sense you asked the question. Certainly it was an issue; all of us were slightly taken aback by the attitude towards security by the Scottish Office, so we added that person later. We were concerned about the cost not so much of the building itself, but of running security afterwards. This was the issue that was raised with us, rather than the construction costs of creating security.

 

228.          Our consultant felt ― and that really comes down to the number of entrances and exits; if you have got 10 entrances you have to have 10 security guards, if you have one, you have only got to have one ― our security consultant thought ours was actually quite easy to police, partly because in a sense like a castle it stands on a cliff, it stands underneath a cliff, there are only two ways in and out, either end of Regent Road, so it is actually quite easy to control and manage. In a sense we felt reassured by that and were quite confident to deal with any questions that came our way in the presentation. I do not recall any in particular, but we did not feel our project was weakened, as compared with others, by any security aspects once we had sought advice from the consultant.

 

229.          Mr Campbell QC: Thank you. Could we look then quickly at MIS/1/053? Is that a graphic of Option B, this time showing the Debating Chamber as a circular indication to the east of existing St Andrew’s House?

 

230.          Mr Wall: That is correct.

 

231.          Mr Campbell QC: Is the land flat there, or would you have to build out over the cliff?

 

232.          Mr Wall: It is essentially flat. I mean, it begins to fall down again, but there was not an issue for creating the building.

 

233.          Mr Campbell QC: Finally on this document, can you confirm, we do not need to look at it, that there are also illustrations and some comment about the treatment of Waterloo Place and the new Parliament Square?

 

234.          Mr Wall: Yes, Sir.

 

235.          Mr Campbell QC: Could you look at MS/1/57? What is this, Mr Wall?

 

236.          Mr Wall: This is the timetable we proposed for carrying out the project.

 

237.          Mr Campbell QC: And this appears to have been prepared for you by Bovis.

 

238.          Mr Wall: That is correct.

 

239.          Mr Campbell QC: Just talk us through it, would you please? I can see that the first item is architectural competition.

 

240.          Mr Wall: Yes, I am sorry that is very difficult to read on the photocopy, but it runs from the week beginning 10 November through to the week ending 30 March.

 

241.          Mr Campbell QC: Now, that is quite a long time, four months. All but four months.

 

242.          Mr Wall: It seemed, I cannot actually recall whether it was a requirement or just what everybody took for granted, but a building of such a nature would certainly be procured by way of competition. At the time the standard text, you might call it, for competitions was a document issued by what was then the DETR, Department of Environment, Transport and something.

 

243.          Mr Campbell QC: And the Regions.

 

244.          Mr Wall: Anyway, they issued a document in which there were, I believe, six different forms of having competitions, you know, from international, all-singing, all-dancing one stage; two stage; invited competitions and things like that. At that stage we had had no indication off the Scottish Office of what form of competition they thought was appropriate, so we allowed enough time to do a competition, and I would say, having done a number myself, it is slightly tight, but I did believe it was achievable. At one level, if we are being challenged, we do not know what sort of competition we are having, so that is more than enough to have an invited competition for instance. It is probably a bit tight for an international two-stage.

 

245.          Mr Campbell QC: Can we note also in this indicative chart that item 9, “Prepared Detailed Design”, starts in June 1998 and works through to the end of November 1998, and construction is thought to start on St Andrew’s House in September. Did you have any view at that time as to what might be an appropriate style of procurement vehicle for the contractor?

 

246.          Mr Wall: Given the tight timetable that was required to provide a Parliament in operation for when it would be elected, it seemed to us, and I recall writing this to ― Bovis acted for us in two roles; one was as project managers, and one was as construction consultants, and there were two different groups who provided input, both of which are clearly relevant to this process, together with the other person who normally advises in detail is the quantity surveyor ― and I remember writing a letter, I think it was to the project manager, saying we are going to need some fairly sophisticated contractual and management arrangements to meet this timetable. Certainly this allows for beginning construction before final designs are finished, tendering packages as you go along, rather than, we would probably have taken on a contractor on a management fee rather than appointing a contractor, and so on.

 

247.          Mr Campbell QC: Did you have any experience at this time of running a contract in that fashion?

 

248.          Mr Wall: Not as direct as that, we used a certain not dissimilar thing on Gyle Shopping Centre. I was currently looking at such a process on another project, but it did not proceed ultimately. But it is increasingly common on major contracts to look at a number of issues, everything from a very traditional one where you do all the designs beforehand, issue tenders and so on, right through to starting building before you have done more than a sketch. Because, as in all these things, there are a number of things to balance, and sometimes for clients if you have won a contract and you need a factory to do it, and you have to start production on 5 May or something like that, the absolute criteria is speed. If at the end of the day a factory should have cost £43 a square foot and it ends up costing you £50, it is neither here nor there if you have got a massive contract. So what we tried to do here, within the time constraints that we understood were the objective of the client, was to create a programme that we believed would competently produce a project that would be on time and on cost.

 

249.          Mr Campbell QC: Is it possible to say generally whether a time might come in such an arrangement when it is possible to fix the budget so that a cost level will not be exceeded?

 

250.          Mr Wall: Yes, I mean ―

 

251.          Mr Campbell QC: Or does it depend on the case?

 

252.          Mr Wall: One of the key objectives clearly is to fix it as early as one can, for everybody’s benefit, not just the client, but the team and the contractor and so on. It depends on the form of approach you adopt how quickly you tie it down, and then you get into the issues of who is taking what risk and who is therefore both responsible for it and paying for it. So it is theoretically possible to transfer all the risk on time to the contractor, but you will pay the contractor a lot more money than you would if you were to keep the risk yourself. So there is a whole series of balances between these things, which you take and then you put in the specific context and all the pressures that are on for cost control as against speed or quality and things like that, and try and find a form that fits. Or you choose a form that you believe fits, I should say.

 

253.          Mr Campbell QC: Yes, I can immediately see why different types of client might have different requirements, for example for speed or, on the other extreme, for cost limitation.

 

254.          Mr Wall: The problem of course is clients want everything; they want it as fast as possible and as cheap as possible, and you have to find a balance between these different things.

 

255.          Mr Campbell QC: Yes, just for completeness again, could you look at MS/1/065, please? Is that a copy of a minute from Mr Alistair Brown of the Scottish Office dated 20 August in which he says at the beginning he met with you on 18 August to hear your representations? Then he sets out a series of criteria, which Mr Brown says “not surprisingly he”, that is you:

 

256.  “advocated a Regent Road solution on the basis of the following arguments”

 

257.          which he sets out there. I am sure that this was not copied to you, Mr Wall, but does it fairly reflect what you said at the time you met him in August?

 

258.          Mr Wall: I am just quickly reading it, Sir. If you could scroll down, please.

 

259.          Mr Campbell QC: If you go down to the bottom paragraph, I want to ask you about that, please. He is writing to Dr Gibbons, who is the Chief Architect of the Scottish Office, as we know:

 

260. “EDI seemed remarkably reticent about promoting their views and said they did not want to be seen to be stimulating public debate or overplaying their hand. It seemed that they were getting involved in detail at a time when the debate was fairly broad.”

 

261.          Now, this is, as I said to you, the third week of August 1997. Were you reticent, Mr Wall, in coming forward with these proposals?

 

262.          Mr Wall: Difficult to imagine me being reticent, Sir, but apparently I was.

 

263.          Mr Campbell QC: He says:

 

264. “While I avoided getting involved in the details of their scheme, it is apparent the reports in ‘The Scotsman’ were quite inaccurate.”

 

265.          Nothing new there, then. Can you remember what these reports were about?

 

266.          Mr Wall: I cannot, to be honest. The press cuttings are in the files, but I have not looked at them, I am afraid.

 

267.          Mr Campbell QC: Right. And he says to avoid subsequent criticism, he suggests you send an outline of your proposals to Dr Gibbons in the near future, which we know that you did, and subsequently presented them to the Scottish Office, Secretary of State and the officials. He describes you there as a major contender.

 

11.15 am.

 

268.          I think at MS/1/067 we can see you are actually handing in the documents to Dr Gibbons. I do not need to take time with that. Can we see at MS/1/068 Duncan Sutherland writing to Mr Brown? I would just like to pick up the last paragraph of the letter please, or the middle two paragraphs:

 

269. “You know, in our discussions with Tom”

 

270.          that is Mr Aitchison, the Chief Executive of City of Edinburgh Council —

 

271. “several issues were raised concerning the cost assumptions which you are currently using to appraise projects. One of the most important of these from our point of view is the £15 million contract currently being pursued on the structure of Old St Andrew’s House. Another which has been concerning us for some time is the base brief to which you are working. This is of key importance.”

 

272.          And then he asks for a meeting. Can I assume that he had that, that that meeting took place?

 

273.          Mr Wall: I think that was the meeting of 14 October from here, and, Sir, I have a minute of that meeting, and we talked about St Andrew’s House at some length in terms of its size and costs and so on.

 

274.          Mr Campbell QC: So you were appraised then of officials’ thinking, up-to-date thinking, of the likely cost of the St Andrew’s House refurbishment before or at about the time you submitted your own proposals?

 

275.          Mr Wall: Yes.

 

276.          Mr Campbell QC: Was your offer of your own design team to assist Page and Park ever taken up or entertained?

 

277.          Mr Wall: No. Well, I do not know if it was entertained. It certainly was not taken up.

 

278.          Mr Campbell QC: Did you innovate on your own proposals at all between the time of their submission and presentation to the Secretary of State and the taking of the decision to go for Holyrood?

 

279.          Mr Wall: The only additional information we provided, we were asked to put in writing the possibilities for private-sector contributions to the process, and we wrote on 15 December a letter together with some enclosures from other people indicating that either in principle or subject to things proceeding some money would be forthcoming.

 

280.          Mr Campbell QC: How were you able to say that with any confidence?

 

281.          Mr Wall: Well, there was a letter from one private-sector contributor subject to board approval and all these sorts of things but offering the sum of £1 million, which, in the context of £40 million, is not insubstantial.

 

282.          Mr Campbell QC: When did you first become aware that Holyrood was a candidate site?

 

283.          Mr Wall: We had a faxed press release in early December, the 8^th I believe, from the Scottish Office.

 

284.          Mr Campbell QC: Were you surprised?

 

285.          Mr Wall: I cannot honestly remember. I suspect I was, but I do not recall my emotions of the moment, you know.

 

286.          Mr Campbell QC: Yes. Did you take any action at the time to improve upon or boost or buttress your own proposals in any way?

 

287.          Mr Wall: Not that I can recall. I mean the process was not one such that allowed that, and, you know, we had made our pitch, and our understanding was now they were doing internal work to evaluate a number of options, so there was not much we could do in a sense. I mean we finished; we put in our letter which we had about, you know, the private sector, which we thought was a useful addition to our case.

 

288.          Mr Campbell QC: Did you take the matter into the public realm by using the media or doing interviews; television interviews, newspaper interviews?

 

289.          Mr Wall: I do not recall doing so, but I just genuinely do not know. It is possible that our Chair or our Chief Executive commented upon those things in the public prints, but I just genuinely do not recall so.

 

290.          Mr Campbell QC: Mr Wall, thank you very much for coming to the Inquiry. You have been most helpful. Sir, I have no more questions for Mr Wall.

 

291.          Lord Fraser: If I could just ask one question of you please, Mr Wall. Could you look at MS/1/069. This is a letter dated 15 December 1997 to Alistair Brown, the Director of Administration at the Scottish Office, and it comes from your then superior Mr Duncan Sutherland. So this letter comes after you have had intimation of the competitive presence of the Holyrood site. Is that right?

 

292.          Mr Wall: Yes.

 

293.          Lord Fraser: Could we go to the top of the second page of this letter (MS/1/070)? It says:

 

294. “Further to above, our discussion took place prior to the recent press reports that Calton Hill, costing up to £100 million….”

 

295.          Do you know where that figure first came from?

 

296.          Mr Wall: I do not. I suspect the letter is correct in that sense. We had seen reports in the press and were responding to that rather than anything… I mean, I think if we had been responding to some knowledge that had been passed to us by the Scottish Office or people directly involved we would have referred to it differently.

 

297.          Lord Fraser: Who so eloquently put it recently that you might be concerned about being frozen out? Look at the last paragraph there.

 

298.          Mr Wall: I do not honestly know. I mean this is a letter written by Duncan, and we all have our different styles. I know it is the sort of thing I would do as well, but it is clearly a reference to a conversation or, you know, some… One has file notes or notes in diaries of meetings, but there were occasional telephone conversations and things like that, to which I suspect it is a reference.

 

299.          Lord Fraser: One way in which someone, a developer, might get frozen out is if the word gets out that their scheme would cost £100 million whereas £40 million is the top limit being put on it, and I am trying to work out if there was a relationship between that revelation by somebody, or assertion by somebody, that it could cost up to £100 million and concern about being frozen out.

 

300.          Mr Wall: I really do not remember it. I think it is fair to say that it was a continuing concern of us that we were making presentations but what happened to them after that we do not know, and, you know, no presentation is perfect, and there are questions that must be asked and things challenged and so on, but we would have felt much more comfortable it they had said “Well, that seems a bit cheap. Can you really do that for £x?” Or even “That is too expensive. We are not looking for that quality” and we would have reviewed it and said either “We can do it for that, and we stand by it” or “You know, you are right and actually it should go up to £1 million” or whatever would have been appropriate.

 

301.          Lord Fraser: In trying to pull all this together, Mr Wall, I am trying to make sure at every stage that we do accurately compare like with like, and I have some concerns here that that is quite difficult to secure because one of the elements in your proposals, common to both of your proposals, is an upgrading of Waterloo Place, which might have cost about up to £5million. Is that right?

 

302.          Mr Wall: Somewhere there. I will just look at the figure for you, Sir. In one case it was £4 million, and in the other case it was £5 million.

 

303.          Lord Fraser: Yes. So if we were really just looking at the building and forgetting what might be done by the city or anyone else on improving Waterloo Place, and we bear in mind the £15 million, or a figure of thereabouts, which had already been committed to the upgrading of St Andrew’s House, to try and compare like with like should you not be deducting £20 million or £19 million?

 

304.          Mr Wall: If you were just comparing construction costs for the new debating chamber and the appropriate necessary additional accommodation, that would be correct, Sir, but what we were trying to do was to present a complete… I mean we wanted to make a proposal that whatever its costs and its timetables and so on was just meritorious, that people could see that this would be a grand place for Scotland to have its Parliament, that it would have a civic presence and dignity about it.

 

305.          Lord Fraser: On the other hand, as I have understood your evidence today, it was no part of EDI’s proposals to integrate either the chamber of the Old Royal High School together with possibly a tunnel from that building into what is St Andrew’s House.

 

306.          Mr Wall: It was in our early proposals. I know my files have sketches showing that, but, as I mentioned earlier, Sir, in order to meet the target of £40 million or thereby, if we had included that, it would definitely have pushed us over the edge. So we could meet the requirements in terms of accommodation of all sorts without using it, although we thought it was a strength that it was still there in a very attractive building, not very functionally useable, but a very attractive building, and could certainly be used for ancillary activities in regard to Parliament and so on.

 

307.          Lord Fraser: It seems to me the Secretary of State and others seem to have regarded the existing chamber of the Old Royal High School as either too small for MSPs and certainly too small for the presence of significant numbers of the public.

 

308.          Mr Wall: I know the building quite well, Sir, because I was part of the team that purchased it from the Scottish Office a few years before, and I have to say that it is not a good building. I mean it is a building of its period when they still did not have corridors, you know. So to move from one room to another, you have to move through rooms. It can be made to function in a way, but it is not, I would have thought, appropriate as a long-term home.

 

309.          Lord Fraser: But in any event, for your purposes, although it was called the Calton Hill proposal, no part of the expenditure that you suggested would have covered what is within the confines of what is the Old Royal High School buildings?

 

310.          Mr Wall: To be absolutely detailed, there was, I think, one element. I think it was £500,000 because if you put the new-build Parliament Chamber on Regent Road, almost certainly, not absolutely but almost certainly, you would have to move one of the lodges, and that was one of the comments Historic Scotland made to us that they did not mind that it would have to be moved, that it would have to be moved, that it could not just be demolished and lost, and so in our cost proposals for option B, which is the new parliamentary chamber, we included that. But also, if we had moved into the process it might have made it a condition of the design that building was not demolished, but we wanted to show that you could proceed on that basis and rearrange the building.

 

311.          Lord Fraser: Yes. We have yet to hear from Historic Scotland, but I hope we will be. My understanding from perusal of some of the correspondence is that they were not averse to the idea of there being a new build in the Calton Hill area. I wondered if that stemmed from any discussion you had had with them about building this new stand-alone assembly/Parliament building, or are we discussing something different?

 

312.          Mr Wall: My overall impression of the process when you think back to it was that Scottish Office officials were providing us in so much as they could with technical information, whether it was security, number of offices required or things like that. But they were not conveying any broader client judgement, you know, or, as clients often do, they look at a number of options, but they say in all things being “We would prefer a new building if that could be managed” or “We would prefer a refurbishment”, or whatever. And we were very clear in ourselves that what we were offering to the Scottish Office was either, within the cost parameters they had set and therefore, if you met the cost parameters, then the client has the luxury of a judgement, and they might prefer a refurbished one and save some more money and reuse the building; they might prefer something brand new.

 

313.          Lord Fraser: I think we will see from correspondence that Historic Scotland thought the idea of a sort of funicular up at Calton Hill was not the most attractive idea for the centre of Edinburgh, and that seems to have been conveyed to you. I wondered if anything about their rather broader views and rather more positive views about the presence of a new build on Calton Hill had similarly been conveyed to you.

 

314.          Mr Wall: The key meeting for us was my meeting with Richard Emerson, who was then the Inspector for Edinburgh, now the Chief Inspector. Certainly at that stage I am concentrating on St Andrew’s House and the setting, so what I was looking for, in a sense, was negatives not positives, you know. I was not saying “Do you like this, Richard.” What I needed to know was what would be a problem if we were to proceed with either of those, so that either we would avoid the problem or, if it was a cost issue and we had to retain or move the lodges — that was one of the issues that came out.

 

315.          I cannot genuinely recall Historic Scotland telling me they thought A or B was a good idea.  I think it was a genuinely professional consultation in which I was looking for guidance and advice on how to make the project as good as I could. 

 

11.30 am

 

316.          Lord Fraser:  Thank you very much, Mr Wall. 

 

317.          Mr Wall:  Could I add one more comment, Chair? 

 

318.          Lord Fraser:  Yes, please do. 

 

319.          Mr Wall:  I read through some of the transcripts and all the rest of it.  I think that one loses — and it is not a complaint — that sense, which does not come through in dry letters and meetings and things like that, the sense of buzz and excitement and enthusiasm for the project that was shared across a wide range of people and so on.  I think it is very difficult to catch atmospheres in quantity surveyors’ reports and things like that, but I do feel it is something that should not be lost sight of in the more technical analysis of the issues. 

 

320.          Lord Fraser:  I am certainly a little bit surprised that you were described as being remarkably reticent, because I think the EDI documentation does contain within it that sense of “we think we have got a good idea and we would like you to take it seriously”. 

 

321.          Thank you very much, Mr Wall. 

 

322.          Mr Campbell QC: Sir, I wonder if this would be a convenient time for a short break.  The next witness is Mr Eric Milligan. 

 

323.          Lord Fraser:  We will take a moment or two to let you settle. 

 

Informal break at 11.32 am

 

Resumed at 11.36 am

 

324.          Mr Campbell QC: Mr Milligan, good morning and thank you very much for coming to the Inquiry.  I am very grateful. 

 

325.          Can you confirm that you are Eric Milligan, the former Lord Provost of the City of Edinburgh, still a councillor, I think, and that you were the Lord Provost in May 1997? 

 

326.          Mr Eric Milligan  Yes. 

 

327.          Mr Campbell QC: I am not going to take you through the minutes, which we were spoken to by Mr Geddes when he was here last week, so this evidence can be relatively brief.  Can I ask you if you can recall after the election in May 1997 when it was you first had a conversation with the late Secretary of State about the location for a Parliament building? 

 

328.          Mr Milligan:  Oh my goodness.  I certainly can remember clearly, and it goes back some years before that, the first serious discussion about Leith.  It followed the decision of the then Conservative Government, when Ian Lang was Secretary of State, to announce that there was to be a new governmental headquarters constructed in Edinburgh and it would be in Leith.  It was a very controversial decision at the time, and a lot of people speculated that there was going to be a change of Government in 1992 and it may not happen. 

 

329.          Donald Dewar and myself went on a tour down Leith, and I spent the day persuading him that if he had been successful in becoming Secretary of State that would be one decision made by the Conservative Government that he should not change and reverse because there is a lot of merit in having a new Government headquarters in Leith.  I understand that the proposal, which came to fruition because the Conservative Government were returned to office in 1992, resulted in the building meeting the requirements of the Government coming along on budget and coming along on time. 

 

330.          I suppose, in the years that passed between 1992 right through until 1997, Donald Dewar started to take a keener interest in the transformation in the Leith area.  Following the election in 1997, very quickly — I would have said within a week or so — I would have been in discussions with Donald Dewar about a whole number of issues because remember, it was considered a surprise that he became Secretary of State.  In the run-up to that election, George Robertson had been the Shadow Secretary of State and everybody thought that George Robertson, in the event of a Labour Party victory, would become the Secretary of State.  There was a little surprise that the Prime Minister decided to invite George Robertson to become Secretary of State for Defence and Donald Dewar to become Secretary of State for Scotland. 

 

331.          I would have thought within the first few weeks, if not the first week, of Donald Dewar becoming Secretary of State, I would have been in touch with him, and him and I would have discussed a number of issues and I would, I am sure, have put to him a list of things I was hoping that he would be able to deliver for the good people of Edinburgh and Lothian. 

 

332.          Mr Campbell QC: It sounds from this account that you knew him quite well by then. 

 

333.          Mr Milligan:  I knew him very well; he was a very close personal friend of mine, and I valued the friendship that I enjoyed with him over many years. 

 

334.          Mr Campbell QC: Now, we know about the evolution of the White Paper and the delivery of the devolution idea in that form, the subsequent referendum and the introduction of the Scotland Act in the Houses of Parliament.  By when, Mr Milligan, were you aware that there was a shortlist of competing sites for the Parliament? 

 

335.          Mr Milligan: There was always an assumption made by people, certainly by the wider community, that if a Parliament was to be established in Scotland then it would be in the Old Royal High School.  That view carried through even the Constitutional Convention, I think, at one of their meetings.  But those of us that had experience of using the Royal High School, because it was used temporarily by the Convention of Scottish Local Authorities as a debating chamber, felt that it was much too constrained and that Scotland could do something better, if we were going to create a Parliament, than invite people to meet in the Old Royal High School. 

 

336.          I think that Donald Dewar’s view right from the start, and a view that he had held for some years before, was that the Royal High School was inadequate and that Scotland deserved something better.  So, I knew right from the start that there was going to be a debate about where the Parliament should be located. 

 

337.          Mr Campbell QC: OK.  Did you feel inclined to support one location over another, as Lord Provost? 

 

338.          Mr Milligan: I was actually very excited at the idea of doing something very dramatic down in Leith.  What we all know, of course, is that the New Town and the Old Town of Edinburgh enjoy World Heritage status; it is a conservation area, and if you want to do something dramatic, then it is very difficult to build something that is dramatic, that is going to make a statement about the mood and the architectural feel of Scotland that is within that built-up area. 

 

339.          We all know that the Calton Hill area in particular is an area that has been, for some years, an area with a lot of controversy surrounding it.  Indeed, when what we call Old St Andrew’s House was built in the 1930s, it actually took an intervention of the then Prime Minister Ramsay MacDonald to persuade the planning authority to grant approval for it.  There was much controversy about any build on that particular area of Edinburgh because the people in Edinburgh value the open space. 

 

340.          Mr Campbell QC: When you talk about controversy surrounding Calton Hill, are you talking about human activity or are you talking about views of Calton Hill from the various points of the compass? 

 

341.          Mr Milligan:  I am talking about the part that it kind of plays within Edinburgh.  I actually want to read to you a couple of paragraphs from what was said at the time by the Prime Minister about the Calton Hill site. 

 

342.          Mr Campbell QC: Now, which Prime Minister are we talking about? 

 

343.          Mr Milligan:  We are talking about when Old St Andrew’s House was constructed. 

 

344.          Mr Campbell QC: Briefly, if you will, Mr Milligan. 

 

345.          Mr Milligan:  I will be brief, but I think I will put a smile on your face: 

  346. “The report is almost certain to point out that there are no powers” —

 

347.          It goes on about the city council.  It then says:

 

348. “I have never yet known an important building put up without the expression of different opinions as to its merits and its defects, but the controversy which has been worked up in this instance is unique in its recklessness.  The more recent phases of the agitation, for instance, appear to have been based on a drawing published in ‘The Scotsman’ of the 24^th July, which has been accurately described as ‘a complete travesty of the original design.’” 

 

349.          I was interested when you were interviewing Mr Wall that you mentioned the inaccuracies that, from time to time, do appear in that august journal, and it seems that at least that august journal has been consistent: 

 

350. “To crowd the Calton Hill with buildings may be utilitarian, but it is damaging to the City, and the question must arise, before a final decision has been taken, as to whether this site is suitable for Government requirements.” 

 

351.          That view, which was expressed so clearly by the then Prime Minister, is something that all of us who know about Edinburgh are well aware of; that if you want to build something dramatic within the city centre, then the conservation lobby will cast a very critical eye over what you do, and any major construction, any dramatic building, was going to be very difficult on the Calton Hill site.  Quite simply —

 

352.          Mr Campbell QC: Did Donald Dewar know that, Mr Milligan? 

 

353.          Mr Milligan:  Yes, yes.  Donald Dewar knew an awful lot of things.  He certainly knew that Scotland deserved a Parliament of which it should be proud and one that would attract international interest and that it would be very difficult from a planning point of view to do that on the Calton Hill.   

 

354.          You have just listened to Mr Wall give you an explanation of EDI’s proposals at the time for how that site could be used.  I think it is fair to say, and I think I used the words in the statement that I prepared for you, that Donald Dewar considered that a kind of next best, a make-do-and-mend option.  It did not excite him; it did not fire his imagination.  Essentially, you were building out from the St Andrew’s House building that I spoke about that was built in the 1930s and building an extension at the back of it, rather like a conservatory option.  I think Scotland could get something better than that. 

 

355.          Mr Campbell QC: It is clear what you thought.  Are you clear what Donald Dewar thought when he saw what EDI had in mind?

 

356.          Mr Milligan: I am clear that Donald Dewar was very interested in the Leith option.

 

357.          Mr Campbell QC: Did Donald Dewar see any benefit from the possibility of proximity to Victoria Quay?

 

11.45 am

 

358.          Mr Milligan: Yes.

 

359.          Mr Campbell QC: What sort of benefit did he expect to see?

 

360.          Mr Milligan: I think there were three issues.  One was that the close proximity to the administrative headquarters seemed to make sense, so there is a building for the professionals and then the politicians would be near at hand — rather like what happens between Whitehall and Westminster in London today.  So that was one issue. 

 

361.          The second issue, I think though, was more to do with if you want to do something dramatic, then there is not the planning constraints placed upon you if you do it in Leith that there clearly is in the city centre.  I think that was the second. 

 

362.          I think there was a third, and this is a very important one in view of the task, of course, that you have been asked to carry out yourself with regards to trying to find out why it is that a Parliament that originally was going to cost some £40 million or so has now, we are told, risen to the point ten times that, to £400 million.  I think that the deal that could have been put in place if the Leith option had found more public support than it did would have been a partnership agreement between the Scottish Government and the Forth Ports Authority.  They would be very keen for the Parliament to be built there and they would have, of course, benefited from the big increase in the capital values of the land within their landholding in Leith. 

 

363.          I think that the option in Leith, had it been the one that found favour, would have offered those three benefits; the opportunity to do something dramatic, the opportunity to have a Parliament cheek by jowl with the new administrative headquarters and it would have been the most cost-effective option.  It is interesting that after some prevarication in the principality of Wales that, after looking for many different sites, they have concluded that going to their waterfront offers the most exciting place for their Assembly to be located. 

 

364.          Mr Campbell QC: In knowing Donald Dewar well and discussing these options for the location of the Parliament, did you form an impression as to how important it was to him to contain the cost of the project? 

 

365.          Mr Milligan: I have no —

 

366.          Mr Campbell QC: Just before you answer the question, we have heard that he had artistic leanings.  We have heard that he was interested in architecture and art.  We have heard that he was a cultured man.  We have also heard that he is a thrawn man, parsimonious, sometimes conscious of the value of money.  Now, you knew him well.  Sadly, he is not here to help us.  How important do you think delivery of something for a price was to him?

 

367.          Mr Milligan: I do not think that there is any doubt that Donald Dewar was cost-conscious.  Donald Dewar would not have been seen to have been an irresponsible, throwaway person — quite the reverse.  Donald Dewar would have been seen more as a Roundhead than a Cavalier.  I think that is a fair way to describe him.  The question of the cost and value for money would have been something that was uppermost in his mind.  But I think alongside that he did want the Parliament to be a building that was going to attract international interest.  I think as the weeks and the months and, indeed, the year or so passed, I think he became more interested in trying to do something that was grand, that was going to excite and enthuse people rather than just create a functional building where the elected Members of the new Scottish Parliament could gather.

 

368.          Mr Campbell QC: So, as Mr Wall said, he was rather the typical client who wants it all? 

 

369.          Mr Milligan: Don’t we all? 

 

370.          Mr Campbell QC: Could you look please at SE/2/193, which will appear on your screen in a moment?  Can we see that this is a Scottish Office minute, which you are not included in the circulation, but it refers to you in the first paragraph?  Do you recall that conversation with Mr Dewar, with Mr Geddes listening in?

 

371.          Mr Milligan: Yes. Many conversations.

 

372.          Mr Campbell QC: This is only a note of one such conversation, but are you telling us that there were quite a number of these?  Did you have quite easy access to the Secretary of State?

 

373.          Mr Milligan: Yes. 

 

374.          Lord Fraser: Take your time to read this if you want. 

 

375.          Mr Campbell QC: Sorry, you have not seen this before today?

 

376.          Mr Milligan: No, I have not.

 

377.          Mr Campbell QC: I apologise for putting it in front of you in this way.  You can see that the Secretary of State is reflecting what he calls the Government’s current thinking on possible locations and he is articulating the difficulties of the Old Royal High School.  I am summarising.  Is that a fair summary of that conversation?

 

378.          Mr Milligan: Yes. 

 

379.          Mr Campbell QC: You ask about cost in paragraph 3.  Having had this conversation, what did you take back to the Council’s thinking as to how Edinburgh could best assist the Scottish Office?

 

380.          Mr Milligan: I think there was two issues for the Council in this.  The first one was, of course, that our first priority was to ensure that if there was going to be a Parliament created in Scotland then the Parliament should be created in Edinburgh in order to underpin Edinburgh’s status as the capital city of Scotland.  That was our first overriding concern. 

 

381.          The second one, of course, was, well, if it is to be in Edinburgh, where should it be within Edinburgh?  A significant number of members of the Council, most of whom had served on the previous Edinburgh District Council, were very keen on the Royal High School.  I think you have got to remember that, when the Conservative Government decided not to move on devolution and to dispose of the building, it was Edinburgh District Council who intervened to purchase the Royal High School, believing, at the time, that in doing so they were safeguarding a place for a Parliament in Scotland to be established some time in the future.  So, they had a particular kind of emotional attachment to the Royal High School that was not shared by those of us who had served on the Regional Council. 

 

382.          There was also the view, which you have just heard from Mr Wall on behalf of the EDI, that it was important for the developments within the city centre for the Parliament to be located in the city centre from an economic point of view, rather than outwith the city centre.  It is fair to say there were differences of views within the Council about exactly where it should be. 

 

383.          Mr Campbell QC: But a lingering attachment to the High School? 

384.          Mr Milligan: Yes.

 

385.          Mr Campbell QC: Could you look at, if you have it, EC/1/008, please?  We see here a minute of the Council’s Policy and Resources Committee, dated just a couple of weeks after your conversation with Mr Dewar: 

 

386. “A motion by Councillor Geddes welcoming the announcement that Edinburgh would be the location; to note the intention to have a wide-ranging examination of potential sites; to offer co-operation to Scottish Office representatives, but to recognise that the new Parliament House remains an option for the Scottish Parliament.”

 

387.          It is right, is it not, that in the sequence of minutes which date from this time through to December the city never comes out as a firm enthusiast for any site?  

 

388.          Mr Milligan: That is true.

 

389.          Mr Campbell QC: How do you account for that?

 

390.          Mr Milligan: Probably to do with the different views that existed in the Council at the time.  There certainly was a significant number of members of the Council who felt that if the Parliament was to be established it should be in the Royal High School.  There is equally a number of members who felt that the Royal High School did not offer what Scotland deserved.  Indeed, the task that our colleagues on EDI were asked to do, of course, was to go away and come up with something different on the Calton Hill site and to show how you could actually create something at Calton Hill that would fire people’s interest and imagination.  It would not have involved, or had the constraints of, the Royal High School building, but it also would have been possible to have got planning approval for it because it was not something very dramatic.  That is how it came about.  So the Council, at the time, was not four-square behind any of the options; what it was four-square behind was that it should happen at Edinburgh.  Certainly, the Labour group, rather uncharacteristically at the time, allowed members who felt strongly about individual sites to express their point of view.  The group whip took a kind of break for a little while. 

 

391.          Mr Campbell QC: You took Donald Dewar to Leith.  You discussed the advantages of Leith.  I think you yourself were an enthusiast for Leith, for all the reasons you have given.  Did you change your mind as time went on and become more disposed to a city centre site?

 

392.          Mr Milligan: I was disappointed that that option did not gather as much public support as I thought it was entitled to.  The Holyrood option came on really rather later.  The discussion, at one stage, was really between other sites: Leith as against, obviously, Calton Hill, the possibility of Haymarket, and, indeed, there were one or two other sites being canvassed as well.  Wherever there was open ground there was somebody popping up telling you that that could be a site where a Parliament could be constructed, if only you would listen to their point of view. 

 

393.          The serious consideration of Holyrood, which I think had actually appeared on the early list, came probably around September/October/November 1997.  Certainly, by the end of that year, it was quite clear that Donald Dewar, given the public opposition to the idea of having the Parliament located in Leith, decided to look for a city centre site that would offer him the opportunity to build something that was an architectural statement for Scotland.  Holyrood offered that dual attraction of an element of development that could not have been constructed on Calton Hill, and, at the same time, it was within the city centre.  I think Donald Dewar became very enthusiastic about Holyrood when he saw the potential of the site. 

 

394.          Mr Campbell QC: You talked about public opposition to Leith.  Was it opposition or was it simply disinterest in Leith?

 

395.          Mr Milligan: If you know anything about the history of Edinburgh, you will know there have always been people in Edinburgh that are rather disparaging about Leith.  That is just one of the truisms of what goes on in Edinburgh and has gone on for many, many years.  Indeed, it resulted in Leith becoming a separate borough for some years.  I think there are people in Edinburgh, even now, who tend to have that kind of negative view about Leith and are unaware of the dramatic transformation that has taken place in the area and the potential of that area. 

 

396.          If you look at the way Edinburgh has been developing over many, many years, the centre of gravity of our city has been moving to the west.  There was a time, you know, when the Castle was the most westerly building in Edinburgh, whereas now, of course, as everybody knows, the centre of gravity has moved, and there is so much economic activity on the extreme west of Edinburgh that we have all the attendant problems of congestion on that side.  An opportunity to try and redress that was something that excited me. 

 

397.          Mr Campbell QC: Yes, I understand that.  What about the public though?  As Lord Provost, you would have a sense of what the public were saying, whether in the pages of the newspapers or otherwise. 

 

398.          Mr Milligan: I have already amused you and myself by quoting ‘The Scotsman’.  I think it is also fair to say that its stablemate paper, the ‘Evening News’, did actually at the time indicate some support for the idea of the Parliament in Leith and then organised a kind of poll of the readers, who were overwhelmingly in favour of Calton Hill.  I think that signalled to the powers that be that the Leith option did not have perhaps the level of public support within the Edinburgh area that it really was entitled to. 

 

399.          Mr Campbell QC: Did Donald Dewar regard the public’s view as a significant matter?

 

400.          Mr Milligan: Yes.  No question about that.  I had a number of discussions with him. He often came back to the point why is it that there is hardly anybody out there sort of champing at the bit to put forward the Leith option?  I think that was disappointing, frankly and I think there was an opportunity lost there.  I suspect if we had decided to go ahead we would not be having this Inquiry right now. 

 

401.          Mr Campbell QC: Well, we can all speculate about that, Mr Milligan.  When did you first learn that Holyrood was a site in the running?

 

402.          Mr Milligan: A serious candidate at the back-end of 1997.   

 

12.00 pm

 

403.          I could actually give you, if you are interested, a particular date — it is only a case of checking my old diaries — when I had a dinner with Donald Dewar in the Palace, at Holyrood Palace, we came out the Palace and both of us walked across to the site, and that is the first time I remember discussing with Donald Dewar the serious possibility of the Holyrood site being the preferred location. Well, my secretary is here with me — she can provide you with the date if it is of any interest to you, but it is almost certainly a date in November 1997.

 

404.          Mr Campbell QC: Right. Did you form an impression as to whether he had made his mind up by then?

 

405.          Mr Milligan: No. It would be unfair to say he had made his mind up by then, but it would be fair to say that the idea of having the Parliament at Holyrood had its attractions for him, and he clearly was enthusiastic at the idea of looking at a site within the city centre that offered him the opportunity to build something that he believed appropriate for the importance of the establishment of a Parliament, and I think at that point, he certainly cooled on the Leith option.

 

406.          Mr Campbell QC: Well, if you could provide that date to us in due course, that would be very helpful, thank you.  Sir, I do not think I have any more questions for Councillor Milligan. I am very grateful to you, Councillor, thank you.

 

407.          Sorry Sir. I am reminded, in relation to the development of any of the sites, but particularly after the event you have just spoken about, did Donald Dewar ever express a view to you as to how the best possible architect or the best possible design might be procured for the particular chosen site.

 

408.          Mr Milligan: No. I have got to say to you, the answer to that is no. The next — it is not directly relevant to the purpose of your Inquiry — but the next issue, which I think you have maybe touched on was the temporary home for the Parliament, and very quickly, it became clear that if Holyrood was to be the option, there was going to be some time before the Parliament was built. Nobody anticipated just how long, but certainly it was going to be some time. There was extensive meetings and discussions about where the temporary home should be that eventually resulted in the Council, of course, providing the accommodation to complement the General Assembly building, so we kind of moved on very quickly to that issue, and I had no discussions about who should be the architect or any of that.

 

409.          Mr Campbell QC: So just to follow that up then, it was quite clear to you after Holyrood was selected, was it, that a temporary home would be required, and Donald Dewar understood this?

 

410.          Mr Milligan: Yes, and there was then considerable press speculation that the temporary home would be in the former debating chamber of the Strathclyde Regional Council through in Glasgow. And we were not very pleased about that, and my colleague, Keith Geddes, who has already given evidence to you, and myself kind of rolled our sleeves up and says “Well, we are not going to allow that to happen, and we are going to put our other alternative proposal forward”, which Donald Dewar backed.

 

411.          Mr Campbell QC: And part of that proposal was the vacating of the former Regional Council headquarters —

 

412.          Mr Milligan:  County Council headquarters —

 

413.          Mr Campbell QC: On George IV Bridge —

 

414.          Mr Milligan: Which is now the committee rooms for the Scottish Parliament, and offers extra office space for Members of the Scottish Parliament, because I think the General Assembly building by itself had its attractions, but unless it had, alongside it, extra office space, it was not going to find favour, and it was the Council that facilitated that.

 

415.          Mr Campbell QC: Yes.  Thank you very much, Mr Milligan.

 

416.          Lord Fraser: Can I just ask you a couple of points, Mr Milligan?

 

417.          Mr Milligan: Yes, of course.

 

418.          Lord Fraser: I am very interested in your recollection of this discussion with the Secretary of State after being in Holyrood Palace itself, and if we could get the date of that sometime it would obviously be interesting.

 

419.          When the press release came out from the then Scottish Office on 9 January 1998, when Donald Dewar said “I am opting for new build in the historic heart of Edinburgh”, was the way it was entitled, one of the factors that seemed to influence him was that Edinburgh Council — City Council by then, had firm plans for pedestrianisation around the Holyrood site. Do you recollect that as being an influencing factor or not.

 

420.          Mr Milligan: I do not think it was — it was maybe an influencing factor, I do not think it was a particularly significant one. I think it was the opportunity to build afresh within the city centre was really what attracted Donald Dewar, and between maybe late 1997 through to very early into 1998, his view became quite clear, and I think he then became personally very excited at the possibilities of Holyrood.

 

421.          Lord Fraser: I take it as Lord Provost, the old brewery site was not exactly a jewel in the heart of the city, so you would not be terribly upset if it were to disappear altogether.

 

422.          Mr Milligan: No, but I would be upset if the product disappeared though.

 

423.          Lord Fraser: A discussion for another day, I think, Mr Milligan.

 

424.          Mr Milligan: Just as we have spoken, and certainly I have spoken at some length about the transformation in Leith, I think it has also got to be borne in mind that the decision to establish the Parliament at Holyrood has led to a dramatic transformation in that area of Edinburgh, which for many years, was a kind of forgotten, rather badly neglected part of Edinburgh. It has gone through something of a transformation, and if we tease the ‘The Scotsman’ again, it is interesting that that is where their headquarters are now.

 

425.          Lord Fraser: It was a good selection by them anyway, wasn’t it. Thank you very much.

 

426.          Mr Milligan: Thank you.

 

427.          Mr Campbell QC: I do not have any more witnesses available before lunch.

 

428.          Lord Fraser: Thank you very much, Mr Milligan, we are most grateful to you.

 

429.          Mr Campbell QC: The first witness this afternoon is Mr Tom Aitchison, the Chief Executive of  City of Edinburgh Council at 2.00 pm, followed by Mr Andrew Holmes, the Head of City Development. I am afraid they are scheduled for then, and I cannot bring them just now. Can I invite you to adjourn until then?

 

430.          Lord Fraser: Well, we will adjourn until 2.00 pm. If they happen to be here slightly earlier than that, we will try and get going then. Thank you very much.

 

Hearing adjourned at 12.06 pm