Value for money: The Scottish Parliament building project

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I’ve been working on my new book, Customer-Centric Project Management, and one of the main concepts my co-author Phil Peplow and I discuss is how projects define success.

The current draft of the book (no guarantee it will make it into the final version) includes the construction of the Scottish Parliament building as an example of how different stakeholder groups interpret success differently.

The design of the building was the result of a competition, and architectural firms responded to a brief with the hope of being selected as the company that would win the work of designing the prestigious new building. The Secretary of State for Scotland at the time, Donald Dewar, launched the competition saying that architectural quality, value for money, accessibility and a design “worthy of the hopes and aspirations of the Scottish people were important.

The building user brief that the contest entrants were issued with also stressed the importance of a stunning architectural design, saying it must “reflect the Parliament’s status,” “promote good environmental practice” and “be an important symbol for Scotland” while offering value for money. In other words, these were the critical success factors for the project, and from the beginning there was a focus on the design and the budget. As experienced project managers will realise, this situation created the risk of conflict between these two factors. Could you really have a fabulous design while still delivering value for money?

Debating Chamber http://www.flickr.com/photos/andrew_j_w/2337847393/in/photostream/

Scottish Parliament Debating Chamber: Photo: copyright andrew_j_w

Building projects are notorious for going over budget, and this project was no different. The guideline at the beginning of the procurement process was for a budget of £50m but an inquiry into the overspend concluded that in reality quality was more important than cost. The project suffered from not having realistic budget estimates.

Poor communication also played a part in the rocketing costs. Messages were filtered for political reasons before being passed on to management. For example, a quantity surveyor produced an estimate of £89m, including a margin in case of risk; after all, this was a one-of-a-kind project, and it was highly likely there would be some unforeseen circumstances. The actual estimate passed up the line did not include this risk prediction, and was given as £62m.

The project involved a number of different contractors, all of whom used different jargon. Is ‘estimate’ the same as ‘forecast’? Putting jargon aside, if you don’t have project reports at all you have no chance of knowing what is going on. There were concerns over whether or not the project would be completed within budget as early as November 1998. However, it took until March 1999 before Dewar was given formal warning of any potential cost rise. If budget was a key success criteria for the project, it seems it was not communicated adequately to those responsible for reporting against it – or they were providing the information to the wrong stakeholders.

The Scottish Parliament building has been open for years now – the Members met there for the first time in 2004, three years later than expected. The project finished late, and went significantly over budget. The estimated final cost reported to the Finance Committee was £431m! That’s a long way from the original £50m.

Scottish Parliament http://www.flickr.com/photos/ajnabee/14231618/in/photostream/

Scottish Parliament building. Photo: copyright ajnabeee

If sticking to budget was important for the project, the team didn’t do a particularly good job of delivering successfully. Was it value for money? That’s a different matter altogether, as value for money is subjective.

The building attracted 100,000 visitors in the first 3 months. It has won nine design awards. The three main parts of the building have been rated as ‘Excellent’ for environmental performance and the development has increased biodiversity in the area. The carbon footprint of the Holyrood complex has been reduced by 12% in 5 years.

These results show that the success criteria of accessibility, stunning design and good environmental practice have been met. Maybe that does mean the project achieved value for money. What do you think?

Posted on: January 30, 2012 03:53 PM | Permalink

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