Paul Finch’s letter from London: We need to educate the public about what buildings really cost
The thoughtful report by the University of Cambridge into cost and time over-runs on Lottery-funded arts buildings should be required reading for all public-sector clients. Theatres of war: public spending on buildings for the arts hits a series of nails firmly on the head, not least the disjunction between the way to attract Lottery money (whizzy proposal) and the cost of delivering a real building.
The report’s warnings about arts buildings could equally be applied to projects outside the arts sector. Let us take, for example, the biggest overspend in UK construction history. This was the channel tunnel, on which not a single architect was involved. Heroic certainly, but the contract meant that the client would be condemned to making a loss for eternity.
And let’s remember that the ‘on time, on budget’ mantra can only be trumpeted about the London Olympics for one simple reason: we funded a second set of contractors to monitor and challenge what the first lot was doing. In other words, we paid a rather substantial premium to get people to do their jobs properly. It would be interesting to get a list of individuals paid bonuses from the public purse for acting as Olympic construction policemen, and then asking why they were needed if the procurement procedures for the actual contractors were adequate.
Substantial contingency sums wisely set aside by Gordon Brown certainly came in useful, not so much because of construction overspend, but because Lend Lease were unable to complete purchase of the Olympic Village despite having won an immaculately box-ticked competitive process in competition with other major contractors.
The box-tickers had already failed to achieve any form of competition for the main stadium (only one conforming bidder!), and failed to get the village funded. It has subsequently been sold for considerably less than it cost to build; a reverse miracle given the strength of London’s residential market. I wonder if it has affected bonuses at all.
There are two underlying problems in public-sector construction, of which some of the above issues are merely symptoms. The first is that, as Paul Morrell used to remind us at CABE, politicians are reluctant to tell the public what a project is likely to cost, because they fear that there will be an outcry and it will be scrapped before it gets off the ground. The figures quoted for the Scottish Parliament, and indeed the London Olympics, would be good examples of this.
The second issue relates to what buildings actually cost, from site survey to snagging, the cost of use, and of adaptation over time. Politicians and professionals pay lip service to the idea of lifetime costs but in reality, they treat any contractor that can suggest a saving of a sixpence as a guru. As Pevsner once remarked, ‘The English will spare no expense to get something on the cheap’.
Architects are not immune from criticism in this, too often quoting ‘costs’ which are simply pure construction tenders, excluding VAT and all professional fees. Out-turn costs are quite a different matter, and have led to those who are not serial clients, and therefore less able to look after themselves, having an understandable distrust of the industry.
What we need is a ‘blue book’ that outlines every single activity and cost that may go into the creation of a new or retrofitted building. It needs to express the costs in elemental terms, then have an internet update reflecting current prices. It is the stock-in-trade for quantity surveyors but is sadly lacking as routine public information.
What this should mean is that, when someone tells you what a building or infrastructure is going to ‘cost’, journalists, councillors, MPs and the public can probe in advance what exactly the figure represents, with the blue book open in front of them.
That way we will avoid architects and builders being endlessly criticised by the National Audit Office and the Public Accounts Committee. In the short-term, there will be a price paid for being honest. But in the long run, if the public understands that you don’t get a new parliamentary building for the price of a large B&Q, it will be worth it.