Comment Bob McKittrick Coming clean on costs
We live in an age of accountability — and a new research project argues that it extends to the public sector clients procuring construction projects out of our taxes
ONE OUTCOME OF the MPs’ expenses scandal in the UK is that most of us are now fully aware of the words transparency and accountability. This is timely because, for the past two and a half years, I have been chairman of the multi-stakeholder group that is responsible for the UK pilot of the Construction Sector Transparency Initiative (CoST). This international initiative, which is supported by the UK Department for International Development and the World Bank, is designed specifically to promote transparency, accountability and value for money in publicly financed construction projects. The other pilot countries are Ethiopia, Malawi, the Philippines, Tanzania, Vietnam and Zambia. The CoST concept is not rocket science. The idea is for procuring entities, probably better known to those of us in construction as clients, to regularly publish what is referred to as material information at all stages of the project cycle, from the twinkle in someone’s eye, through project selection, planning, preliminary and final design, construction and possibly the maintenance period. “Material” in this context means sufficient information is disclosed to enable the public to make informed judgements about the cost, quality and value for money of the project concerned. UK public projects are funded by UK
taxpayers, and they have a right to know how their money is being spent. Such information can be requested through a Freedom of Information Act request to the relevant public body, but this is time- consuming and expensive. CoST aims to
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make the disclosure a normal part of the regular reporting process of public bodies. There are numerous examples of where
transparency could have led to very different outcomes, but one that comes immediately to mind is the Scottish Parliament buildings in Edinburgh, where costs escalated from £50m in 1998 to a final sum of £414m agreed in 2006. I visited the site in October 2002, when construction was about 50% complete, and at that stage there were 32 architects permanently resident on site, which indicates the massive scale of changes that were still taking place. Lord Fraser of Carmyllie published his
report into the project in September 2004, and in that he said: “... there has been a series of systemic failures and an unwillingness of those involved in the Project to call a halt and demand a re- appraisal. The few that tried were quickly shown the door. In my view at relatively early stages a number of decisions were taken which were fundamentally wrong or wholly misleading... “Whenever there was a conflict between
” UK public projects are funded by UK taxpayers, and they have a right to know how their money is being spent.”
quality and cost, quality was preferred. Whenever there was a conflict between early completion and cost, completion was preferred without in fact any significant acceleration being achieved”. Taxpayers deserve to know what is happening with their money. Yes, the Members of the Scottish Parliament had been elected by the people of Scotland, but they betrayed the trust of those who had voted by not informing them regularly of the disaster that was unfolding. The public could then have been involved in a debate on the future of the project. Another example of where there has
been a paucity of transparency and accountability is PFI projects, which UK taxpayers and their children and grandchildren will be paying for over many years. One of the biggest problems with PFI projects is the way in which risk is transferred — public bodies seem to transfer almost all the risk of a project to the special-purpose vehicles that take on the projects. In many other countries it is optimum risk as opposed to total risk that is transferred. The remainder, which is generally less definable, lies where it should — with the public body. In the CoST pilot, we did not look at PFI
projects, simply because of the short period of the study and because of their complexity. However, it is my opinion that PFI projects should be as transparent as any other, because the ultimate funder is the public purse. I commend the CoST concept to all involved in construction.
Bob McKittrick FICE chaired the UK CoST pilot
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