Q41 Mr Bacon: There is something inherently odd, is there not, in going oV to a potential provider and asking them to build a hospital without yourself having a fairly good idea, at least in outline, of what it is that you are wanting back in terms of what it does. Not necessarily what it looks like in terms of the material used to construct the cladding on the outside but what it looks like in terms of roughly the space it occupies, roughly its size and to a fair degree of specificity what it is you want; effectively a design brief.
Mr Pringle: That is absolutely right. The more design that can be done up front, the better prepared the project is to go to the market as well as also dialling out some of those risks that this project seems to have tripped up on.
Q42 Mr Bacon: I should like to ask you about costs, because the putative costs obviously went up significantly on this project and we have seen that on many projects; famously on the Scottish Parliament, on Portcullis House across the road and on a number of other projects, some of which were notorious and dragged on for many years. In the case of the Scottish Parliament, I always wondered, having looked at lots of other projects, how anyone thought that £40 million would be an adequate sum and £400 million sounded roughly more in the ballpark of what it might end up being, which of course it did. Is it the case that we are actually looking at spiralling costs or is it that we are looking at inadequate information about what the real true costs are?
Mr Pringle: It would be wise not to get into the Scottish Parliament.
Q43 Mr Bacon: No; no. Especially with Mr Davidson here. The point is, is it simply that they really spiralled, is it that the costs really shot up through the roof or is it really that a better and fuller understanding of what the costs, and those costs always had been as such, actually were?
Mr Pringle: It is our belief that some of those initial bids were completely unrealistic, as the costs revealed themselves at a later stage when they were properly analysed. That is not to say that some costs do not get out of control as additional requirements are put into projects and there are then the issues of change control. If you stuck to the single point, testing the consequences of the brief, in other words what any particular client in the public sector wants from the buildings, can be most effectively done when an outline design is done at an early stage. You can actually see the consequences, the physical and the spatial consequences, how it is going to have to fit on a site, whether there are transportation issues et cetera, et cetera. Those can then be costed in the most direct way and it is not being done in an abstract way and a cost per bed way. The case, in terms of controlling costs, is well made for an outline design at an early stage.
Q44 Mr Bacon: I visited the Belfast City Cancer Hospital where what they call the exemplar approach was adopted and the early project design phase from the client side was led by an architect working with a range of different professionals who knew before they went out to bid that it would cost £48.2 million and that is more or less exactly what it cost. Is it actually the case that you can take an example like that and read it across to any kind of project or were there things which were special about Belfast that made it possible there, but which would not be possible elsewhere?
Mr Pringle: The Belfast example you give is a good pilot of the proposals that we are putting forward for PFI generally and yes, you can pretty much read it across. It is a good example of the sort of certainty that you can get in almost any type of project if you do that much more work up front.
Q45 Mr Bacon: In your note to the Committee you talk about better resourced clients and one of the points you make, and I quote, is "Too often, at the moment, the public sector gatekeepers are inexperienced and under-supported in terms of professional, expert advice".1 Would not somebody in response to that say "Well that is the whole point of having a bid process constructed around PFI, because you have professional expert advice available and it is available to the PFI bidders"?
Mr Pringle: No, it does not quite work like that. They are indeed expert; in fact there is an inequality of expertise on the client and the PFI consortia bidders' side. Public sector clients are generally inexperienced and that is not to say they are unintelligent, it is just that there has not been a lot of public sector work going around for the last 30 years and now there is a huge amount of it suddenly on the scene. What we regularly find is that good clients, well-structured, regularly get good projects and public sector clients who are suddenly thrown into building projects which they are not used to, often really struggle to manage the complexities of these huge new capital projects which they are landed with. That is another good reason for getting a really comprehensive professional team on the client side to advise them on their side of the consortium, PFI, contract on how they should be proceeding, how they should be structuring their ideas, how they should be structuring their approach to the whole thing. Their inexperience needs support. One of the things we have done at the RIBA is set a complete group of people up to do exactly that, to give help, not to go in and be designers, just to help clients think their way through these sorts of problems.
Q46 Mr Bacon: We have seen in the Ministry of Defence that smart acquisition at least aims to spend more in the assessment phase early on whereby, effectively before they get a long way into the manufacturing or the design phase, they have a better idea of where it is they are going. Is there an analogy that can apply or a comparison that can usefully be applied between smart acquisition for weapon systems in the MoD and smart procurement generally?
Mr Pringle: It is the same thing. It does not matter what sort of project you are doing: the better your preparation before you enter into the real thick of the project, the better your outcome is going to be. Again, that is what we are recommending.
Q47 Mr Bacon: One thing I really do not understand about this is the land issue. Common sense would suggest that something as central as the land issue must be sorted out very early on. How do you think that something so central as land in this could only be identified so late in the day?
Mr Pringle: Two reasons have brought that about from my reading of the papers. One is the change in the brief requirements with the alteration to the brief both from consumerism, which ups the space standards per bed, and other changes to the brief. A bigger hospital was required and then, as I understand it, the understanding of the local authority's height requirements capped the limits of the available site to contain a particular project and so they essentially ran out of road, ran out of land.
Q48 Mr Bacon: Do you think, if an approach such as you are recommending had been adopted, that this land issue could have been either solved or flagged up for the significant issue that it was to a greater extent earlier on?
Mr Pringle: Well I would like to think so, because what we are advocating is better scrutiny of the brief, better development of the brief, better signing off of the brief and of course if you are doing early design work, you can very naturally test the capacity of the land and you can talk with the local authority and you can even obtain your outline planning permission at that stage.
Chairman: Thank you Mr Pringle. It is very helpful to have an independent voice.
Q49 Greg Clark: May I start with a declaration? I was a member of Westminster Council during the period in question, but I do not recall being part of any discussions about this subject. My question is about a different subject. First of all, just starting with Mr Taylor, in answer to one of the Chairman's questions, I think I heard you say that there was no stated requirement from the Department that the finances of this should be off balance sheet. Did I hear that correctly?
Mr Taylor: What I said was that the guidance we were giving to the trusts was about the affordability of the scheme. So it was not a condition per se of the scheme going forward that it had to be off balance sheet, as I understand it.
Q50 Greg Clark: Mr Nettel that does not seem to be your recollection. You thought this needed to be off balance sheet. That is correct, is it not?
Mr Nettel: Mr Taylor is right in the strict sense, but in so far as at one stage the discussions did involve on balance sheet discussions, it had a consequence on the overall capital spend within the NHS, because the numbers that we were talking about, due to the treatment of some of the financial issues involving the business case in 2004, were significantly large to affect the overall spending power of the Department of Health in capital terms across the NHS.
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