Q121 Mr Curry: I know that, but I could put in an outline planning application to redevelop the Houses of Parliament. Westminster would look at it because applying for planning permission is a long way from being in a position to do anything. This is perhaps not a fair question but let me ask you one question first about Canadian practice. Another thing I have discovered is the optimism bias. Is this a way of saying these people cannot add up so we had better add 20% for luck? Did you have optimism biases in Canada?
Mr Bell: Well we certainly would have done sensitivity analyses, which would be the equivalent of an optimism bias, to show worst case and best.
Q122 Mr Curry: Is there some fixed percentage for an optimum bias? Do you add on X%?
Mr Bell: You would apply a percentage to the sensitivity analysis, yes.
Q123 Mr Curry: However polite we are, what you are saying is that this lot are trying to pull the wool over our eyes because it is bound to cost more than they think.
Mr Bell: As the record shows, many of these projects do have a tendency to come in much higher than the original estimate.
Q124 Mr Curry: How big an optimism bias do you think we ought to put on a project for a new nuclear power station?
Mr Bell: I have no idea. I am not an expert on nuclear power.
Q125 Mr Curry: It would have to be quite big though, would you not think? Mr Pringle, what would be the standard optimism bias. How many projects have got optimism biases in them?
Mr Pringle: It is a feature of the public sector now, but all projects have contingency sums because precise estimating does not take into account-
Q126 Mr Curry: Is there any such thing as a pessimism bias?
Mr Pringle: I have not come across a pessimism bias but I have come across targets for bringing things in under budget: bonuses.
Q127 Mr Curry: Yes, those are prevalent in the health service at the moment, are they not? Any of us who have had conversations with our PCTs recently will be very much aware of that. So that is fairly standard practice. Back to the land. Presumably right at the beginning of it, somebody sort of pottered along to Westminster Council and said "Can we talk about this chaps?".
Mr Nettel: At the beginning of this, we had a scheme that was very close to outline planning permission.
Q128 Mr Curry: Right, so you did have land at the beginning did you, or not? If nothing had changed and the money had been okay, would the assumption have been that the scheme you had would have been consistent with the council's planning policies and the land would have been adequate for that?
Mr Nettel: Correct.
Q129 Mr Curry: Okay. Meanwhile what happens is that the scheme changes and that is because it is required to do different things, is that right, or a new criterion for what you have to accommodate?
Mr Nettel: As a result of the work we did after this OBC, and the scheme had been designed on that basis, we realised that we had a bigger project on our hands than we originally thought.
Q130 Mr Curry: It was a bigger project, because the original conception had not been right or because you were required to incorporate in it new functions and new facilities or new criteria?
Mr Nettel: The latter. We went through a very detailed process, from memory with 32 different clinical groups across both hospital trusts, to establish precisely what was required in clinical terms.