10.5.1 The Council officers must also be given credit for undertaking in February 2002, only three months after the signing of the Project Agreement, a structured workshop to review how they had managed the procurement of Phase 1 of the PPP1 project. It was attended by senior officers from the various departments of the Council who had been involved in the project up to that point.
10.5.2 The record of the workshop, being so close to the completion of this stage of the project, probably presents the best evidence to the Inquiry as to an accurate reflection of the perception of Council officers at the time of the success of the project in delivering a quality outcome.
10.5.3 The workshop acknowledged the success of the project in achieving handover dates that matched their initial projections. It was also felt by those attending that their process of consultation with stakeholders throughout the period had been thorough and effective. The following are extracts from the record of the workshop:
"Overall it is recognised that the Council team and project manager, in conjunction with advisers did an excellent job in delivering PPP1."
10.5.4 The conclusions from the workshop, however, also identified some key areas which would have benefitted from a greater focus in the stages leading up to the signing of the Project Agreement. The following are extracts from the Council record of the review.
"INADEQUATE INTERNAL RESOURCING OF THE PROJECT
"Resourcing is considered to be the biggest failing of this project. Due to project pressures, a number of unacceptable management practices were adopted by the Council whereby intolerable pressures were put on individuals to "get the job done." It is recommended that an appropriately staffed, dedicated, project team should be established for future projects."
PROJECT BOARD NOT CLOSE ENOUGH TO PROJECT
"It is noted on occasion that the full Project Board did not have an overall view of the important issues facing the project. It is recommended that the Project Board should be limited and consist of key representation only in order that they are close enough to the project to make truly informed decisions."
LACK OF INNOVATION
"The team noted that there was an element of disappointment from the technical teams in the lack of innovation seen in the bidders' responses. In future, the balance between innovative and prescriptive approaches to design should be agreed such that the Council objectives are understood and achieved."
DESIGN QUALITY
"It was considered that design as an issue did not get the priority it deserved."
"Design is considered OK and adequate, not outstanding in aesthetics, but functionally suitable."
"……. had wanted a parallel to the secondary schools in Leith………. where exciting and innovative design was achieved."
"Should have had a stronger idea of vision for the future, needed more time."
10.5.5 In June 2004, after completion of the construction and a period of occupation of the Phase 1 PPP1 schools, the Executive Team of the Council undertook a second review of the PPP1 project to agree any further revisions required in their approach to the separate forth-coming PPP2 project for a further eight schools. This review involved significant consultation with stakeholders to seek their views on PPP1. The resultant paper listed the perceived successes of the PPP1 project and issues that should receive greater attention in PPP2. The successes were recorded as:
• "Improved environment for students, staff and community users
• Modern P.E. facilities
• Bright, open and airy spaces
• Flexibility of teaching spaces in primary schools
• The valuing of school communities."
10.5.6 Amongst the issues arising from PPP1 the following points were recorded:
• "Planning and resources should be invested in ensuring that the external environment has high quality learning, social and play spaces and greater attention should be given to the aesthetic aspects of design of buildings…
• Specify precisely what is required in a new building at the beginning of the project thus avoiding the need for costly and time consuming changes."
10.5.7 The view was expressed at both the 2002 and 2004 reviews of PPP1 that the design quality in terms of the experience of the spaces within the schools, whilst clearly providing a far superior environment compared to the schools they were replacing, did not fully satisfy the aspirations of those involved.
10.5.8 To the credit of the Council, it was determined that design would be given a much higher profile by the team involved in the PPP2 project and that this decision would be reflected in a greater weighting being given to design criteria in the assessment of the bids.
10.5.9 There was clearly a reinforced awareness on the part of the Council, both prior to the commencement and after the completion of the construction of the Phase 1 PPP1 schools, of the need as a client to proactively take steps to protect quality.
10.5.10 Despite the recognition by the Council in the 2002 review that the period up to the signing of the Project Agreement had suffered from insufficient resourcing, evidence to the Inquiry suggested that the Council team suffered from an even greater lack of resources for the important stages of the detailed development of the Phase 1 schools that followed.
10.5.11 Several witnesses strongly expressed the view to the Inquiry that there was an apparent assumption on the part of the Council, perhaps partly due to the lack of in-house experience in PPP, that the role required of the Council would be significantly reduced once the Project Agreement was signed and that all responsibility then lay on the successful consortium, ESP, to go ahead and deliver the project, virtually on their own, in accordance with the signed agreement.
10.5.12 This assumption could be viewed as somewhat naive on the part of the Council, but advice from Government agencies at the time tended to support this approach. In fact, a statement still on the Scottish Government's website, dated as recently as 2009 on 'Non-Profit Distributing Public Private Partnerships' includes the following commentary:
"The differences (between PPP and more conventional procurement models) are in the nature of the work undertaken at each stage, notably the need to focus on specification of outputs, and in the project management activity after a contract is signed. The client is likely to be less engaged in monitoring the progress of the construction of any asset concerned, but will take a close interest in overall progress towards the delivery of defined service outputs."
10.5.13 As previously described in Section 4, the Council's main interface with the Consortium, during the demanding period of design development of the Phase 1 PPP1 schools, following the signing of the Project Agreement, was reduced for several months to virtually a single Council officer with no previous experience of major projects. This team was eventually only increased to a team of four Council officers.
10.5.14 The Inquiry was advised that insufficient funding had been put in place by the Council to provide a properly resourced internal team for this stage of the process and that the original team of technical advisers who provided support to the project from within the various Council departments, had been sent back to their substantive roles and were no longer associated with the project.
10.5.15 It is during this period that the more detailed design solutions for the schools evolved, including the frequent submission of developed or revised drawings for review by the client, the assessment and approval of room layouts, requests for changes, consultation with the schools, cost management and confirmation of materials, furniture, fittings and equipment being offered by the Consortium in relation to all 13 projects in Phase 1. These deliberations and negotiations are a fundamental element of the PPP process in terms of their potential impact on the final quality of the scheme and need a client team that is properly resourced and skilled to deal with them.
10.5.16 The Inquiry was advised that the small team, amongst all the other demands it faced, regularly struggled to cope with reviewing and approving large quantities of drawings, many hundreds in total, which would arrive in the Project Team's office requiring rapid turn-round by ESP. Despite the immense pressure placed on the members of the small team that undertook this role, they succeeded in maintaining the required rate of progress for the project and in so doing showed great commitment to the success of the project.
10.5.17 The issue that subsequently arose in relation to the inadequate construction of the walls was not related to this particular lack of applied Council resources.
10.5.18 It is clear to the Inquiry that the Council itself recognised that it had significantly failed to understand the demands of the PPP process in terms of providing adequate internal resources, and that as a result significantly under-resourced the in-house team that represented the Council as client in the relationship with the Consortium.
10.5.19 It is also clear to the Inquiry that Council officers were not satisfied that the process had optimised the opportunity for a higher overall design quality and acknowledged that insufficient focus and time had been allocated to this issue.