Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 40-59)



  40. The seepage or leakage of water down below where we are now.
  (Mr Makepeace) In the courtyard?

  41. Yes, in the courtyard. There was allegedly a seepage of water from that into the storerooms or the office accommodation of the library underneath, is that true?
  (Mr Makepeace) There is nothing underneath but the underground station.

  42. Then what about the story that there were rats on one occasion? Is that valid, or is that another piece of misrepresentation?
  (Mr Webber) Chairman, in this part of London there are rats very widely distributed—

  43. I am only concentrating on the four-legged variety! That reduces your problem entirely. Sorry, go on. I have an occasional, friendly mouse who wanders into my room in the old part of the House of Commons, but rats seem to be not a normal feature.
  (Mr Webber) They are a normal feature of the streets, sewers, rivers, underground railways of London, Chairman. They occur from time to time around the periphery of the parliamentary estate. There is baiting and regular procedures to deal with them but they are a fact of life and they have to be dealt with.

  44. There is no way of keeping them out of the new building?
  (Mr Webber) Every possible step is taken to control them but occasionally there will inevitably be intrusions.

  45. Switching completely, if we turn to page 5 we have Table 1 which gives the figures at different stages at constant prices, so inflation is taken out, and in fact they do not include two sets of figures which the National Audit Office gave us. If you can imagine two columns in advance of the left hand column, which is February 1993, we are told by the National Audit Office that in June 1991 the estimate based on the initial brief was 57 million but nine months later in March 1992 it had doubled to 114 million. How had it doubled in so short a time? So imagine two columns to the left, it has not just changed from 154 to 187, it has actually changed from 57 in June 1991 to 187, which is a rather more dramatic change, is it not?
  (Sir William McKay) Indeed, Chairman. I think part of the answer is that at that point it was not the House but the Department of the Environment which was on watch, and it is difficult for us to reach back and justify the decisions which they took.

  46. That is rather awkward for us as a Committee of Public Accounts because, of course, whoever appears before us assumes responsibility for the whole project. According to the figures provided by the National Audit Office it went up from 57 to 114 and then it went to 154, then more optimistically in May 1993, the second column in that diagram, it showed the most likely cost was going to be 151 million. Why then did it increase quite dramatically in real terms above the most likely cost by 36 million in the next column?
  (Sir William McKay) Chairman, I think the figure the House agreed to was 154 million. The decline to 151 million was an unexpected, but welcome, effect of building price inflation or, in this case, the opposite.

  47. These are constant figures, of course, inflation is extracted from all of these figures, otherwise they would all be substantially larger.
  (Sir William McKay) Chairman, the answer lies in the footnote. "When approving the project, the ... Commission was advised . . . that the most likely cost ...would be 151 million . . .". The figures preceding that were doubtless arrived at before the final sketch plan was agreed, before January 1993.

  48. The second column there is May 1993, so that is after the final sketch plan. My time has run out but if you can just address this issue: why, after the final sketch plan, having worked on a figure which here is given as 151 million, did you eventually increase by another 36 million?
  (Mr Webber) I may be able to help on this point, Chairman. As a consequence of an exchange with the Treasury, I believe it was, the House of Commons Commission at that point took a decision to take out provision for works of art in the building and to take out a provision for certain bathrooms.

  49. Bathrooms?
  (Mr Webber) Bathrooms.

  Mr Williams: Thank you, Chairman.

Mr Gardiner

  50. Sir William, many of us on this Committee are sitting here unusually in a position of fear and trepidation because we know on the floor of the House of Commons our fate relies on you somewhere, but I will try and be undeterred in the vigour of my questioning. Can I take you back to what the Chairman began by asking you about and that is the Harmon case. In response to questioning from our Chairman you said that the part of the judgment he referred to came to us as a considerable surprise, that was misfeasance in public office.
  (Sir William McKay) Yes.

  51. That struck me as a very odd statement for you to have made, because of course you have signed up to a report that says that you were guilty of misfeasance in public office because it had been obvious to officials when awarding the contract to Seele/Alvis that to do so would not comply with European law and the public works regulations. It was obvious to you, the court found that it was obvious to you and you have signed up to it, so how is it that you say to our Chairman that came to you as a considerable surprise?
  (Sir William McKay) The surprise, Chairman, was based on this. We regarded the unfair treatment, as the court found, of Harmon as an unfortunate but undeniable error; an error. Misfeasance in public office imports a good deal more than simple error but rather a settled intention to exercise one's official authority wrongly. We did not have that collectively, and it is my view that those who were taking the decision did not have it individually, but that was the court's decision. They are the court and we respect it.

  52. As a fellow Scot and I know you are a Scottish lawyer—
  (Sir William McKay) I am not.

  53. Then I am sure as a fellow Scot we at least share our respect for the Scottish legal system over the English one, but I would not have thought it would have extended to denying before this Committee what the court, the judge in the High Court, established and found to be the case. That is that not just that an error had been committed, what the judge found was—and I refer you to the page, page 56, section 4, sub-section 5—". . . it had been obvious to officials when awarding the contract ... that to do so would not comply with European Union law . . .", this was not just an error in the view of the courts, it was a quite deliberate act that was obvious to you.
  (Sir William McKay) Indeed, I respect the court's judgment, I just do not agree with it.

  54. Thank you, Sir William. Mr Makepeace, does the same apply to you?
  (Mr Makepeace) Pardon, Sir?

  55. Does the same apply to you, that you respect the court's judgment but do not agree with it?
  (Mr Makepeace) I disagree with it totally, but I have to respect its judgment.

  56. So when you inform this Committee that there had been no policy of buying British—
  (Mr Makepeace) Correct.

  57.—you disagree with what the judge in the High Court found to be the case, namely that by encouraging or permitting to continue a policy of buying British, you materially affected the tendering procedure?
  (Mr Makepeace) I did not assume a buy British policy. I understand and respect that the judge found differently, but I know I did not do so.

  58. I find it staggering, Chairman, that before this Committee we are having the decision that was reached in the court challenged in this way. Can I ask you, Sir William, was an appeal entered into?
  (Sir William McKay) Yes. First of all, Chairman, I do not challenge the court's decision, I respect it. It was delivered. We live with it. However uncomfortable it may be, we live with it. Was an appeal considered? Yes indeed. The first appeal which was considered by the Commission was the possibility of an appeal against the decision on liability. The legal advice was that such an appeal would not succeed. It would amount to a retrial. Moving from liability to quantum, the second appeal was against the interim costs order, and leave was given to appeal. However, at that time we were also very conscious that had we pursued the litigation to the end, it was at least conceivable that if we won and scooped the pool there would have been no pool to scoop, because Harmon was in liquidation. So the Commission decided, having received leave to appeal the interim costs order, to recommence settlement negotiations, which in the end came to fruition in the sense that we settled out of court.

  59. For 10 million?
  (Sir William McKay) For 5.26 million.


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