Stored in an overhead locker was Fraser’s briefcase containing an era-defining report that held the destiny and future reputations of some of Scotland’s most senior public figures in its 267 pages. It was the culmination of a year-long inquiry into the construction of the £431m Scottish parliament building at Holyrood, which had opened for business the previous week 10 times over budget and three years behind schedule — the country’s biggest public spending scandal.
Those on whom the report would pass judgment included Donald Dewar, the late first minister and the architect of devolution who had commissioned the building. His successor, Jack McConnell, the current first minister, also had cause to be apprehensive about the report’s assessment of his role in the affair.
Fraser, the former Tory lord advocate, had promised a rigorous and forensic investigation followed by a fearlessly honest assignment of blame. “If a whitewash was intended then the wrong person has been appointed,” he said at the beginning of the process last September. Yet when his report was finally unveiled to an expectant Scottish public last week, there was a sense of bewilderment and anticlimax. Fraser had not so much pulled his punches — he had failed to climb into the ring.
After six months of public testimony involving 69 witnesses and 13,366 documents submitted in evidence followed by months of private consideration, his conclusion was that nobody was to blame. Not the first minister who launched the project, not the finance minister who signed the cheques, not the MSPs who gave the orders, not the civil servants who carried them out, not the designers, builders and consultants who systematically drained the public purse of hundreds of millions of pounds. In Fraser’s learned opinion there was “no single villain of the piece”.
Yet in the days that followed questions have emerged about the inquiry, launched last year in the heat of an election campaign by the embattled McConnell. Principal among them is whether Fraser, a senior member of the Scottish establishment and a friend of Dewar for 20 years, was the right man for the job.
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This weekend, McConnell is sharpening his knives for the evisceration of an independent civil service he has long regarded as an impediment to his favoured style of government. His proposed reforms confirm the impression he is eager to convey that the system, rather than any single individual, was to blame for the scandal.
Yet a closer reading of the report presents a picture at odds with McConnell’s assessment and, indeed, with Fraser’s own comments as he launched his findings. Inconsistencies are ignored, arguments not developed and, where sufficient evidence is absent, questionable conclusions are reached which, almost universally, give the politicians the benefit of the doubt. Perhaps the most perplexing question of all is why, despite compelling evidence against them, Fraser failed to level even the blandest of criticism against Dewar and McConnell.
DEWAR once told friends there was not a single building in the past century of which Scotland could be truly proud. The opportunity to rectify that by commissioning a structure that would stand as an historic temple to devolution was, to a man like Dewar, the most enjoyable job imaginable. Henry McLeish, then a minister of state at the Scottish Office, suggested a delay so that final decisions on location and design could be left to MSPs, but Dewar rejected the idea out of hand. Once that fateful decision was made, the die was cast: if the new parliament was to be built while Dewar was still fully in control as Scottish secretary, it would have to be built fast. It was to be the first major error in a saga that would drag on into a new century and long after Dewar’s untimely death.
The tight timetable necessitated a procurement method which left all the risk with the client. If things went wrong, it would be the taxpayer, not the building contractors, who would be left to foot the bill.Haste was not the only misjudgment. Alternative sites were rejected simply because Dewar did not like them. He also seemed determined to appoint the mercurial Enric Miralles as architect, enthralled by the Spaniard’s talk of “the building growing from the land” and echoing the closes and tenements of Edinburgh’s Old Town. But behind the grand talk, Dewar was knee-deep in trouble, according to documents passed to the inquiry.
A memo from Barbara Doig, the project sponsor, warned Dewar of a serious problem with the costs on March 23, 1999, six weeks before the first Scottish parliament elections.
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The memo warned that an increase in the size of the parliament meant it was likely to cost £60m, excluding Vat and fees, to build, not the £50m the budget allowed.
The Vat and fees would take the cost to £107m and, crucially, if landscaping costs were included the true figure was estimated at up to £117m.
Dewar’s instinct and that of the Labour party machine was not to tell the public that the parliament was going to cost three times what they had been told ahead of the 1997 devolution referendum. Instead, the cost was to be hushed up until the Scottish election campaign, only to be revealed in June, when MSPs were to vote on whether to abandon the entire project.
Already concerned by the crucial memo, Dewar heard that the costs of the latest designs were being reviewed by Davis, Langdon & Everest, the project’s cost consultants, and would not be available until May. The strong likelihood was this would mean more rises. But Dewar kept quiet.
Noting that it was not considered appropriate to make public statements on costs going beyond the government’s existing position until that whole process had been completed, Fraser’s report states: “I am sure that this decision was wholly unrelated to the fact that the election campaign for the first Scottish parliamentary elections on May 6 was getting under way at that time.”
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Fraser has told The Sunday Times that this observation was “a heavy-handed piece of sarcasm”, suggesting he believes the costs were hushed up for political reasons. Why he felt unable to make such a serious charge explicitly in his report last week is unclear.
Yet the most blatant obfuscation was to come later and it is the clearest indication that Dewar misled parliament with the full knowledge of McConnell. On June 17, 1999, the Scottish parliament would debate Holyrood for the first time. With costs rising there was a growing groundswell in favour of scrapping the project and starting again. A fortnight before the vote Dewar and McConnell met to discuss the growing costs. A memo from Kenneth Thomson, Dewar’s private secretary, to Doig reveals how at the meeting the ministers agreed to make clear the scale of extra landscaping costs when presenting the revised costs of the building to parliament.
Another memo from Doig to McConnell, copied to Dewar, calculated the landscaping costs at up to £10m. Yet when it came to the vote Dewar and McConnell remained silent. Had the addidional cost been known, MSPs may well have concluded that it was an expense too far and abandoned the project. In the event a motion to continue was carried by three votes.
In his report, Fraser accepts that MSPs were not told about the landscaping costs, which later rose to £14m, at this critical juncture. “At the time of the critical debates, these costs were not to be included but, by the autumn of 2001, they were. Had I been an MSP alive to constituency concerns about ever-rising costs of the new parliament, I would have been spitting tacks that yet another £14m had been slipped under my nose with little or no notice,” Fraser states in his report.
The report acknowledges that Dewar and McConnell would have known the cost of the project was closer to £120m than the £109m put to MSPs. Fraser has since told The Sunday Times he believes Dewar may have been “disingenuous” about the extra costs but, in his book, being disingenuous in parliament appears to be different from misleading parliament.
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Perhaps more significantly, McConnell, the then finance minister, was also aware of the landscaping costs and remained silent about them.
If Dewar was, in Fraser’s view, “disingenuous”, McConnell was party to the concealment.
The report also made the surprising claim that, when McConnell and Dewar effectively approved an increase in the cost of the building at the meeting of June 2, they were not legally entitled to do so because responsibility for the project had already been passed to the parliament corporate body. If, as Fraser is prepared to accept, they did so unwittingly, it betrays an astonishing level of ignorance by Dewar, a qualified lawyer who drafted the Scotland Act, and McConnell, who was responsible for ensuring fiscal control of the project.
To date, McConnell has refused to accept any responsibility or to apologise for his role. Last March, McConnell was “invited” to give evidence to the inquiry but he declined and, instead, was allowed to submit a carefully worded letter which, Fraser concluded, answered all his questions.
McConnell’s letter touched on an important issue of the £27m of extra risks identified by cost consultants ahead of the June 17 vote. He stated that he had not seen the report but, like Dewar, he did not indicate whether he knew the gist of it or had any inkling that the true costs might be higher than MSPs were led to believe. Neither did McConnell explain, as Fraser would discover, why he agreed to increase the budget without legal basis.
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McConnell could also have been pressed on whether he concealed £10m of landscaping costs from the public, but his was to be the great escape.
Fraser also failed to ask why Dewar did not renegotiate the construction management contract after he found out the details. In a letter sent to the inquiry, Lord Elder, Dewar’s former special adviser, suggested Dewar did not want to embarrass the civil servants who had taken the decision.
This week, officials will begin work on clawing back money from the contractors who are set to make millions out of Holyrood. The process may yet result in legal action, but the most they can recover is less than 2% of the total cost.
It is now Fraser who is in the spotlight, over his willingness to give McConnell and Dewar the benefit of the doubt while denying it to officials.
“Fraser was part of the Scottish establishment as a former Loretto pupil, a former Tory minister who knew senior civil servants, and a Scottish lawyer,” said one analyst. “If there is one thing that we have learnt from inquiries like Hutton, Butler and Fraser, there is never a smoking gun.”
Additional reporting: Kenny Farquharson and Joanne Robertson
WHERE THE MONEY WENT
Ove Arup, consulting engineers: £11m
RMJM, architects: £5.4m
Bovis, contractors: £4m
Davis, Langdon & Everest, cost consultants: £3.8m
Enric Miralles Benedetta Tagliabue, architects: £2.4m
Design changes: £53m
Vat: £49m
Bomb-proofing: £21m
Site organisation: £17.5m
Landscaping: £14.2m
Bubble-shaped windows: £3.4m
Toilets: £2.4m
Reception desk: £88,000