Two Options for Parliament Refurb Cost Up to £40 Billion

A new report examining whether the multibillion-pound refurbishment of the Palace of Westminster is likely to succeed has been released the National Audit Office (NAO).

The report comes at a critical moment for the programme, with parliamentary approval being sought to narrow down the options to two:

• Full decant: £11.1 – £15.6 billion, 19 to 24 years
• Enhanced Maintenance and Improvement plus (EMI+): £19.5 – £39.2 billion, 38 to 61 years

The Palace of Westminster, home to the UK Parliament, is a Grade I listed building within a UNESCO World Heritage site. It needs a lot of work to address serious risks, including failing mechanical and electrical systems, fire safety issues, and asbestos.

NAO says that the proposals provide MPs with enough information to make a decision, although the EMI options are “less developed and more uncertain”. But it warns that every year of delaying a decision could add between £320 million and £420 million to the overall cost of the work. Currently, £1.5 million is being spent every week to keep the Palace of Westminster open. This figure is forecast to rise to £2 million every week the decision is delayed beyond this year.

Phased Approach

The NAO is recommending that Parliament approves an initial 7-year phase capped at £3 billion, focusing on reducing immediate risks. The NAO says this phased approach is ‘sensible’ as it allows enabling work to progress while managing risks. However, it cautions that plans for how the works will be overseen and delivered still need to be finalised.

The report recommends that all cost estimates for Phase One work packages should be published and should set out how interdependencies between key projects will be managed.

At the heart of the decision is the question of where parliamentary staff should go while the work is done. Plans include proposals for the House of Lords to decant to the Queen Elizabeth II Conference Centre owned by the Ministry of Housing. The House of Commons could then move into the House of Lords or could fully decant and several options have been suggested but not agreed. All programme options depend on accommodation being available.

The NAO also raises concerns around governance, accountability and programme integration and says stronger controls will be required. The watchdog recommends establishing a single integrated delivery plan that clearly sets out project interdependencies and decision-making responsibilities.

Key Recommendations for Success

To put the Programme on a stronger footing, the NAO recommends that the delivery teams:

• Publish and regularly update a clear, non-technical summary, potentially alongside its business case, akin to Strategy and Delivery Plans used for mega-projects.
• Provide cost estimate ranges for all phase one packages and set out how interdependencies between key projects will be managed.
• Ensure that decisions on the Parliamentary estate are managed through a single, integrated delivery plan.
• Work with MPs and Lords at speed to create a clear vision for how each House, and Parliament as a whole, will operate in their temporary accommodation.
• Review the Programme’s governance arrangements to set clear requirements and hold those delivering to account.

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