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(HC 595 1993/94): Control of Prison Building Projects

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(HC 595 1993/94): Control of Prison Building Projects NATIONAL AUDIT OFFICE REPORTBY THE COMPTROLLERAND AUDITOR GENERAL Control of Prison Building Projects ORDEREDBY THE HOUSE OF COMMONS TO BE PRINTED 14 JULY 1994 LONDON : HMSO 595 Ea.95 NET CONTROL OF PRISON BUILDING PROTECTS This report has been prepared under Section 6 of the National Audit Act 1983 for presentation to the House of Commons in accordance with Section 9 of the Act. John Bourn National Audit Office Comptroller and Auditor General 8 July 1994 The Comptroller and Auditor General is the head of the National Audit Office employing some 800 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies: and he has statutory authorityto reportto Parliamenton the economy, efficiency and effectiveness with which departments and other bodies have used their resources. CONTROL OF PRISON BUILDING PROJECTS Contents Page Summary and conclusions 1 Part 1: Introduction 7 Part 2: New prison projects 12 Part 3: Projects at existing establishments 30 Appendices 1 Holme House 40 z Woodhill Prison 41 3 Lancaster Farms 42 4 Doncaster 43 5 Wormwood Scrubs 44 6 Manchester Prison 45 7 Parkhurst 47 8 Dartmoor redevelopment 48 CONTROL OF PRISON BUILDING PROTECTS Summary and conclusions 1 In 1980 the Prison Service embarked on a major prison building and modernisation programme: the greatest concerted effort to improve conditions and provide accommodation since the Victorian period. Twenty- one new prisons have since been built, providing 11,000 places at a cost of some El.2 billion. Moreover there has been extensive re-development and refurbishment work providing 7,500 additional new places at existing prisons and an increase in 24 hour access to sanitation from 46 per cent in 1981 to 90 per cent in February 1994. In 1993-94 expenditure on existing prisons will cost around f189 million. 2 Until 1 April 1988 the construction of all new prisons was both managed and funded by the Property Services Agency to a brief provided by the Prison Service. From that date the Prison Service has not been tied to the Agency and it meets the cost of new prisons from the Prisons budget. 3 The National Audit Office examined the Prison Service’s supervision and control of prison building projects based on a detailed analysis of twenty- three projects: seven new prisons and sixteen major refurbishments at existing prisons. The examination was carried out between January and June 1993. The main findings are set out below, linked with suggestions for further action. On new prisons (a) The seven projects examined by the National Audit Office cost in all E542 million, of which E475 million was spent on construction. Expenditure on construction exceeded the estimated costs at tender stage by E78.9 million. Additional expenditure on individual projects was between CO.2 million and E24.4 million There have been delays in design and construction, but overall the average time taken to build a prison has fallen from seven years in the period before 1991-92 to four years subsequently (paragraphs 2.2 and 2.3). (b) Investment appraisals were carried out for each of the projects, but none met Treasury requirements in full. On timing for example, two projects were appraised when key decisions as to site, planning permission, design and size of prison had already been made. With two exceptions, the appraisal documents gave insufficient information on the prisons required. And in most cases it was unclear how the proposals related to the Prison Service’s future plans for the number of prison places, the types of prison needed and their location. The quality of recent appraisals has improved, however, and Treasury guidance is more closely followed. The Prison Service has pointed out that the options for the location of prisons were often limited because of the lack of alternative sites. Changes in the size and make-up of the prison population, the introduction of new security and control measures, and new thinking about the best location and structure of the estate, has led to a policy for 1 CONTROL OF PRISON BUILDING PROJECTS major new establishments of building multi-purpose Category B urban prisons. This has significantly reduced the risk of changes in type and role during the design, construction and subsequent lifetime of a prison (paragraphs 2.4 to 2.12). (cl Most new prisons which have opened since 1991 were built to one of two designs, with one design costing significantly more than the other. On average, the costs of the galleried wing style have been some .E38,000 per inmate place cheaper than the new generation design. But the latter are believed to offer better operational control and management, with savings in the numbers of staff needed, as well as important non- quantifiable advantages such as reducing tension. Moreover, the most recent new generation prison cost less per place than the average for the new galleried wing prisons (paragraphs 2.13 to 2.16). (d) On the projects examined, changes in design had led to additional costs. The main findings included non-compliance with the design brief, inadequate review of drawings by the project manager and client before construction, and inadequate co-ordination of drawings and specification between the individual professional disciplines. However, design development has to be seen in the context of the pressure to build new accommodation quickly and the efforts to introduce new, more efficient designs. The Prison Service has since taken steps to improve design briefing (paragraphs 2.19 to 2.22). (el Client changes have led to delay and added to costs. Some were necessary to improve security or to make prison operations more efficient. The need for these improvements could not always have been foreseen and sometimes emerged only after incidents at other prisons or following reports by the Prison Inspectorate. The Prison Building Board, which was established at the end of 1987, introduced rigorous change control as a matter of priority. And the Prison Service has recently tightened its procedures to ensure that changes are authorised at an appropriate level (paragraphs 2.23 to 2.26). (f) A Prison Design Briefing System was introduced in 1990 to produce greater consistency in prison design and thereby reduce the risk of expensive design changes and innovative ideas overlooking features essential to the effective management of an establishment. The system provided a template for the design of prisons as a whole and individual elements within it to reduce design periods. However, future new prisons will be constructed by means of a design, construct, manage, and finance strategy to ensure flexibility and scope for innovation (paragraphs 2.27 to 2.31). (g) The project sponsors and managers responsible for the successful execution of building projects have been overloaded with work. This has inevitably limited their involvement with each project and weakened the financial and management control exercised, thereby contributing to cost overruns and delays (paragraph 2.36). (h) Treasury guidance requires project execution plans for each project to be drawn up that set out the budgetary and managerial control procedures, the procurement strategy to be adopted, and the responsibilities of the project sponsor and project manager. However, the prison building 2 CONTROL OF PRISON BUILDING PROJECTS programme was launched before such plans were in general use. Until the Prison Service untied in 1988, the Property Services Agency provided control and reporting procedures (paragraphs 2.37 to 2.40). (i) The emphasis of the costing system used on prison projects was traditionally cost monitoring rather than cost control and some projects exceeded their budgets with inadequate forewarning. For a number of projects reporting and cost control were of a high standard. However, project sponsors were often presented with bulky and confusing cost reports, with insufficient information on cash flow and analysis of the causes of variations. The quality of reports has improved over the last eighteen months or so, as project managers tailor them to meet the needs of project sponsors (paragraphs 2.43 and 2.45). (j] Independent reviews or technical audits have been carried out on six new prisons, either during the later stages of construction or after the prison was completed. Though specific to each project, a number of common themes emerged, particularly the need for a strong management team to exercise firm control over consultants and any proposed khanges to requirements. The audits also identified the reasons for cost increases but some of them were carried out too late in the day for remedial action to be taken (paragraphs 2.46 and 2.47). On projects at existing establishments (k) For several projects there was considerable delay between design brief and contract letting, stretching to several years in some cases. The designs of many projects had to be revised because of changes required by new legislation or to increase security. And some projects were postponed for lack of funds, caused partly by overspending on other projects. In all of the fifteen projects examined by the National Audit Office for which the contract had been let, the final price exceeded the contract price by ten per cent or more. The Prison Building Board has stated that effective management of the prison programme is hampered by the constraints on the extent to which Government Departments can carry forward unspent funds from one year to another. This “annuality” constraint does not apply in the private sector (paragraphs 3.3 to 3.5 and 3.17). (11 The Prison Service needs to be involved at the pre-construction stage of projects. They operate effective procedures to develop and cost the initial brief to preliminary sketch plan stage; and this provides a good basis for the appointment of consultants to complete the design and act as supervising officer during the construction stage.
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