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Independent Options Appraisal Final Report Volume 1

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Independent Options Appraisal Final Report Volume 1 Palace of Westminster Restoration and Renewal Programme Independent Options Appraisal Final Report Volume 1 This final report (the “Final Report”) has been prepared by Deloitte LLP (“Deloitte”) for The Corporate Officer of the House of Lords and Corporate Officer of the House of Commons (Acting Jointly) in accordance with the contract with them dated 23rd December 2013 (“the Contract”) and on the basis of the scope and limitations set out below. No party other than The Corporate Officer of the House of Lords and Corporate Officer of the House of Commons (Acting Jointly) is entitled to rely on the Final Report for any purpose whatsoever and Deloitte LLP accepts no responsibility or liability or duty of care to any third party. The Final Report has been prepared solely for the purposes of satisfying the ‘Core Objective’ of the Independent Options Appraisal as set out in the Contract i.e.: ‘an independently produced costed options appraisal of the Scenarios, in order to enable Parliament to reach a well-founded decision in principle on the means of restoring and renewing the Palace of Westminster while maintaining business continuity.’ 8 September 2014 Contents page Volume 1: Contents page 1. Executive summary 3 2. Glossary 28 3. Introduction and approach 34 4. Evaluation and comparison 60 5. Key themes 112 6. Scenario booklets 168 Volume 2: Appendices A-E Volume 3: Appendices F and G 2 of 250 Palace of Westminster – Restoration and Renewal Programme Palace of Westminster – Restoration and Renewal Programme – Final ReportFinal – 08 Report September – 08 September 2014 2014 1. Executive summary 1.1 Introduction 1 4 1.2 Outcome Levels 2 6 1.3 Delivery Options 3 7 1.4 Shortlisted Scenarios: Overview and key metrics 4 10 1.5 Shortlisted Scenarios: Focus on schedule 6 16 1.6 Shortlisted Scenarios: Focus on cost 7 18 1.7 Scenario evaluation: Evaluation Criteria 8 20 1.8 Scenario evaluation: Illustrative analysis 9 22 1.9 Conclusions drawn from the IOA 10 24 1.10 Next steps 26 Palace of Westminster – Restoration and Renewal Programme – Final Report – 08 September 2014 1.1 Introduction The Strategic Case for the Programme reflects the need to address the current condition of the Palace, asset risks such as fire and flood, security threats, the need to improve accommodation and to protect image and reputation. The Restoration and Renewal Programme – The strategic case • The current PoW was re-built over a 30 year period following a fire in 1834, which destroyed most of the estate. Since the post war era, the PoW has not undergone any major restoration or renewal. The strategic case for change (as recorded in the Preliminary Strategic Business Case of Oct 2012) is as follows: • Condition and risk – ‘The PoW is reaching the point where its condition is deteriorating, risks are growing and partial patching and mending interventions are no longer sufficient. Fundamental renovation can no longer be avoided.’ • Asset protection – ‘A fundamental requirement is for the PoW to remain safe from fire (which destroyed its predecessor), water damage, security threats, decay and dilapidation. This is the overwhelming driver for modernisation.’ • Decent standards of accommodation – ‘As a working institution, “Parliament in the PoW” has to provide decent standards of accommodation for all those who work within it, or visit as citizens, as school children on educational trips or as witnesses to Parliamentary business, and the building has to support the modern ways in which Parliaments work with informal as well as formal meetings, digital information and mobile devices.’ • UK brand and reputational image – ‘As a visitor attraction, whether for UK or international tourists, enthusiasts for democracy or specialists in the Victorian and medieval heritage, the PoW is part of the UK brand, instantly recognised and appreciated around the world.’ • Difficulty of combining renovation with ongoing occupation – ‘This (2012) study has reviewed the context in which the PoW was created and the way in which its use as the home of the UK Parliament has evolved. It has also reviewed the current condition of the PoW and the backlog of maintenance work that has built up over a long period of time, in part because of the way in which the PoW has been managed, but above all because of the great difficulty of carrying out fundamental renovation work on the inside of the PoW while Parliament remains in continuous occupation.’ The Programme Objectives • In response to the Strategic Case, the Programme Board endorsed (February 2014) five Programme Objectives for the Programme, which are summarised in the table below. Table E1: Programme Objectives Programme Objectives 1) Allow the business of Parliament to continue uninterrupted, mitigate any adverse operational impact, and reduce risk over the longer term 2) Accommodate the needs of a 21st Century Parliament 3) Address existing building structure, fabric and service issues 4) Preserve and protect the PoW’s status as a Grade I listed building and a UNESCO World Heritage Site (for the foreseeable future) 5) Deliver value for money for the taxpayer, generating a range of economic benefits Source: IOA Team analysis Independent Options Appraisal • The core objective of the Independent Options Appraisal is for the Consultant to deliver to the Client an independently produced, costed, options appraisal of the Scenarios, in order to enable Parliament to reach a well founded decision in principle on the means of restoring and renewing the PoW, whilst maintaining business continuity; and to pave the way for an outline business case (OBC) that conforms to public sector good practice as set out in the HM Treasury Green Book. Important assumptions • Full details of the assumptions used for the IOA can be found within Volume 2 Appendix E.7 of this Final Report. Four of the most important assumptions are summarised below: • The strategic case for change, as set out in the ‘Pre feasibility study and Preliminary Strategic Business Case’ dated October 2012 is based upon a potential scope of work defined by the Client ProgrammeTeam and not by the Independent Options Appraisal team; • The scope associated with each Outcome Level of the programme works has been derived from Client consultation and documentation. The IOA team supported the reconfiguration of Outcome Levels A-C, which have been agreed by the Programme Board; • The assumed start date of the construction works is Q2 2020. Our financial, and schedule metrics are based on this date, however if this commencement date is not realised (i.e. delays occur), our analysis and outputs will need rebasing; and • All Scenarios have been financially analysed and compared over a 60 year period as per HMT Green Book Guidance, with a fixed commencement date of Q2 2014 4 of 250 Palace of Westminster – Restoration and Renewal Programme 1. Executive summary | 1.1 Introduction Final Report – 08 September 2014 1.1 Introduction The Strategic Case for the Programme reflects the need to address the current condition of the Palace, asset risks such as fire and flood, security threats, the need to improve accommodation and to protect image and reputation. Comparative scale • The PoW is an intensely used ornate Victorian heritage, UNESCO World Heritage, Grade I listed building located in central London. There are no other single built assets offering direct comparisons. However, in order to obtain a sense of comparable scale, elemental comparisons can be extracted from the British Museum and the Ministry of Defence Main Building as both are of similar size and listed building status to the PoW. The British Museum includes a mixture of public and private areas and is a focal point for UK. It also provides visitor tours and educational outreach similar to that of the PoW. Other facilities with a comparable internal floor area to the PoW include the HSBC tower in Canary Wharf (i.e. 100,000 sq. m, albeit on 46 levels).A more detailed comparison matrix can be found within section three (Volume one) of the main body of the report. IOA Scenarios • The IOA adopts a Scenario based approach to analysis. The Scenarios are a product of (a) a potential Programme Outcome Level (driven by delivered scope and specification) and (b) the potential delivery Option needed to meet the prescribed Outcome Level • Outcome Levels can be summarised as follows (Outcome Levels are cumulative): • Outcome Level A: Ensures compliance with legislation; maintain World Heritage and Grade 1 listing status; Repair or replace systems on a like for like basis to contemporary standards of design and quality, optimising costs and benefits over full system lifecycles. This outcome will meet built environment standards expected for public building; • Outcome Level B: As for A but additionally; Meets any additional built environment policy objectives stated by the Houses; Provide facilities to meet the stated objectives of both Houses (such as inclusion, outreach and education); Defined improvements to amenities within the constraints of the present design; Future proofing of infrastructure and provision for change to the current occupation where the requirement can be only loosely anticipated, over an indefinite period; and • Outcome Level C: As for A and B but additionally Significant defined improvements e.g. high performance and long life cycles appropriate to each system; Defined improvements to the amenities within the constraints of the present design. • Delivery Options can be summarised as follows: • Option 1 (enabled): A rolling programme of phased works over a significantly prolonged period of years but still working around the continued use of the PoW. Option 1 as originally defined could not meet the Programme Objectives. Key operational constraints were removed or reduced to generate an Enabled Option 1 (E1) for comparison purposes. This would include the adoption of longer Parliamentary recesses, over many years.
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