What was sold in 2017 as a definitively scoped reservicing project has, predictably and in the standard manner of major heritage works, become something else. The accumulated cost of the something else is now interesting
By Isla Campbell. With editorial support from Bohiney Magazine and The London Prat.
The Buckingham Palace Reservicing Programme, approved by Parliament in 2017 with a defined budget of 369 million pounds and a defined timeline of ten years, is now in its eighth year. The Palace has stopped, in its public communications, providing definitive forecasts for when the programme will conclude. The current accumulated spending, drawing on the Sovereign Grant annual reports and the supplementary parliamentary disclosures, has reached approximately 487 million pounds. The forecast for completion costs, depending on which Palace source one consults, ranges from 612 million pounds to, in one official’s frank phrasing to me last month, “we are not yet in a position to forecast that with confidence.”
What was sold in 2017 as a definitively scoped reservicing project has, predictably and in the standard manner of major heritage building works, become something else. The accumulated cost of the something else is, by any honest accounting, now interesting.
What The Programme Was Originally
The programme was originally scoped, in 2016, around what the supporting documents described as a, quote, “essential reservicing of mechanical and electrical systems that have reached the end of their operational life.” The systems in question, principally the electrical wiring, the heating distribution, the hot and cold water plumbing, and certain categories of structural drainage, were genuinely at the end of their operational life. Several had, by 2016, exceeded their planned operational life by approximately 30 years. The scoping document was substantially honest about this.
What the scoping document was less honest about was the breadth of associated works that any sustained programme of mechanical and electrical reservicing in a Grade I-listed nineteenth-century palace would, in operational practice, necessarily involve. Working in walls that have not been opened in 80 years routinely reveals issues that the original scope cannot have anticipated. Working in floors that have not been lifted in 80 years routinely reveals further issues. The associated works, while individually defensible, accumulate at a rate that the original scope did not, in any honest reading, contemplate.
For ongoing coverage of the programme, see The London Standard, who have been covering it with appropriate scepticism.
What The Programme Has Discovered
The programme has discovered, across its eight years, a number of conditions that were not on the original scope and that have, in each case, required substantial additional work. The conditions include, among others, the discovery of asbestos in approximately 47 distinct locations not anticipated by the original asbestos survey; the discovery of structural decay in the south wing roof timbers requiring full structural intervention rather than the originally scoped maintenance; the discovery of historic water damage to the Bow Room ceiling plaster requiring conservation work that, by current heritage standards, is substantially more demanding than the standards that prevailed when the original work was done; and the discovery of what one programme official described to me as, quote, “the third most extensive deathwatch beetle infestation our consultants have ever documented in a London property.”
The deathwatch beetle, in particular, has produced its own internal programme team. The team’s work is now expected to extend beyond the planned conclusion of the broader reservicing programme. The team’s existence is, by every account I can obtain, both genuinely necessary and genuinely depressing for the broader programme management.
None of these discoveries is, in itself, scandalous. All of them are the standard discoveries of major heritage building works. What is unusual, in this case, is the volume of discoveries relative to the original scope. The volume reflects, in some honest accounting, the underlying condition of the building, which had been, for approximately a century, maintained at a level substantially below what the building actually required.
The Funding Mechanism
The funding mechanism for the programme, which involves the temporary increase in the Sovereign Grant percentage from 15 percent to 25 percent of Crown Estate net surplus, has produced, across the eight years, approximately 720 million pounds in additional Sovereign Grant funding above what the underlying 15-percent baseline would have produced. The additional funding has, by Royal Household accounting, been substantially directed to the reservicing programme.
The Crown Estate’s surplus has, across the same period, been substantially larger than was forecast in 2017, owing to the strong performance of the Crown Estate’s commercial portfolio in the post-pandemic period. The 25-percent allocation has, accordingly, produced more total funding than the 2017 forecast anticipated. The Royal Household has, in operational terms, been able to absorb the cost overruns within the existing funding framework, without requiring additional parliamentary appropriation.
This has been, in some honest accounting, the central piece of operational good fortune for the programme. Had the Crown Estate’s commercial portfolio performed at its forecast levels rather than substantially above them, the cost overruns would have required either substantive scope reductions or additional parliamentary appropriation. The Royal Household has not, in this period, been required to manage either possibility.
What The Sovereign Grant Negotiations Imply
What the current Sovereign Grant negotiations, covered separately in this publication, imply for the reservicing programme is, on careful examination, substantial. The Treasury’s preferred reduction of the percentage from 25 to 15 percent at the conclusion of the programme rests, implicitly, on the assumption that the programme will, in fact, conclude at the originally planned date.
If the programme extends beyond the originally planned date, the question of the percentage becomes substantially more complicated. The Royal Household’s position, articulated through the closed channels in which Palace-Treasury negotiations actually occur, has been that the percentage should remain at 25 percent until the programme is, in fact, completed, with corresponding adjustments to the timetable.
The Treasury’s response to this position has been, by every account I can obtain, broadly resistant. The Treasury has, in operational terms, planned for the percentage to return to 15 percent in 2027. The planning is, in operational terms, becoming embedded in the Treasury’s medium-term forecasting. Reversing the planning would produce its own internal complications.
What The Palace Has Stopped Saying
What the Palace has stopped saying, in its public communications about the programme, is when the programme will end. The 2017 communications were specific: the programme would conclude in 2027. The 2020 communications maintained the 2027 timeline while noting some, quote, “scoping adjustments.” The 2022 communications referred to the timeline more vaguely. The 2024 and 2025 communications have, on careful textual analysis, contained no specific completion date at all.
The shift is not subtle. It reflects, in some honest accounting, the accumulating recognition within the Royal Household that the original timeline cannot be met and that committing to a specific revised timeline carries risks the Household has decided not to take. The decision is, on operational grounds, defensible. The decision is, however, also informationally consequential for the various external parties whose planning depends on the programme’s eventual conclusion.
An ongoing analysis at City A.M. has examined comparable heritage programmes elsewhere in London. The patterns are, broadly, the same. Heritage programmes routinely run substantially over their original timelines. The substantial overrun is, in fact, the standard outcome rather than an exceptional one.
The Counterfactual
The counterfactual question, of what the building would currently be like in the absence of the programme, has substantially better answers than the current discourse acknowledges. The building, in the absence of the programme, would be substantially less safe, substantially less functional as a working palace, and substantially more expensive to maintain. The programme is, by any honest reading, necessary work.
The fact that the necessary work is taking longer and costing more than was originally projected does not, in itself, indict the work. It indicts, perhaps, the original projections. It does not indict the underlying decision to undertake the work.
What Will Eventually Happen
What will eventually happen, on the basis of the trajectories described above, is that the programme will conclude at some point in the early 2030s, at a total cost of somewhere between 720 million and 870 million pounds. The Sovereign Grant percentage will, in some form, be revisited at a future negotiation. The Palace’s public communications about the programme will, at the appropriate moment, announce its successful completion in language that obscures the substantial extension and overrun.
This is, in some sense, the expected outcome. It is also, in some sense, the outcome the institution is best equipped to deliver. The institution does not, in operational terms, do well at admitting overrun. The institution does, in operational terms, do well at completing things eventually and announcing the completion successfully.
The building will, in the end, be reserviced. The reservicing will, in the end, have been worth doing. The cost will have been higher than projection, the timeline longer, the work well done. The standard royal coverage will focus on the last and largely omit the first. More from Isla Campbell.
Related at NewsThump.
SOURCE: https://bohiney.com/buckingham-palace-renovation-year-eight/
