A damning report has laid bare persistent failings at the V&A at Dundee.
The McClelland inquiry lists a catalogue of gross mismanagement going back as far 2011.
He has revealed the startling admission that there was no cost or project manager employed – leaving the hugely ambitious development doomed to spiral out of control.
And he slammed planners for picking an “elite” building design having budgeted to do the project on the cheap.
Mr McClelland believes that from the outset Kengo Kuma’s design could not be afforded.
He has criticised Dundee City Council for not adjusting costs in light of their choice – and has demanded they make widespread changes to ensure such costly mistakes are never repeated.
The report made the following 15 conclusions:
CONCLUSION A: There was a mismatch between the lower aspirations for the building’s design on which the £27 million budget was based and the elite level of the design implied in the competition brief and eventually selected by the Panel.
CONCLUSION B: The target cost set for the building also incorporated the risk that the cost of having it offshore would be difficult to cover within the budget even after adding a £4 million contribution from the Waterfront Budget.
CONCLUSION C: There was insufficient investment in providing external professional support to the project particularly in its early stages. In the case of the Judging Panel, the depth of independent technical investigation and analysis of the six cost estimates, particularly in relation to the cost of their design concepts and complexity, could have been deeper and more extensive. This is, of course, especially appropriate to the winning design.
CONCLUSION D: The depth of scrutiny able to be exercised by the Judging Panel in selecting the winning bid and understanding whether its design could be delivered within the estimated costs is difficult to assess due to incomplete records. For the same reason there is a lack of clarity about the information and briefing they were provided with, including on the rationale used in developing the original budget, the depth of independent adviser investigation of the bids and the adviser’s concerns about the achievability of the winning bid. However, leaving aside how well supported and informed it was, the Panel’s process led to the selection of a winning bid that proposed an elite building, built over water, and estimated to be delivered at a cost per square metre which was 11% less than their own budget which was originally set on an aspiration for a building that would be of high quality rather than elite.
CONCLUSION E: The original Architectural Competition Bid Cost Estimate and, as a consequence, the Dundee City Council Budget of June 2011 were both understated. In particular, at that stage the level of development of the winning design did not allow full account to be taken in cost estimates of the complexity of the structure and within that was especially short in providing for the temporary works costs associated with actually building the design’s extraordinary Superstructure. It also did not provide fully for the cost of building over water and this resulted in the building being relocated onshore thus sacrificing a key feature of the Competition Brief and the Design Competition.
CONCLUSION F: It took time to identify all of the inherent upward cost pressures within the original estimate. Their materialisation in a series of different Cost Plan episodes, followed by value engineering redesigns over a three year time span, caused delays and disruption to the programme.
CONCLUSION G: The design development issues and design changes were almost completely driven by the complexity of the design and in particular the challenges associated with its “buildability”. Client changes to the original design caused a relatively small part of the increase in cost. In fact these changes were more than offset by the results of “client compromise” in forfeiting the offshore feature of the original design and in agreeing on two occasions to reduce its height.
CONCLUSION H: It is likely that general construction industry inflation was not fully provided for in the June 2011 budget. However, when inflation is recalculated using current higher indices and recognising the 3 year programme delay described above, the additional inflation impact is £6.35 million.
CONCLUSION I: The largest single cause of the increase of £31.1 million in the budget for Dundee’s V&A Museum of Design was an understatement of the original budget.
CONCLUSION J: The administrative procedures pursued and governance exercised by DDL were generally competent. This was particularly the case from early 2011 onwards when its structures were considerably strengthened with new committees and the engagement of externally contracted support. However in 2010, at the time of the Architectural Competition and its Judging Panel, there could have been more rigorous recording and information reporting.
CONCLUSION K: There has been an under-investment in skilled and experienced in-house technical and project management resources for this project. Although the use of externally contracted support has added value and capability, that type of full time assistance came only in March 2011. It is primarily a project management role and one that has proved crucial to the project to date. However neither at DDL nor at Dundee City Council has there been a building project manager involved full time and fully accountable for this project and only this project.
CONCLUSION L: There has been no continuous ongoing Quantity Surveyor or Cost Manager for the project, meaning no independent day by day monitoring of the cost estimating and other financial work of the Design Team. Although the extension of the external project management contract to include cost management services added value, their engagement was “on call” and they were not in place until the end of 2011 with their first report in January 2012
CONCLUSION M: Dundee City Council continued to treat the V&A project as an external partnership venture and did not integrate it into the normal work of the Council in the same way as other construction projects. As a result not only was there no single accountable project manager within the Council but the project did not benefit from access to and support from the full range of professional services such as quantity surveying and financial management. There was also ambiguity about responsibility and accountability for the building project between DDL and Dundee City Council and the intended Development Agreement setting out the terms of the relationship was not formalised. CONCLUSION N: Within Dundee City Council there was no central project file and all day to day governance, monitoring and regular reporting of status took place within DDL and not the Council. However when formal approvals or notifications were strictly required these were referred to appropriate Committees.
CONCLUSION O: EU procurement rules were followed both in the case of the Architectural Competition and the Construction Tender. The Council’s Procurement section was appropriately involved in the Construction Tender OJEU process but not the earlier process for the Architectural Competition. At that time there was not a central procurement function within Dundee City Council. Not only is this team now well established but its staffing includes expertise in construction projects.
See more in Saturday’s edition of The Courier.