As highlighted in previous Derby News articles, the root cause of the cost overruns and delays was poor project management and inadequate resourcing; also it was unlikely that it was ever a £15m project. The concept was not substantiated by timely and accurate engineering detail.
The report highlights that the design and project management was channeled through one Derby City Council staff member, referred to as Officer D who stated:
‘The fact of the matter is the scheme was under funded from the start, the initial budget was far too small and the team was pressured into trying to deliver the impossible. The whole team worked tirelessly to try and get the scheme going and completed and as far as I was aware when I left the council the scheme was funded and progressing’
Not only was there pressure, but support staff numbers were inadequate. A former Director told the auditors:
“support structures around these projects do not appear to be there. The only support was from Legal and Accountancy and this waned and dipped … There was a lack of time and energy and not enough staff to do the day jobs let alone exceptional projects.”
This situation is best summed up by the comments of the former Director who told the Auditors:
“I have lots of regrets on this project, but I think it was due to [Officer D] trying to do everything on his own that caused a problem. I don’t know how this was allowed to happen, it doesn’t happen in any other projects. Where were his line managers in the project, I don’t know … Maybe I, and the other managers, should have asked more questions. [Officer D] didn’t offer up information voluntarily.”
The Audit report stated that the Strategic Director confirmed that she was not aware that Officer D was acting on his own, and identified that the former Director and Officer A had not apprised her of this. Officer A told us that
“after [Officer D] left it all unravelled. It was dubious whether [Officer D] knew things were going wrong but did not escalate.”
The Strategic Director further stated
“In hindsight there were never sufficient resources from an engineering perspective to deliver the project. That would be my take on it.”
Perhaps most telling of all is this quote from the former Director
“I certainly did not take an overview of the project from a Director’s perspective and I don’t think anyone above me did.”
and in terms of monitoring of the team
“Very little, unfortunately, that is where I feel culpable. Other than the IIB (Infrastructure Board) I had very little direct involvement.”
The Auditors asked the former Director about how he ensured that the project was progressing and that information flowed between relevant parties – he replied,
“Largely I didn’t….The only thing I would like to add is that I feel culpable in my role as Senior Manager as a lot of issues have been caused through lack of oversight. If I had my time again, there is more I could’ve done – monitoring project performance through the Infrastructure Board or through [Officer A] or others.”
In July 2018, a new Project Board was established and headed by the Strategic Director as it was recognised that inadequate governance arrangements were in place.
All of the drawing and design work for the Project was carried out in-house by Officer D. The Contractor was relying on the timely supply of drawings to allow for the project to proceed on time and to cost.
From the Audit report, Officer B stated that
“The NEC 3 contract enabled us to start without full designs. Contractors may have flagged to [Officer D] that designs were not progressing. This was not flagged to anyone else.”
The former Director stated that he
“was acutely aware when the commitment was made to hit the go button that elements of design still needed to be refined, but I was not aware of just how many detailed designs. In conversation with [Officer D], [Officer D had] set themselves timescales to ensure the contractor got the right information, [Officer D] had a plan when it would be done and I felt that Officer A and [Officer D] in particular, could meet those deadlines. It was not apparent at that time that there was no plan for completing this.”
The former Director advised us that
“I was told that delays in designs were increasingly becoming a project risk and would have a significant impact. … It was only February time (2018) I started to recognise just how far away we were in getting detailed designs to the contractor. I assumed we were much further forward.”
Galliford Try were engaged to be part of the Early Contractor Involvement phase. This should have allowed detailed target costs to have been calculated much sooner in the project. Estimates were produced but their representative explained:
“based on assumptions and guestimates … and … We gave input and advice, detailed lighting, etc. but this assumes basic fundamental information was available – this wasn’t the case with this scheme, the detail wasn’t there.”
“There were lots of gaps and no works information…Large amounts of information were missing, so we made assumptions…looking back we were 6-12 months away from starting, but there was political pressure to get the scheme started…For the advance works we didn’t get a full package – it was drip fed to allow us to continue with it.”
“The information came in a piecemeal way. On a job like this, it’s usually minimum 95% designed at the point it is target costed, otherwise there is a risk. A lot of information was not in there. Large sections of work were removed from scope.”
How much information was there:
“Around 60% I would say, certainly no more than 60%” confirmed the Contractor’s representative.
The 136 page report contains a lot of detail. The key points are highlighted above which meant that the Project had zero chance of a successful outcome from Day 1. Good practice would dictate a well organised, and resourced, project team, managed by competent professionals, with the oversight of all levels of senior management, and constant, and effective communications.
None of this was in place.
Although Officer D seems to bear most of the brunt of the “blame” for this project’s failure; in my opinion that person is more like the victim. The Officer was poorly supported from all directions within the Council, under pressure to save costs and deliver on time but, unfortunately, their endeavours had the opposite effect.
We can only assume that the lessons have already been learnt and, certainly a new Governance structure was put in place, in July 2018 for this Project. The Council should have the strength of its convictions and not proceed with any other project, regardless of political imperative, until all of the resources, and organisational structures are in place.
The Council can’t afford another £30m overspend!
The Chief Exec’s summary concludes:
“Overall, the project is an example of ‘what could go wrong did go wrong’. There have been comprehensive failings and weaknesses over a long period of time.”
From the Chief Exec’s summary:
“There are four current colleagues who, as a result of the findings of the report, are subject to separate employment related investigations. These are already underway and must run their course. There would have been a similar process applied to some former colleagues had they still been in the Council’s employment.”