Structural damage and the discovery of asbestos at Buckingham Palace “could have been foreseen”, a report has said, after they led to cost increases in the £369m project to update the royal residence.
The renovation work on the King’s official London residence was launched in 2017 to update the plumbing, pipes, wires and heating, some of which dates back to the 1940s and 1950s.
On Tuesday, a report by the National Audit Office (NAO) – which evaluated the project’s value for money – said the programme has been “well managed” so far, but certain challenges such as asbestos and structural damage had led to a jump in cost.
The NAO said the East Wing of the palace was 78% over its estimated cost, but other projects such as the picture gallery and the roof came in 25% under the forecasted costs.
“Some of the reasons for cost increases and delays were outside the household’s control, for example COVID-19, variable inflation, and supply chain difficulties,” the report says.
“Other challenges, such as the discovery of more asbestos and structural damage than expected – common in heritage programmes – could have been foreseen.”
Detailed planning for renovations began seven years ago after some 3,000 Royal Collection items, including priceless paintings and decorative works of art, were moved to allow the work to begin.
Essential works are being funded by an uplift to the Sovereign Grant – paid annually to the monarch by the Treasury to fund official duties.
At the end of March this year, the project’s net expenditure was £238.9m – 65% of the budget – with essential works on the West Wing and main works in the North and South wings set to be completed in the last two years.
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The NAO warned there is limited remaining unallocated contingency – money set aside to cover uncertain costs of a project – to deal with unknown risks without reducing what is delivered.
The report said “risks remain” to the overall value for money of the programme but if it continues to manage risks effectively, it should set it up to deliver good value for money.
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Gareth Davies, head of the NAO, said: “Sound planning and project management has enabled the programme to remain within budget to date and respond well to challenges such as the pandemic.
“The household worked hard to engage stakeholders and the palace has remained operational throughout. There are plenty of important lessons here for heritage projects and those taking place in a live environment.”
