The Muir Russell Budget

In December 2009, Acton sent Muir Russell an email agreeing that Muir Russell would lead the inquiry. The language of the email is not definitive, but gives the impression that a budget of £ 40,000 was contemplated. (Excerpt below, see link for “full” agreement.)

As noted in correspondence on the earlier thread, Acton referred to an email sent earlier that day. David Holland sent a supplementary request for the earlier email (as it pertained to the contract). The University denied that it possessed the email.

Last month, Holland obtained the final cost of the Muir Russell inquiry – nearly £300,000.

While the increase in expenditures is paltry compared to Muir Russell’s oversight of Holyrood construction, which increased 10-fold from £40 million to £414 million, Muir Russell doesn’t seem to have lost his reverse Midas touch.

Muir Russell personally collected the amount that the university seems to have contemplated for the entire inquiry, but, as noted elsewhere, was not sufficiently interested to even attend the only two interviews with Jones and Briffa after the composition of the panel was announced in Feb 2010, leaving the interviews to Geoffrey Boulton, the most controversial participant on the panel.

64 Comments

  1. KnR
    Posted Feb 28, 2011 at 5:52 PM | Permalink | Reply

    10,000 for Travel !

    • Hoi Polloi
      Posted Feb 28, 2011 at 6:46 PM | Permalink | Reply

      I wonder what the carbon footprint was of that travel…

    • Hu McCulloch
      Posted Mar 1, 2011 at 3:24 PM | Permalink | Reply

      Having taken a cab from Heathrow into London this summer, I can believe BP9968 if the panel all rode in taxis to East Anglia and back.

      But what is the train fare?

      • mikep
        Posted Mar 1, 2011 at 5:40 PM | Permalink | Reply

        About the same unless they booked in advance!

  2. Steve McIntyre
    Posted Feb 28, 2011 at 5:59 PM | Permalink | Reply

    A report on Holyrood is characterized as follows:

    Civil servants, led by Sir Muir, chose a construction management contract without understanding what it meant.

    Sort of like statistical studies in climate science by the Team.

  3. mpaul
    Posted Feb 28, 2011 at 6:05 PM | Permalink | Reply

    The secretarial line item alone exceeded the entire original estimate! I guess it takes a lot longer to conduct an inquirey when you have to reverse engineer all the questions ahead of time.

    • Boro Nut
      Posted Feb 28, 2011 at 8:24 PM | Permalink | Reply

      “The secretarial line item alone exceeded the entire original estimate”
      Erm… We don’t know what the entire original estimate was, only that it was obviously a damn sight more than one single person’s fee.

      Not one of you could work that out. Not one of you brilliant inquiring minds. Not a peep. Oh dear.

      • Steeptown
        Posted Mar 1, 2011 at 2:16 AM | Permalink | Reply

        Oh yes we could.

    • DEEBEE
      Posted Feb 28, 2011 at 10:42 PM | Permalink | Reply

      Pretty high priced secretaries I must say.

  4. golf charley
    Posted Feb 28, 2011 at 6:12 PM | Permalink | Reply

    It’s not about the science, but lavish jobs for the boys.

    These people have to maximise their short term cashflow, because long term projections are not looking good.

    Their models still, forecast otherwise, of course.

  5. russep3
    Posted Feb 28, 2011 at 6:26 PM | Permalink | Reply

    “Secretariat Support”, that’s UK Parliamentary speak for ‘ex-gracia payment to wife and family’, and Legal advice may have come from ‘Sue, Grabbit & Run’, of ‘Private Eye’ fame.

    • nvw
      Posted Mar 1, 2011 at 3:42 PM | Permalink | Reply

      And NPR’s Car Talk legal advise is provided by “Dewie, Cheetum and Howe”

  6. Brandon Caswell
    Posted Feb 28, 2011 at 6:56 PM | Permalink | Reply

    I work in architecture here in Canada. Construction management has been a popular option for the last 10 years. In my experience it almost always serves one of a couple reasons:

    -Used to give a low first cost estimate, to get a project approved when the owner or board is concerned over cost.
    -Used to give a construction firm additional power over design and material choices to maximize profit.
    -Used by a construction group to avoid going to a full general construction tender. Mostly only subtrades are tendered and the tenders are handled by the manager/contractor and is ripe for abuse in giving contracts to “friends”.

    That is not to say it never works. There are several situations that it can work well for. But mostly it is used for the wrong reasons and makes things worse and not better. But when a contractor says “it is cheaper to build this way”, many times people just accept it without question, because it is the answer they wanted to hear. One can see the parallels to climate statistics.

    It is another case of the right tool for the job, and people who are suggesting it usually are doing it for personal reasons and not best fit to circumstances.

  7. mhummer
    Posted Feb 28, 2011 at 7:02 PM | Permalink | Reply

    Hi Steve,

    I think you mean “doesn’t seem to have lost his reverse Midas touch” instead of doesn’t seem to have last his reverse Midas touch.

    Thanks and keep up the great work.
    Hum

  8. Posted Feb 28, 2011 at 7:10 PM | Permalink | Reply

    Hotel prices in East Anglia must have gone up since their graduate courses in advanced idioting were offered.

  9. gober
    Posted Feb 28, 2011 at 7:35 PM | Permalink | Reply

    Wow, almost £300,000. Just imagine what the cost would have been if they had done the job properly.

  10. Posted Feb 28, 2011 at 7:51 PM | Permalink | Reply

    Wow, just friggin wow.

    I’m snipping the rest of my comments but spend at least to minutes at the holyrood construction link.

    • Ryan O
      Posted Feb 28, 2011 at 8:06 PM | Permalink | Reply

      It’s quite similar to the fiasco the City of Boston had with respect to the Big Dig. It was sold as a $2.2 billion project and ballooned to a $15+ billion project. The government was sure they were getting ripped off by the contractors, and hired KPMG to do a multi-million dollar audit (my brother was on one of the auditing teams). Rather than identifying savings, KPMG found that the city was delinquent on ~$1B.

  11. Yancey Ward
    Posted Feb 28, 2011 at 8:22 PM | Permalink | Reply

    Not bad for half a day’s work.

  12. Brandon Caswell
    Posted Feb 28, 2011 at 8:27 PM | Permalink | Reply

    Just another general clarification.

    In a general construction, or design/bid/build, the projects are tendered and the contractor is contractualy obligated to build it for the price he tendered. He can ask for more money only if he shows that something has changed from the original bid.

    In construction management, you usually don’t agree on an exact price. You hire a manager to oversee the project and deal with all costing and design issues. The obvious downside is that there is no solid price at the start and the price given for the project is just a rough estimate (in many cases the project isn’t even fully designed yet). It is a model that is very dangerous as it is essentially approving a project with no guarantee of cost.

    These are the general concepts, but a specific contract could be wrote any way you want as long as everyone will sign it.

  13. justbeau
    Posted Feb 28, 2011 at 8:30 PM | Permalink | Reply

    Whitewash is getting pricey.

  14. Boro Nut
    Posted Feb 28, 2011 at 8:34 PM | Permalink | Reply

    “The attached file contained a summary of the agreement between Acton and Muir Russell, including a suggestion from Acton that Russell’s fee be “a bit higher, £40,000

    “The language of the email is not definitive, but gives the impression that a budget of £ 40,000 was contemplated

    That’s you Steve. That is you, on this here blog, in your own words, being your consistent self, in your own inimitable style.

  15. AusieDan
    Posted Feb 28, 2011 at 8:42 PM | Permalink | Reply

    What is the problem?
    Really!
    This is just standard practice.
    Move along, there’s a good fellow, please Do just move along!

    /sarc off

  16. AusieDan
    Posted Feb 28, 2011 at 8:46 PM | Permalink | Reply

    The total cost was quite modest, less than one million quid.
    That’s very much in keeping with its importance.
    After all, that matter enquired into was of little importance.
    Wansn’t it?

    /sarc off

  17. JEM
    Posted Feb 28, 2011 at 11:04 PM | Permalink | Reply

    The Australians have a wonderful word for things like this – rort.

    • rafnics
      Posted Mar 1, 2011 at 8:49 AM | Permalink | Reply

      a meat pie short of a grand-final

  18. David S
    Posted Mar 1, 2011 at 4:30 AM | Permalink | Reply

    Not sure if this is editorialising too much, but it did strike me that the UEA must have had at least a cursory glance at Russell’s CV before engaging him, so it is hard to see how they could have been unaware of the Holyrood shambles. It is tempting to conclude that they deliberately went for the most inept and incurious of the many inept and incurious members of the “great and the good”.

    • Stephen Parrish
      Posted Mar 1, 2011 at 4:44 AM | Permalink | Reply

      I think they knew their man.

      • JohnH
        Posted Mar 1, 2011 at 8:48 AM | Permalink | Reply

        I think they did read the CV, heaps of Teflon in between the lines, a very safe bet.

  19. johanna
    Posted Mar 1, 2011 at 4:47 AM | Permalink | Reply

    Impressive. I have managed many consultancies on behalf of government bodies, and would never be able to get away with a document like this as an explanation of where the money went. Where is the breakdown of the fees paid to members of the inquiry? What on earth did they spend over 50 grand on under the ‘website management, report production and media advice’ heading?

    This scrap of paper has not the faintest resemblance to financial accountability. The FOIA request should include requiring a proper breakdown of the expenditure.

  20. Brownedoff
    Posted Mar 1, 2011 at 5:02 AM | Permalink | Reply

    David S Posted Mar 1, 2011 at 4:30 AM

    “It is tempting to conclude that they deliberately went for the most inept and incurious of the many inept and incurious members of the “great and the good”.”

    ———————————————–

    I do not think so. IMHO they deliberately went for the most skillful practitioner of the black art of justifying a pre-determined outcome and at the same time clearing all involved of any wrongdoing, including himself.

    If you have time, read his performance in front of a QC at the Holyrood Inquiry:

    http://www.holyroodinquiry.org/transcripts_documents/05-02-2004-am/transcript05-02-2004-am.htm

    Paragraphs 1 to 412.

    A classic Q & A from the record:

    “103. Mr Campbell QC: Is that a “No” then? You were not involved on the hands-on meeting which eventually led to the decision?

    104. Sir Muir Russell: I think the record shows that I was not at the meeting when the final decision was taken as between St Andrew’s House and Holyrood.”

    Sir Muir Russell is “Teflon-man” personified.

    • Posted Mar 1, 2011 at 9:00 AM | Permalink | Reply

      “Teflon-man” certainly. But when someone like Russell emerges with a good reputation after something like Holyrood there are others that know where bodies are buried. This can help to keep things on track in the next job. Boulton in particular was no accident.

      • Dave Andrews
        Posted Mar 1, 2011 at 5:28 PM | Permalink | Reply

        Agreed.

        Muir-Russell was hired purely to ‘impress’ the UK establishment and act as a decoy to the fact that ex UEA man Boulton was running the show.

        • Fred Bloggs
          Posted Mar 1, 2011 at 7:06 PM | Permalink

          For Muir Russell it was an opportunity to rehabilitate his reputation after the Holyrood disaster. Little did he know that he was going to be the patsy.

      • Posted Mar 1, 2011 at 7:49 PM | Permalink | Reply

        Re: Richard Drake (Mar 1 09:00), ah, perhaps it’s something to do with Boulton that is buried under those blacked-out lines.

  21. andy
    Posted Mar 1, 2011 at 7:20 AM | Permalink | Reply

    Of course someone who is much cleverer than I am may be able to work out what has been covered up by the black lines by using the bits of letters which are visible below and above the line.

    • Posted Mar 1, 2011 at 8:45 AM | Permalink | Reply

      Re: andy (Mar 1 07:20), it certainly has to be more than just an email address, looks like another sentence. What reasons are there, if any, for deleting sentences?

  22. Dave
    Posted Mar 1, 2011 at 8:33 AM | Permalink | Reply

    The line about ‘website management’ is interesting. It would appear the fees paid to Luther Pendragon(?) are included in that category…

    • DaveS
      Posted Mar 1, 2011 at 2:55 PM | Permalink | Reply

      Kate Moffatt of Luther Pendragon certainly worked hard at first ignoring, and then refusing to answer, questions. Nice work if you can get it.

  23. Posted Mar 1, 2011 at 10:18 AM | Permalink | Reply

    They spent more on website management/report production and media service than legal. Heck, they spent more on secretarial than legal.

    • glacierman
      Posted Mar 1, 2011 at 11:07 AM | Permalink | Reply

      It looks like that is code for public relations or something. You can manage one heck of a website for a tiny fraction of that cost.

  24. Posted Mar 1, 2011 at 10:19 AM | Permalink | Reply

    Oh my gosh, it’s worse than we thought.

  25. kuhnkat
    Posted Mar 1, 2011 at 11:43 AM | Permalink | Reply

    A quality whitewash for CRU would have cost twice as much. You get what you pay for!! 8>)

  26. Kate
    Posted Mar 1, 2011 at 12:50 PM | Permalink | Reply

    I contacted them:
    enquiries@publicappointmentscommissioner.org

  27. Dr Slop
    Posted Mar 1, 2011 at 12:56 PM | Permalink | Reply

    @Richard Drake:

    “Teflon-man” certainly. But when someone like Russell emerges with a good reputation after something like Holyrood there are others that know where bodies are buried. This can help to keep things on track in the next job. Boulton in particular was no accident.

    Ot perhaps Russell was no accident, if the initial contact from UEA was throught Boulton.

  28. Jeremy
    Posted Mar 1, 2011 at 2:00 PM | Permalink | Reply

    Don’t worry, Brits, you’re not alone in the woes caused by construction managers with corruption on their brain.

    http://www.latimes.com/news/local/la-me-build2-20110301,0,1960046.story

  29. stan
    Posted Mar 1, 2011 at 3:22 PM | Permalink | Reply

    At current exchange rate, this is over $450,000.

    • JEM
      Posted Mar 1, 2011 at 4:02 PM | Permalink | Reply

      It costs money to get a really good nothing these days.

  30. JasonR
    Posted Mar 1, 2011 at 6:18 PM | Permalink | Reply

    Nice work if you can get it. BTW, who was actually footing the bill?

  31. Fred Bloggs
    Posted Mar 1, 2011 at 6:39 PM | Permalink | Reply

    Who paid for the Oxburgh inquiry ? Was that the UEA too ? Anyone know ?

  32. Fred Bloggs
    Posted Mar 1, 2011 at 7:04 PM | Permalink | Reply

    Last year I produced a 160-page research report for a major bank. Design and production costs plus 1000 colour hardcopies amounted to about £5000.

    A website costs almost nothing to register. The inquiry one would have needed a fairly standard web designer/programmer to work on for a week or two. Someone would have needed to upload documents as and when needed. Let’s say £10000.

    So how they spent £52k on the report and the website and media advice is beyond my comprehension. Can we get the invoices? That media advice must have been pretty expensive.

    • Mark F
      Posted Mar 1, 2011 at 7:13 PM | Permalink | Reply

      Ahhh, Fred, the 54K is for spin management and damage control, of which we have seen very little. Yet. I’m sure Pendragon’s machine has some misinformation queued up to feed the seemingly ever-forgiving bandwagon press.

    • JEM
      Posted Mar 1, 2011 at 7:20 PM | Permalink | Reply

      You are making the highly flawed assumption that there was anything in Muir Russell’s ambit about cost containment.

      It’s fairly clear that this was just another opportunity to shovel some money into the ‘right’ pockets.

      And he indeed ‘played a blinder’.

  33. Posted Mar 1, 2011 at 10:57 PM | Permalink | Reply

    Steve,

    you say “reverse Midas touch.” I know one wordsmith who once rendered this as the “Minus touch.”

  34. Posted Mar 1, 2011 at 11:13 PM | Permalink | Reply

    Can it be that the team members pocketed 25k each? (25 ~= (147-40)/4) (The team members being: Geoffrey Boulton, Peter Clarke, David Eyton, and James Norton; and team supremo, Russell taking 40k). (With 7k left to buy carbon offsets for the team?) Clearly team ‘independence’ did not come cheap.

    • Steve McIntyre
      Posted Mar 2, 2011 at 12:19 AM | Permalink | Reply

      David Eyton was a senior BP executive at the time. It’s hard to believe that he would have submitted an invoice for services rendered. It would be interesting to find out exactly how much Eyton was paid personally. BTW minutes of one Muir Russell meeting said that Eyton had made a synopsis which would be made available when the Report was published. Hasn’t turned up.

      If Eyton was earning a little extra money by moonlighting at the University of East Anglia, shouldn’t he give BP a refund for the time that he didn’t spend on his BP duties. As I recall, BP had a lot on its plate last spring and Eyton had personal experience with Gulf deepwater – shouldn’t it have been all hands on deck?

      I also suspect that Eyton brought David Walker (a former BP hand) on board to salvage the inquiry. From the minutes, it appears that Muir Russell was well on his way to producing something like the Oxburgh report and that Walker was hired to produce something that at least had the appearance of a report.

      • Posted Mar 2, 2011 at 10:57 AM | Permalink | Reply

        So, if Eyton’s chunk went unclaimed, Boulton, Clarke, and Eyton move up to 35k, as the review team. (I assume that Walker was paid through the report production line item).

        I suspect that Eyton’s synopsis was probably on ‘seals, sea otters and walruses’ and Walker decided to ditch it quietly. ‘Very well written summary, sir. Unfortunately Muir imposed a page limit. We’ll use it as the foundation of the next report’).

  35. EdeF
    Posted Mar 2, 2011 at 9:51 AM | Permalink | Reply

    Let’s remember the Sydney Opera House, I think it came in at least 10X the
    estimate.

    As for Holyrood, I am presently writing the Opera: we have a Catalonian archictect, a Scottish Lord and a labor union.

  36. Boro Nut
    Posted Mar 2, 2011 at 7:36 PM | Permalink | Reply

    Can you tell me why my posts from the 28th of Feb are still awaiting moderation on March 3rd Steven (as if)? What exactly is so subversive about pointing out the obvious difference between a fee, some fees, and an overall budget?

    Oh wait…

  37. w.w. wygart
    Posted Mar 3, 2011 at 9:21 PM | Permalink | Reply

    Somebodies in the UK are getting fleeced, and some are getting over.

    By my feeble accounting methods:

    £42,436 for Secretarial support, [my arse], billed at £100/hr that is almost eleven secretaries full time for a week.

    £52,667 for website and media support? Billed as £200/hr that is over 250 man-hours of support time with a couple thousand quid left over to print reports.

    You know there is a something deeply wrong when Legal Advice is half of Secretarial support.

    All of the other line items actually seem to be within bounds for a dog and pony show of that general magnitude.

  38. Posted Mar 5, 2011 at 8:25 AM | Permalink | Reply

    Being someone who has headed up small and large consulting firms for almost 20 years, and participated in/headed up many government and university enquiries, audits and investigations I read the language of the email excerpt differently from the OP.

    If I were the consultant to whom the email is addressed I would read the 40k offer as being my fee to head the enquiry, not the total budget for the enquiry. The email states quite clearly that other costs of the enquiry are in addition to the addressee’s fee. This is actually normal practise for invited investigators and arbitrators. Many of my engagements in these rolls have be presented the same way.

    Invited investigators are there because their specific “brand” carries “integrity” that will pass to the enquiry. At least that is the theory.

    The enquiry head then prepares a plan, schedule, resourcing requirements and a budget for the enquiry in consultation with the customer (he/she who pays) and/or the stakeholder representative committee. These plans can be detailed or a only a couple of pages depending on the experience of the participants, the total cost and the complexity of the data collection space. For a 300k enquiry I would expect it to be only a few pages.

    In any case, one of the first steps is to define the additional resources and expertise that will be required – these costs would therefore be additional.

    So irrespective of the reasonableness of the total fees themselves, it is not apparent to me that a total budget of 40k for the enquiry is what the email contemplated, on the contrary it would seem that the enquiry head charged essentially what he was advised should be the fee.

    Now, whether it was appropriate for the customer in this case to advise the consultant what his quote for his fees should be prior to receiving said quote, would be answered by the purchaser’s purchasing policy and procedure manual.

    • Posted Mar 5, 2011 at 8:27 AM | Permalink | Reply

      Oops – that was meant to be *in these roles have* not *rolls*

  39. Posted Mar 6, 2011 at 10:31 AM | Permalink | Reply

    Muir Russell personally collected the amount that the university seems to have contemplated for the entire inquiry,

    I’d agree with Darkstone (3/5 above) that the 40K can be read as just Muir Russell’s (excessive) promised take.

    Is it possible to get a breakdown of the 147K in total team fees? This could be interesting.

2 Trackbacks

  1. By Top Posts — WordPress.com on Mar 1, 2011 at 7:12 PM

    [...] The Muir Russell Budget In December 2009, Acton sent Muir Russell an email agreeing that Muir Russell would lead the inquiry. The language of [...] [...]

  2. [...] I had suspicions before, after reviewing these two posts on “contract” and “expenses” for the Oxburgh report at CA,  followed by Bishop Hill’s “When is a contract [...]

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