Glasgow School of Art: Scot Gov considers inquiry into Mack scandal

The newly reappointed culture secretary Angus Robertson is currently contemplating the next steps.

The Scottish Government has come under fresh pressure to act after Glasgow School of Art admitted it is heading to arbitration with the company that insured the Mack over questions regarding whether it was covered in the wake of the 2018 blaze but insists that its faithful reinstatement will not be reconsidered.

GSA has confirmed there were insurance issues after The Herald revealed that a wrangle over the cover had contributed to issues with pursuing the rebuild.

In the wake of the 2018 blaze, GSA said it was confident that their insurance would cover the costs of the project.

READ MORE:  Glasgow School of Art: Insurance claim fuels Mack rebuild 'inertia'

READ MORE: Lachlan Goudie: ScotGov must intervene over School of Art fails

Glasgow School of Art: We 'appreciate' concern over future of Mack

Glasgow School of Art: students and politicians recall the 2014 fire

'A scandal': 19 months of 'inertia' over the rebuild of a Scottish national treasure

A Herald series of investigations revealed how attempts at the reinstatement of the masterpiece originally designed by renowned Scots architect Charles Rennie Mackintosh had stalled leading to serious questions about whether the restoration will ever happen.

Concerns have now escalated in the wake of GSA admitting that it was in dispute with their insurers and there are now calls for a public inquiry and Scottish Government involvement to resolve "the mess".

The Herald previously revealed that a six-year failure to reach a settlement over a "complex" insurance claim over the fire that ravaged the Mack had contributed to the level of "inertia" over its reinstatement.

We revealed that a long-term inability to reach an agreement with insurers over a payout and a botch up over the way the school went about procuring experts to rebuild Glasgow School of Art's Mackintosh Building after the June 2018 fire have been key to what some see as the effective "suspension" of works on the building.

GSA refer to any insurance income received from the fire in its official financial records as a "contingent asset" meaning that it is only a potential financial gain.

Now ministers have confirmed that it is considering calls for a probe into the issues surrounding the rebuild.

A Scottish Government source said: “The Scottish Government has welcomed the Glasgow School of Art’s plans for a faithful reinstatement of the Mackintosh building. The Mackintosh Building is owned by The Glasgow School of Art, which is an autonomous body with responsibility for its own strategic and operational decision making."

But the source added: “Careful consideration is... being given to the call for a public inquiry, and the culture secretary will update the constitution, Europe, external affairs and culture committee on any developments in this space.”

The June 2018 fire destroyed the building as it neared the end of a multi-million pound restoration project following an earlier blaze in May 2014.

While a design team was supposed to have been in place, according to GSA itinerary, by August 2022 - that still has not happened with hopes of getting any council planning approval for the project not expected until the spring of 2026 the earliest, according to estimates based on GSA's own schedule.

GSA has now said that it has chosen to enter into arbitration proceedings with its insurers.

It said: "Since June 2018, Glasgow School of Art has been working through the very complex insurance claim, supported by a team of external legal and insurance professionals.

"Following publication of the Scottish Fire and Rescue Service Fire Investigation Report in January 2022, insurers requested further information which Glasgow School of Art provided to enable them to confirm policy cover.

"In the absence of this confirmation, Glasgow School of Art has chosen to initiate arbitration.

"The arbitration process is subject to a confidentiality provision which means that we are not able to disclose any further details."

They confirmed that work to date, has totalled around £18 million and has been funded by interim payments from the insurers.

It is said that GSA is now hoping to have a design team in place by July to identify the "appropriate route to delivery".

A fresh business case is expected with its conclusions to be made public in early 2025.

But as The Herald previously revealed, the project will not be completed by the original 2030 deadline and is not now expected to be complete within the next decade.

In the wake of the fire, GSA said that an insurance payout was key to cover the bill for rebuilding the Mack.

Then art school director Tom Inns said: “It will require a lot of resource, but that is why you have full building insurance."

Then chairwoman of the school’s board, Muriel Gray, suggested that no further public funds would be required, and that rebuilding costs could be supported by insurance money, charitable funds and fundraising left over from 2014, when the school was the victim of a previous fire. 

|Professor Alan Dunlop, one of Scotland's leading architects who once put his hat in the ring to become the next chair of GSA and is a stakeholder consultee for the project said the latest twist shows that GSA was "incompetently handling" the rebuild and feared that the project will not now ever see the light of day.

"They won't be able to rebuild without insurance," he said. "You are talking of costs of over £100m and there are just so many issues relating to the costs of the whole thing."

He believed that the Scottish Government should now intervene.

"We are not talking now about when it will complete but whether it will happen at all and the board should resign.

"They have been less than forthcoming about the process and there should be a public inquiry. There have been a series of unforgiveable errors here and the situation is very worrying indeed."

But in message to students, GSA insisted that the new business case examination will "not reconsider" whether a faithful reinstatement of the Mack remains the preferred option.

GSA director Professor Penny Macbeth said: "We remain committed to the faithful reinstatement of the Mackintosh Building, and for that to be done in an exemplary way, returning it as a working art school building at the heart of Glasgow's creative and cultural eco-system."

According to the school's project itinerary, the architect procurement process that has been postponed since March, last year was expected to take four months.

Funding arrangements have still not been confirmed and neither the Scottish nor UK Governments have been approached to date by GSA in any bid to secure funds to cover the capital costs of any restoration. The business case schedule talked of confirming funding arrangements to be in place by April 2022.

And no steps had yet officially been taken to appoint a main contractor for the reinstatement of one of Scotland's most internationally renowned landmarks.

An original GSA risk management analysis categorised a delay of more than six months with the project as "catastrophic".

A contrast has previously been made with the work done on the Notre Dame Cathedral in Paris, which was severely damaged by a blaze in 2019 and is scheduled to reopen at the end of this year.

The issues with insurance have emerged after The Herald revealed that in 2012, before the first fire, the GSA's land and buildings were valued at £8.138m. Before the second fire in 2018, the value was put at the same, £8.138m. After the 2018 fire, however, the valuation had dropped to £1.561m.

Some raised questions on the logic for the valuations in the wake of what is a six-year insurance complication.

Video: A chat about the Glasgow School of Art Fires series with Professor Alan Dunlop

According to financial papers, after the 2014 fire, an examination of the Mack valued it at "considerably in excess of the depreciated figure used in these accounts... accordingly, it was deemed that it was satisfactory not to impair the Mack".

However, after the 2018 fire, the extent of the damage meant that the value of the building was "fully impaired", meaning that there was a permanent reduction in its value. It left only the value of the land on which the Mack stood.

At the time of the 2018 fire the Mack was covered by what GSA called an owner-controlled insurance programme, designed to co-ordinate general liability coverage for all parties working its rebuild.

That comprised cover for the contract works and the pre-existing structure of what is one of Scotland's most precious landmarks.

But according to a December financial analysis of the state of GSA, the value and method of the receipt of insurance sums relating to the Mack had "still to be agreed" so represented a "contingent asset".

A three-year-old detailed business case examination of the project revealed that while a variety of funding sources may be available to deliver the capital project and support operation of the new building, its affordability was "dependent" on the outcome of the insurance claim.

A report of a governors meeting from June, last year seen by The Herald said that more detailed discussion on the options available to the GSA would be useful once the outcome of the insurance claim was confirmed.

The document said members also reflected on the need to "exercise caution" in regard to how all available funding should be deployed in respect of the re-instatement of the Mack.

Apart from the insurance dilemma, also putting a spanner in the works is the botched process for procuring architects to design the project.

The contract was due to start in January 2023, five months after the design team was due to be in place according to the design team was supposed to have been in place according to the original 2021 business case itinerary.

Architects John McAslan + Partners were the original top scorers in the bid to oversee the rebuild. But it was then awarded to another firm, understood to be Hawkins\Brown after a recalculation.

The reset came after the school received a pre-action letter from one of the other bidders challenging the final outcome was received on February 3, 2023. The school was advised to expect a summons three days later.

The school blamed a "technical error in the scoring matrix used in the procurement process" for the issue.

GSA has been approached for clarity about the insurance questions and how that affects its attempts to raise the money needed to pursue the project.