COMMONS

New measures needed to safeguard public spending on major projects

18 March 2016

The Public Accounts Committee report says vital scrutiny of the government's performance could be weakened by the merger of the Major Projects Authority and Infrastructure UK.

The Committee highlights concerns that the Infrastructure and Projects Authority, formed on 1 January this year, risks becoming "too much of a champion" for government projects.

Project delivery is "not understood"

It also finds the requirements of good project delivery "are not understood well enough by policy developers and decision makers outside the project management profession".

The Report states:

"Ministers and Permanent Secretaries are often responsible for developing the policies which lead to projects and taking significant decisions on those projects.

Yet very few Members of Parliament enter politics with previous experience in running large organisations or delivering major projects. Likewise, Permanent Secretaries' or potential Permanent Secretaries' careers will not necessarily include experience of delivering major projects."

Authority responsible for independent assurance

The Major Projects Authority was established in March 2011 with responsibility to provide independent assurance on projects within the Government Major Projects Portfolio, which groups together central government's biggest and riskiest projects.

It was also responsible for providing support to those projects and for reporting on their performance.

The Committee concludes that while it has supported the Major Projects Authority's efforts and initiatives, "it is disappointing that after nearly 5 years we cannot see more tangible signs of what impact these initiatives have had".

New Authority must "maintain its focus"

The Major Projects Authority rated 34% of the government's major projects as either 'red' or 'amber-red' at June 2015, meaning that successful delivery is unachievable or in doubt unless action is taken. For the projects due to deliver in the next 5 years, 35% are rated as red or amber-red.

Among its recommendations the Committee calls on the new Infrastructure and Projects Authority to "maintain its focus on project assurance and support".

Report back in January 2017 on progress

It should report back to the Committee in January 2017 on the benefits of the merger and also how the Authority has improved data collection and analysis, "to allow a transparent, open and honest dialogue about project performance".

The Committee also recommends the Authority sets out "plans for a revised approach for early intervention" when projects are at risk, and that it works to extend awareness of the delivery process with training "tailored to the needs of Members of Parliament and to fast track civil servants who are likely to be responsible for major projects".

Government must also set out plans for tackling serious skills shortages in project delivery, says the Committee, "especially in the commercial and digital skills needed to deliver 'transformation' projects".

Chair's comment

Meg Hillier MP, Chair of the PAC, said:

"There is clearly a role within government for an independent organisation that challenges departments about their plans and projects.

One of our concerns is that this important function is not weakened or undermined following the creation of the Infrastructure and Projects Authority.

But we also question just how effective the previous Major Projects Authority has been in bringing meaningful influence to bear on government performance.

Its own assessments cast doubt on the deliverability of a third of government's major projects and there are grounds to question how seriously its warnings have been taken by government.

For example, our Committee's recent report on e-Borders and its successors highlighted the fact that since 2010, the Major Projects Authority issued seven warnings about these programmes.

We concluded senior officials were dismissive of these warnings. While we cannot know if this attitude prevails across Whitehall it is clearly cause for concern.

As a priority, government must act to better equip ministers and senior civil servants responsible for such projects with the skills and wider awareness they need to deliver them.

Ambitious timetables for delivery are of little value to the public if they simply cannot be met. Failing to plan properly and set realistic delivery targets from the outset can set in train expensive problems for which taxpayers pick up the bill.

The Infrastructure and Projects Authority told us in evidence the three current programmes it is most concerned about are High Speed 2, Courts Reform and Shared Services—taken together, complex and challenging projects that will continue to require close and careful monitoring.

If taxpayers are to get good value for their money, it is vital the Infrastructure and Projects Authority takes action now to ensure it provides effective scrutiny throughout the life of these and other projects."

Report summary

We have supported the Major Projects Authority's efforts to improve project delivery in government and recognise the steps it has taken to strengthen project assurance, improve transparency, and introduce project leadership training. 

But it is disappointing that after nearly 5 years we cannot see more tangible signs of what impact these initiatives have had. Moreover, there are still big challenges ahead.

34% of projects red or amber-red

The Major Projects Authority rated 34% of the government's major projects as either 'red' or 'amber-red' at June 2015, meaning that successful delivery is unachievable or in doubt unless action is taken. For the projects due to deliver in the next 5 years, 35% are rated as red or amber-red.

In this demanding environment, it is important that there is a body within government which challenges departments about their plans and implementation of projects.

We are concerned that the merger of the Major Projects Authority and Infrastructure UK risks the new body (the Infrastructure and Projects Authority) becoming too much of a champion for government projects, at the expense of its vital role in challenging government performance.

Further information

Image: PA

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