COMMONS

MPs publish report on assurance for major projects

16 October 2012

Public Accounts Committee publishes its 14th Report of this Session which, on the basis of evidence from the Major Projects Authority, HM Treasury and an expert witness from the private sector, examined how the new central assurance scheme was progressing.

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:

"My Committee has long been concerned that government too often turns a blind eye to warning signs of impending failure of its major projects.
The Major Projects Authority was set up in 2011 to improve performance on delivering big projects. There are some signs of better decision making - for instance, stopping the NHS programme for IT.
But these are just first steps. With a sharply cut workforce and a budget of just £6 million a year to oversee over 200 projects with a value of £376 billion, the Agency cannot achieve what it was set up to do. It has to focus on only the biggest and most risky projects. Even then, it has to rely on the individual departments to play their part. Over a third of departments have been slow to adopt a new assurance system.
By establishing the Major Projects Leadership Academy, the Authority is finally addressing the weaknesses in project management skills of civil servants . But teaching these skills is only half the battle. The Authority has to make sure that, once trained, these senior civil servants stay on the job and see it through.

We are also concerned that the Government has not met its commitment to transparency and published information on the status of major projects.  In the light of widespread concerns over larger projects, such as whether Universal Credit can be delivered on time and within budget, we need to receive annual updates on performance."

Margaret Hodge was speaking as the Committee published its 14th Report of this Session which, on the basis of evidence from the Major Projects Authority, HM Treasury and an expert witness from the private sector, examined how the new central assurance scheme was progressing.

The Major Projects Authority (the Authority) was set up in 2011 to address weaknesses in the central system for assuring major projects across Government. The Authority, a partnership between HM Treasury and the Cabinet Office, is responsible for examining and reporting on projects , and intervening where they are going off track. The Authority has made good progress in its first year, but, with only one third of major projects being delivered to time and budget, much more needs to be done.

The Authority spends £6 million to monitor over 200 projects worth £376 billion. It has much stronger powers but much less money than its predecessors. Clearly, the resources it has will affect its impact. It focuses its resources on the projects of highest cost and risk, and it is dependent on engagement from departments to achieve its aims, but this is not always forthcoming. Some 62% of departments have adequate formal plans to provide assurance on projects, although the extent to which these are used to manage projects varies. The remaining departments have been slow to adopt the new assurance system. The Authority told us that it is engaging with departments to ensure they understand the value of these tools in improving the performance of government projects.

The Authority's reports should inform HM Treasury's decisions on project funding, and there are signs that this is beginning to take place. The decisions to re-scope the National Programme for IT in the NHS and to cancel the first Carbon Capture and Storage competition were taken following reviews by the Authority. But a stronger link is needed between the results of the Authority's assurance reviews and the spending decisions made by HM Treasury.

Long-standing weaknesses in the project management skills of civil servants are being addressed by the training provided by the Authority’s new Academy. However, retaining these skilled individuals in the public sector and ensuring they remain in the one job long enough to enable projects to succeed will be challenging.

The Authority has significantly improved the quality of management information available to Government on its projects, but this is not yet being used to best effect by HM Treasury to oversee spending on projects. The Authority has not met its commitment to publish information on project status; on-going discussions within Government are seriously delaying the publication of the Authority’s annual report and calling into question the Government’s commitment to transparency.

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