National Audit Office reports on government monitoring of major projects

By agency reporter
October 21, 2018

Monitoring of the UK’s biggest and riskiest projects has improved, but the Infrastructure and Projects Authority (the Authority) and government departments need to do more to increase transparency about what benefits are delivered to ensure taxpayers secure maximum value, according to a report published on 19 October 2018  by the National Audit Office (NAO).

The Government Major Projects Portfolio (the Portfolio) was created by the Authority in 2011 to improve government’s delivery of major projects, which are often large scale, novel and delivered by multiple stakeholders. As at September 2017, the Portfolio consisted of 133 projects with a total budgeted cost of £420 billion and over £650 billion of planned benefits.

In 2016 the Committee of Public Accounts expressed concern that data on project benefits was poor and that projects often left the Portfolio without a review to ensure they were on track to deliver. Poor measurement of what projects achieve reduces accountability and transparency for government and Parliament, and makes it difficult to assess whether the costs of projects are justified.

Between April 2011 and September 2017 302 projects left the Portfolio. The NAO found that the Authority lacks complete information about why these projects left and what they had delivered by the time of their departure, making it difficult to determine whether projects left at the right time and for the right reasons. Poor records and incomplete reporting also reduce transparency, increasing the risk and perception that projects are removed inappropriately.

Of the 48 projects that the NAO has closely reviewed, 12 achieved their intended outcomes. However, for 22 projects it was not possible to determine if this was the case. For some projects this was because they were still being rolled out and it was too early to tell, but in other cases projects did not have a business case with intended outcomes to measure against. For example, while the Household Energy Efficiency programme improved energy efficiency in one million homes, it did not have measurable targets for wider objectives such as saving energy. It is not possible, therefore, to say overall what these projects have achieved.

Some projects considered to have met their objectives were not in fact measured against their original objectives, potentially providing an inaccurate picture of their success. For example, the Mobile Infrastructure Project initially committed to build 575 mobile telephone masts to expand coverage to 60,000 premises, but it built 75 masts, reaching 7,199 premises, against a revised target of 40 masts because the initial targets were not achievable. The project was awarded the highest confidence rating when it left the Portfolio and was subsequently evaluated against the revised target, but was not measured against the original target.

In 2016 the Authority introduced a process for deciding when projects should leave the Portfolio, addressing concerns raised by the NAO and the Committee of Public Accounts in 2016. Although it has increased transparency about whether projects have delivered their objectives, this is not happening consistently, meaning the government can not be sure projects are leaving when they should.

The NAO has raised concerns about whether accountability is diluted at the point at which projects leave the Portfolio. For example, some projects delivered by a third party and which have a limited departmental role have been removed from the Portfolio before they have completed, such as the project to enable investment in the Hinkley Point C nuclear power station, which left when the department responsible identified investors and signed a construction contract. Yet, the department remains the project sponsor, responsible for continuing oversight of the developer and has risks to manage.

The NAO recommends that the Authority and HM Treasury require all projects to have a business case which is kept up to date to reflect any changes to a project’s scope, and work together to deliver intended benefits, keep costs within budget and select the right projects for future funding. Government departments should also manage the delivery of major projects until it is clear what benefits they have achieved and publish evaluations on projects when they complete to help departments learn lessons.

Amyas Morse, the head of the NAO, said: “The Infrastructure and Projects Authority is clearly contributing much-needed project management and evaluation techniques to the mammoth programme of major projects run by government. We believe it could drive greater improvement if it adopted a clearer method of measuring the benefits of these projects, and tougher discipline over the terms on which projects are included, or more to the point, excluded from its oversight.”

* Read the report Projects leaving the Government Major Projects Portfolio here

* National Audit Office https://www.nao.org.uk/

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