Public spending watchdog the Public Accounts Committee (PAC) has set itself up for a busy period between now and at least the summer parliamentary recess in July with the announcement that it will be holding inquiries into a range of major infrastructure projects.
Coming under the PAC’s famously close scrutiny, will be Northern Powerhouse Rail, Sizewell C nuclear power station, support for British Steel and investment in research infrastructure.
MPs themselves choose what will be included in its programme of inquiries, and each inquiry is informed by the work of the National Audit Office (NAO). The PAC uses NAO reports as starting points, and each is accepted as providing an agreed factual basis. Many of their reports have been particularly damning of public procurement activities.
The most recent NAO report was on Northern Powerhouse Rail in March. It wasn’t particularly scathing – which doesn’t mean the PACs won’t be – but it did raise serious questions about how decisions about spending huge amounts of public sector money are developed and advanced. The NAO found that the government has not been clear in setting out how its plans for this £45 billion projects will actually benefit economic growth, which is said to be a major justification for investing £45 billion.
The NAO report criticised the government for not yet having established appropriate governance arrangements between national and local authorities. NAO found that local government bodies in the north said that their ability to progress with local plans had been hampered by poor engagement and a lack of clarity over Northern Powerhouse Rail. NAO said engagement with local authorities and strategic partners has been unclear and the project has to align more closely with national and regional growth strategy.
Plans for the east-west rail link were thrown into doubt following the cancellation of the northern leg of HS2 in October 2023. In an updated programme published in January this year, the project was downsized compared to the original 2018 plans, but an entirely new rail link between Manchester and Liverpool was added.
The NAO report says the government had at least identified important lessons from HS2 and other major rail programmes, including the need for strong governance processes and effective contract and financial management. The programme had also taken steps to manage how it fits with other rail upgrade programmes in the north of England, such as the Transpennine Route Upgrade.
But despite this progress the government had more work to do to show how wider economic benefits for the north of England would be delivered. NAO head Gareth Davies said: “Improving rail service and infrastructure in the north of England is a vital enabler of economic growth and productivity. DfT has taken steps to set up Northern Powerhouse Rail for success, including identifying key lessons from other programmes. But further work is needed to ensure it aligns with national and local growth plans.”
Further work is needed by DfT to ensure that the programme aligns with national and local growth plans. So the report is not exactly an endorsement of the way the project is being advanced, but it could have been worse. It will be interesting to see if the PAC similarly pulls any punches – history suggests not.
Nick Barrett
Editor