It is encouraging that the government says it has accepted the recent recommendations of the Office for Value for Money regarding how to improve how large projects are managed – or mismanaged, as often seems to have been the case.
The UK’s record in so called ‘mega project’ delivery is not so great, to put it mildly. HS2 springs to mind. By any standards HS2 is a project that could properly be defined as a mega project. But the Treasury doesn’t seem to be too sure what it is talking about when it references mega projects.
The Public Accounts Committee (PAC) has noticed this and spelled out the potential problems in a new report. The PAC says a mega-project can be defined as government’s biggest and highest-profile projects, which are particularly costly (in excess of £10 billion), risky and complex.
Issues routinely arising with these projects include unclear objectives, construction starting when design is still immature, and budgets and schedules announced too early, the OVFM found, and the PAC agrees. The MPs welcome the Treasury’s stated commitment to implement stronger governance for these projects.
But, they warn, many critical government programmes could be left out of plans to strengthen their governance. They see a danger of complex schemes being left to slip through the net. The PAC expresses surprise that the Treasury and the OVFM both only consider three projects in the government’s portfolio to be ‘mega’, and thus subject to this stronger governance – HS2, the Sizewell C nuclear power station, and the Dreadnought submarine programme. But there are some 200 of them, the PAC says.
This will omit projects including Euston station, the New Hospitals Programme, the Lower Thames Crossing, the Oxford-Cambridge Arc, and artificial intelligence. All projects other than the three so far considered ‘mega’, will still fall under the previous approach to governance and decision-making, which it is widely agreed was not working effectively.
So the PAC has called on the Treasury to lay out the rationale for the mega-project criteria. Why are some large scale investment programmes to be managed more effectively – hopefully – under the new regime, and many others left to in the cold?
The PAC says the government has set out a number of ‘missions’ as part of its plans for reform, and has set up Mission Boards to oversee their delivery across government.
Each mission demands investment in major projects, and the PAC says it unconvinced by how these separate yet overlapping structures would work in practice. The report warns that work could be duplicated and confusion arise without the right skills involved in decision-making, and asks for an explanation with examples on how these arrangements will help deliver government’s infrastructure strategy.
The PAC warns that it is not clear how the Treasury and the National Infrastructure and Service Transformation Authority (NISTA) will be held to account on its progress with the changes. It warns of the risk of an absence of independent scrutiny over the effectiveness of the Treasury and NISTA in delivering the strategy now that the strategic advisory role of the National Infrastructure Commission (NIC) has been brought inside government.
The PAC is calling for more information on how government will make arrangements for independent assurance to be in place. This will be crucial for effective oversight of the delivery of mega projects; whatever they turn out to be.
Nick Barrett
Editor