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Assurance for high risk projects

The National Audit Office has today called for a central, mandatory system of assurance to be established for government. The spending watchdog recognizes that central government has made a number of improvements towards providing assurance for high-risk projects – particularly by introducing OGC Gateway™ reviews and establishing the Major Project Review Group. However, the lack of an integrated system is limiting the ability of government to make further improvements.

Central government’s high-risk projects are frequently large scale, innovative and reliant on complex relationships between diverse stakeholders. Such projects frequently present a level of risk that no commercial organization would consider taking on. Projects can fail to deliver to time, cost and quality. Assurance provides information to those involved in projects, helping decision makers to be better informed and reduce the risk of project failure.

The NAO estimates that the total cost to government of assurance for high-risk projects is £8.3 million, which is minimal compared with the £10.5 billion of annual expenditure on the 42 projects tracked within the Major Projects Portfolio. If assurance helps prevent just one of government’s high risk projects from a serious cost overrun, the size of the potential saving more than justifies the investment.

The view of the NAO is that government can build on its successes by ensuring that the new system of assurance:

  • has a clear mandate;
  • is non-optional;
  • is outcome focussed;
  • is built on a higher and more exacting evidence base;
  • triggers further interventions where necessary;
  • provides the ability to plan and resource assurance activity;
  • systematically propagates lessons learned; and
  • minimizes the burden placed on projects.

"A new mandatory system of assurance for high risk projects is needed. This will help to reduce the financial risk to the taxpayer and increase the likelihood of successful project delivery. The new system should make greater use of hard evidence in judging whether the elements fundamental to successful project delivery are in place and operating effectively."

Amyas Morse, head of the National Audit Office

Notes for Editors

  • Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk.
  • The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 28/10