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Projects leaving the Government Major Projects Portfolio

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 today’s report by the National Audit Office (NAO).

The Government Major Projects Portfolio (the Portfolio) was created by the Authority in 20111 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 outcomes2.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 20163. Although it has increased transparency about whether projects have delivered their objectives, this is not happening consistently, meaning the government can’t 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.

“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.”

Amyas Morse, the head of the NAO, 19 October 2018

Notes for Editors

Key facts

430 projects joined the Government Major Projects Portfolio between April 2011 and September 2017

302 projects left the Portfolio between April 2011 and September 2017

35 of the 48 projects we examined left because they were implemented or had reached a significant milestone. The rest left for other reasons such as cancellation.

£423 billion budgeted whole-life costs of the 133 projects in the Portfolio in September 2017

£657 billion benefits to be delivered by these projects. There is no corresponding figure for what benefits have been realised

34 of the 48 projects we examined delivered the intended outputs

176 projects left the Portfolio without an exit review to confirm that the project is in operation and achieving benefits

 

Notes for Editors

  1. When the Government Major Projects Portfolio was created in April 2011, the Infrastructure and Projects Authority was called the Major Projects Authority.
  2. As delivery outcomes are not reported after projects have left the Portfolio, the NAO followed up on a selection of 48 projects from across 17 departments to examine what happened to them and whether they delivered the intended benefits.
  3. In 2016, the NAO reported on whether the establishment of the Authority and the Portfolio had improved government's performance in delivering major projects. The Committee of Public Accounts (the Committee) expressed concern: about the quality of data, including that on benefits and the apparent gap in responsibilities for reporting on the delivery of benefits; and that some projects leave the Portfolio without a review to ensure that they are on track to deliver their benefits.
  4. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  5. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 47/18