House of Commons - Public Accounts - Twenty-Seventh Report

Select Committee on Public Accounts Twenty-Seventh Report

2 Application of the Gateway Review Process

9. Of all the OGC's initiatives the introduction of mandatory Gateway Reviews in February 2001, for projects classified as high or medium risk, has shown the most promise. The review process provides external scrutiny and oversight of major central civil government programmes and projects.[14] By 31 March 2004 a total of 440 reviews had been conducted on 254 IT-enabled programmes and projects.[15] The process was tightened in June 2002 with the introduction of colour-coding — Red, Amber, Green (Figure 1) — to denote the overall status of projects, and at 31 March 2004 50% of these have been Amber, 28% Red, and 22% Green (Figure 2). Figure 1: RAG assessment criteria for overall status of Gateway projects

Source: Office of Government Commerce
Figure 2: Gateway Reviews of IT enabled projects by Red-Amber-Green status June 2002-March 2004

Between June 2002 and March 2004 50% of projects were designated as Amber, 28% as Red, and 22% as Green.

Source: Office of Government Commerce

The impact of Gateway in departments

10. The issues raised by Gateway Review teams have remained consistent since their introduction in 2001,[16] suggesting that despite a clear body of evidence, departments are failing to foresee obstacles to successful delivery. Moreover, one-fifth of all projects that have undertaken more than one review have got worse as they progressed through the process, and over 40% have not improved their status (Figure 3). Figure 3: Performance of the 67 projects which had undertaken two or more colour-coded Gateway Reviews to end of March 2004

Source: National Audit Office/Office of Government Commerce

11. The OGC's Supervisory Board is chaired by the Chief Secretary to the Treasury and made up of Permanent Secretaries, including the OGC's Chief Executive, and senior external representatives. It currently receives, each quarter, an analysis of Gateway Review results broken down by their Red-Amber-Green status.[17]

12. A red review at an early stage of a project's lifecycle shows that the review process has been successful in identifying risks to successful delivery at an early stage, and as such should be positively interpreted.[18] Successive red reviews, on the other hand, are not acceptable and from April 2003 projects receiving a second consecutive red review have triggered a letter from the Chief Executive of the OGC to the Permanent Secretary of the department responsible. This letter highlights the importance of identifying and addressing risks to successful delivery at the earliest possible stage. Eight IT-enabled projects have since received red gates in consecutive Gateway Reviews. Of these:

One has had a subsequent green review, and one an amber
One is currently undergoing a further review, and another has requested one; and,
The remaining four have not yet requested subsequent reviews.[19]

Late engagement with the Gateway Review process

13. The Gateway Review process examines a project at five critical stages of its lifecycle. In addition there is a Gate 0 to assess the feasibility of programmes at their outset (Figure 4). Half of all Gateway Reviews of IT-enabled programmes and projects across government have been at Gates 2 (Procurement Strategy) and 3 (Investment Decision), and a high proportion of these (63% and 41% respectively) have been first-time reviews.[20] More projects are now coming forward for review earlier and the OGC has made clear to departments that projects can no longer enter the process after Gate 3.[21] Nevertheless 30% of all programmes and projects are still by-passing Gates 0 and 1, and therefore entering the process after the business case has been prepared.[22]Figure 4: The stages of the Gateway Review process

Gateway Stage Purpose Description

Gateway Review 0
Strategic assessment Establish business need for programme
Asks how the proposed programme meets the business need that lies behind it. Assesses the capability of those who are responsible for the programme and the support of users and stakeholders.

Gateway Review 1
Business justification Develop business case Asks whether the end project is feasible, affordable, and likely to achieve value for money. Also whether the high-level plans for establishing it are clear and realistic.

Gateway Review 2
Procurement strategy Develop procurement strategy Asks whether the tendering strategy sufficiently reflects business requirements, awareness of the market, good practice in procurement, and changes to business need. Asks whether funding is available for the whole project, and with adequate financial controls in place.

Gateway Review 3
Investment decision Competitive procurement Asks whether the tendering process has met its objectives and followed good practice, and whether the prospective contractor is likely to deliver on time, within budget and achieve value for money. Assesses readiness of the business to implement the contract.

Gateway Review 4
Readiness for service Award and implement contract Assesses whether project plans are up to date, and adapted to working successfully with the contractor. Asks whether implementation of the project is going to plan, with any lessons for the future being recorded.

Gateway Review 5
Benefits evaluation
(repeated as required) Closure Assesses whether expected benefits are being delivered, and what is being done to pursue continued improvements. Asks what contingency plans there are for future changes.