Assurance for major projects - Public Accounts Committee Contents

1  Managing Major Projects in Government

1.  The Major Projects Authority (the Authority) was set up in 2011 to address weaknesses in the central system for assuring major projects across Government. The Authority, a partnership between HM Treasury and the Cabinet Office, is responsible for examining and reporting on project progress, and intervening where projects are going off track.[2] The Authority's scope includes examining central government's spending on major projects, but its remit excludes "business as usual" and local government spending.[3] The Authority currently reports that only one third of government's major projects are delivered on time and budget.[4]

2.  The Authority has made good progress in its first year of operation, but more work is needed to embed an integrated assurance system across government. This requires effective engagement from departments in adopting the new assurance system, which in practice has been variable. The Authority told us that only 62% of departments have adequate formal plans for providing assurance on projects, including Integrated Assurance and Approvals Plans (IAAPs), which set out how their internal assurance processes will align with those of the Authority, and with HM Treasury's funding approval milestones.[5]

3.  Better performing departments, such as the Ministry of Justice and the Department for Work and Pensions, are using IAAPs as management tools to help them to deliver their projects. Other departments, however, have been slow to comply with the new assurance system. We believe that a cultural change is required to secure the level of engagement necessary to embed the new assurance system, starting from the top in these departments.[6] The Authority told us that it was engaging with departments to ensure they understand the value of these tools in improving the performance of government projects and contributing to better project delivery.

4.  The Authority's assurance reports on major projects are intended to inform HM Treasury's decisions on whether to approve project funding at key project milestones and there have been a number of examples of this happening in practice. The National Programme for IT in the NHS was finally halted and dismantled in 2011 on the advice of the Authority after several years of concern from this Committee over its ability to deliver. The Department for Energy and Climate Change similarly cancelled the first competition process for the Carbon Capture and Storage scheme following a review by the Authority. The Authority told us that the contracts for e-Borders had also been terminated following the recommendations in its review.[7]

5.  For the Authority to deliver its objectives and improve project performance across government its assurance reviews need to have demonstrable consequences and a clear link to decisions on project funding and continuation.[8] The Authority does not have the power to stop or reset projects which are going off track and too many projects continue for too long before action is taken.[9] HM Treasury told us that it was getting better at using the Authority's recommendations when making funding decisions but acknowledged that this had not always been the case in the past.[10] HM Treasury confirmed that it has the power to stop or re-scope projects and told us that in future it would ensure that these decisions were made on the advice of the Authority.[11]

2   C&AG's Report paras 1.1-1.9 Back

3   Qq 117-119 Back

4   Qq 5-6 Back

5   Q 19 Back

6   Qq 19-32 Back

7   Qq 45-49, 54-58 Back

8   Q 48 Back

9   Qq 58-59 Back

10   Qq 45-47 Back

11   Qq 49-53  Back

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© Parliamentary copyright 2012
Prepared 16 October 2012