Public AdministrationWritten evidence submitted by Project Management Institute (PROC 35)

About PMI

1. The Project Management Institute (PMI) is the largest project management member association in the world, and the leading global advocate for the project and programme management profession. With a global vision that organisations will embrace, value and utilise project management and attribute their success to it, we currently have over 700,000 members and credential holders in 185 countries across Europe, North and Latin America, Australasia and South East Asia, working across the public and private sectors to undertake certification, standards development and training.

2. PMI has over 6,000 members and credential holders in the UK, and have run academic programmes at universities including Cranfield, Southampton, Manchester, UCL, UWE and Strathclyde. We also host regular executive roundtables in London, bringing together representatives of the public and private sectors to share project and programme management best practice. We are a proud sponsor of the Project and Programme Management Award at the annual Civil Service Awards. We will also be investing in research this year to identify factors contributing to project and programme success in the UK public sector.

Project Management as a Driver of Contract Efficiency

3. PMI’s global research and experience demonstrates that effective project management can improve service delivery, minimise costs and manage risks. The key to this in our experience is the development of a culture of best in class project management. Effective project and programme management (PPM) can help to greatly improve efficiency and drive down costs for government departments that manage large and complex programmes.

4. The benefits are clear to see in projects that have been executed properly across the world. The US Army Corps of Engineers, for example, reported a cost reduction of 20–30% by using trained project managers and a more systematic approach to project management. Successful delivery of the capital infrastructure for the Olympic Games is another case in point.

5. Project failure also has severe consequences. When a project fails, around 17% of the budget is lost for good according to PMI research. When project timelines are not met, when budgets are exceeded or when intended project goals are not fulfilled, unintended demands are placed on other resources—people, projects, products, budgets and overall organisational goals. This is money that an organisation can never get back.

6. The United Kingdom has made good progress in improving its project management capability and performance in recent years. The creation of the Major Projects Authority and the Major Projects Leadership Academy are both to be welcomed. However, overall performance remains patchy and there is still some way to go.

Key Issues

7. There are a number of key issues that continue to impact on project success.

8. High staff turnover continues to be a problem, especially at the level of Senior Responsible Owner. This is exacerbated by the fact that civil servants move position regularly and do not see projects through to their conclusion. Whilst the Civil Service Reform Plan and the Defence Reform Unit’s 2011 report identified this as a problem, high churn has nevertheless continued.

9. There continues to be a shortage of dedicated project managers with strong global experience. The Civil Service Reform Plan notes that “There are some superb project managers in the Civil Service, but not nearly enough and too many projects fail.”

10. Furthermore, the majority of UK-based project management qualifications do not include a requirement for ongoing assessment, meaning that many of the civil servants with the qualification have little incentive to keep their knowledge up-to-date. PMI would argue that training should be at least in line with the provisions of its Project Management Professional (PMP®) credential, which requires ongoing maintenance over a three year cycle, and three to five years of dedicated project management experience. As a general principle, performance should be regularly reviewed and project managers should be assessed on their experience and track record of actual projects, not purely on the basis of theoretical examinations.

11. In addition, there have been particular issues with some very capable civil service leaders not having the necessary skills to manage projects or contracts, but being moved into project delivery positions as part of their civil service careers. This is neither desirable nor sustainable.

12. However, even when effective teams are in place, it is difficult for the public sector to compete on salary terms with private sector organisations that are willing to pay higher salaries to project managers. The combination of this with the freezing of expenditure on consultancy across government runs the risk of squeezing project management capability and capacity.

13. The lack of resources dedicated to the assurance function within the Major Projects Authority is another concern. This is an issue that was recently highlighted by the National Audit Office and the Public Accounts Committee in their reports on assurance of major projects (HC1698 2010–12 and HC384 2012–13). The report commented:

“With a budget of £6 million and a 40% cut in staffing there are inevitably questions over whether [the MPA] can achieve the improvements intended. Inevitably, the Authority has to focus on the biggest, most risky projects. This raises the risk that significant problems within lower priority projects in the Authority’s portfolio may be missed.”

14. In oral evidence to the committee, Marc van Grondelle of KPMG also contrasted the amount spent on assurance in the private sector with the amount being spent in the UK public sector, commenting that for major capital projects, it is usual for between 0.2% and 0.5% of the total project cost to be spent on assurance (question 3, Ev 2, HC 384 2012–13). This contrasts with the £6 million budget of the MPA to monitor over 200 projects worth £376 billion—which amounts to only .016% (page 3, HC384).

15. An issue that has arisen repeatedly in PMI’s UK executive roundtables is attitude to risk, and ways of dealing with risk effectively. The public sector is often too cautious, and this adds time and cost to projects. The prevailing job climate within the Civil Service also makes it less likely that officials will take risks and put their heads above the parapet. The impact of political drivers on project scope should also not be underestimated. Effective project management can reduce risk: PMI’s 2013 Pulse of the Profession report, published in March, found that globally organisations with high performance in meeting project goals, timelines and budgets risk only £20 million per £1 billion spent, whilst their less successful peers jeopardise £280 million for the same £1 billion.


16. The MPA and MPLA have already made progress. We would also recommend that government consider the following:

Government should be looking more at international best practice across both the public and private sectors. International standards, secondments and networking events all form part of this exchange process. The committee has already taken evidence from Lieutenant Colonel Dan Ward of the USAF on the FIST approach. As mentioned, PMI holds regular executive roundtables, run on Chatham House rules, pulling together the public and private sectors to exchange information and best practice. We would be very happy for the committee to address or attend one of these in future.

Government should consider implementing the IT Program Management Job Classification introduced in the US Federal Government, completed through PMI advice to the Office of Management and Budget and the US Federal Government CIO. The benefits flowing from this demonstrate why similar initiatives should be adopted elsewhere—a dedicated cadre of project managers with expertise and experience, a reduction in the “accidental project manager” phenomenon and better project results in the long term—dedicated project managers rather than people doing project management as part of their civil service tour of duty.

The Cabinet Office should consider introducing something similar to the US Federal Government’s IT Dashboard, a public website providing information on all IT investments across the Federal Government. This provides visibility into the operations and performance of Federal IT investments and allows people to see how and where money is being spent in IT. Information on cost, schedule, operational performance and CIO evaluation are updated every month.

Consideration should also be given to the creation of a specific Project Management Fast Stream within the civil service to complement the existing five specialist fast streams. This would be open to individuals with proven interest and expertise in project management, and would ensure that those with the right skills and aptitudes to become project managers are nurtured from an early stage.

Ministerial toolkit: Public comments by ministers, sometimes delivered in the heat of the moment on the campaign trail or in television studios, often drive the demand for projects. As the 2015 General Election draws closer, politics will become increasingly important in programme delivery—and demand for new projects and programmes will increase, despite the tough fiscal conditions. Increasing ministerial awareness across the board, and providing basic training could help address this.

Improving attitudes to risk: Attitudes to risk are critical to project success, as discussed above. A possible solution discussed at previous PMI roundtables is the creation of a joint risk registry between the stakeholder and the contractor. Investment in success is shared, and the culture is transformed as the customer is part of the team. Government needs to export a certain amount of risk to its private sector partners, but is often reluctant to do so. The role of the contract is also important—the contract should not drive every discussion between contractor and client, but should only be resorted to in select situations.

More funds should also be dedicated to project management assurance. This will be a difficult sell politically—but would result in savings in the medium to long term as more projects came in on time and on budget.

March 2013

Prepared 18th July 2013