Conclusions and recommendations
1. The MPA was established in March 2011 as a
partnership between the Cabinet Office and HM Treasury with a
Prime Ministerial mandate to improve project delivery across government
through robust assurance measures. Since then the MPA has developed
a range of interventions to give assurance over government major
projects and to support HM Treasury approval and funding decisions.
It has also established the Major Projects Leadership Academy
to train senior project leaders in the civil service. In September
2013, the Government Major Projects Portfolio consisted of 199
major projects covering a wide range of activities, from transforming
how departments do their work to building ships and motorways.
These projects represent a considerable and rising cost to the
taxpayer: the MPA reported in May 2014 that the whole-life cost
of these projects was £488 billion, an increase of some £134
billion on the previous year.
2. The MPA is unlikely to achieve a systemic
improvement in project management without stronger, more formal
mechanisms for driving change. At present, the Treasury does
take account of MPA recommendations when making spending decisions,
but it is under no formal obligation to follow them. Equally,
the MPA often has to rely on personal credibility and informal
influence, rather than having formal mechanisms, to get its voice
heard in its work with departments. For example, the MPA is helping
with recruitment for leadership positions on several major projects,
but only on an ad hoc basis and told us that its role is not yet
'systematised'. This lack of formal powers reduces the influence
of the MPA with the Treasury and with departments, limiting its
ability to drive improvements in project management.
Recommendation: The Chief Executive of the
MPA should have a formal mechanism available, equivalent to an
Accounting Officer letter of direction, to set out his position
if a project proceeds contrary to MPA advice to cancel or re-scope.
More generally, where ministers or officials reject MPA recommendations,
there should be a formal and transparent process in place to document
this.
3. The MPA provides welcome visibility of
the Government Major Projects Portfolio, but despite the scale
and the cumulative risk to the taxpayer, it is managed as a series
of individual projects rather than a portfolio. Although we
have previously recommended that major project data should be
used to manage spending and prioritise resources between projects,
nobody in central government is responsible for overseeing projects
at a strategic whole-of-government level. The value of the portfolio
grew by £134 billion between September 2012 and September
2013, but much more could be done to assess and manage the increased
level of risk this exposes government to, including to identify
areas where too many projects are underway and departments may
be struggling to cope.
Recommendation: The Treasury should take
ownership and responsibility for overseeing the government portfolio.
It should ensure that decisions about whether, and how, individual
projects should proceed are based on each project's impact on
the total portfolio's value and risk, and the relevant department's
delivery capability and existing portfolio of projects.
4. The MPA could increase its impact by prioritising
its assurance work more effectively. The lack of robust planning
in the concept, design and business case stages of projects has
been a serious issue with government major projects for many years
and exacerbates problems during project implementation. The two
red-rated IT projects at the Department of Health are good examples
of where the effects of past poor planning are still felt today.
The MPA has introduced Project Validation Reviews to strengthen
its assurance work at the early stages of projects. However, it
acknowledges that more needs to be done to "work the front
end harder". It is also notable that some departments have
significantly worse delivery confidence ratings across their projects
than others and these would benefit the most from MPA interventions.
For example, the Department of Health has 2 red and 9 amber-red
rated projects, while the Ministry of Defence has 1 red and 6
amber-red rated projects.
Recommendation: The MPA should work with
departments to improve their project planning, and ensure that
they have devoted sufficient attention to the planning phase before
seeking project approval. The MPA should pay particular attention
to departments with challenging, high-risk portfolios of major
projects, such as the Department of Health and Ministry of Defence.
5. The Major Projects Leadership Academy (MPLA)
is a welcome development but there is scope for it to target top
decision-makers as well as project managers. The MPLA is currently
focusing its efforts on training Senior Responsible Owners (SROs)
and programme directors. It has already trained 200 of these,
and by the end of 2014 expects all government project leaders
to have taken part in its training. Two ministers have attended
half-day or full-day courses on project management run by the
MPA and found it helpful. It would be beneficial to extend this
support more widely, as it would help to develop greater awareness
of project delivery issues at the highest decision-making levels
in government.
Recommendation: The MPA should develop and
implement a tailored approach to improving the project delivery
skills and awareness of ministers, shadow ministers, and permanent
secretaries.
6. The MPA's assessment of major projects
does not cover value for money considerations. The value for
money of projects is considered by the Treasury when assessing
project business cases, but there is little monitoring of the
issue once projects are being implemented. At present, the MPA
reviews focus primarily on the budget and timetable of projects.
The lack of scrutiny has allowed projects
which achieved poor value for money, such as the sale of Royal
Mail and the awarding of the rural broadband contract, to proceed
without challenge. The MPA Chief Executive acknowledged that value
for money was not 'front and centre' for the MPA, and agreed with
us that it should be an integral part of reviews.
Recommendation: The MPA assessment should
include explicit consideration of whether the project is likely
to deliver good value for money, alongside its existing assessment
criteria.
7. Despite welcome progress in extending the
range of information published, the data is infrequent and out-of-date,
and too much is still withheld. The MPA's second annual report
was a significant improvement on the first, with 30% less data
withheld and more analysis provided. However, too much data is
still missing. We are particularly concerned that the decision
to award a 'reset' rating to the Universal Credit project was
an attempt to keep information secret and prevent scrutiny. The
Government's transparency policy is too restrictive as it prevents
useful data sets, such as the amount spent so far, from being
published and stipulates that major project data can only be published
once a year. This is too infrequent and means that the data available
on high-profile, high-cost projects can be significantly out-of-date.
Recommendation: The MPA should publish project
data more frequently and continue its efforts to reduce the amount
of data exempted from publication. The MPA should publish more
information on each project, including spend-to-date, even if
this means reviewing the government's transparency policy.
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