1 Assurance over the government
major project portfolio
1. On the basis of two reports by the Comptroller
and Auditor General, we took evidence from the Major Projects
Authority (the MPA) on the Government Major Projects Portfolio
and the MPA's role in project assurance.[1]
The Major Projects Authority 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.[2]
2. The MPA published its first annual report in May
2013. Although this was significantly later than planned, the
NAO noted that it was an important step in improving the transparency
of major project data as comprehensive information on the portfolio
had not been published together before.[3]
The MPA published its second annual report, which included greater
analysis of major project data, on 23 May 2014.[4]
The NAO reported that the MPA had made further progress in strengthening
project assurance procedures and improving the transparency of
information on the cost, deliverability and performance of government
projects.[5]
3. At September 2013, the latest date for which data
is available publicly, the Government Major Projects Portfolio
consisted of 199 major projects. The total whole-life cost of
these was £488 billion (which includes £60 billion of
"non-government expenditure"), an increase of some £134
billion, or 38%, on that reported in the previous year. There
was considerable change in the portfolio between September 2012
and September 2013, with 39 projects leaving and 47 new projects
joining.[6]
4. We recommended in our October 2012 report that
"The Authority's reviews should clearly set out whether the
project should continue, be stopped or reset, and the Treasury
should ensure the recommendation is adhered to".[7]
The Government accepted this recommendation in its Treasury Minute
response to us.[8] But
the NAO has subsequently reported "HM Treasury does not want
the Authority's recommendations on stopping and pausing projects
to be considered binding because this would limit the ability
of elected ministers to make decisions. Instead, the Authority
and the Treasury have established a process to ensure that all
Major Projects Review Group recommendations (including to cancel,
defer or re-scope projects) are provided directly to the Chief
Secretary to the Treasury as formal advice to inform spending
decisions."[9]
5. The MPA told us that its recommendations have
resulted in a significant number of projects being re-scoped and
a small number cancelled. The MPA gave the red-rated Information
Systems and Operational Technology (ISOT) project at the National
Crime Agency as a concrete example of a struggling project that
had been re-scoped as a result of the MPA's work.[10]
The MPA argued that, while central assurance functions should
be strengthened and its recommendations listened to, any changes
must ensure that accountability for projects remains with ministers,
accounting officers and Senior Responsible Owners (SROs), and
is not diluted.[11]
6. The MPA does possess a number of formal powers,
but it told us that it often relies on informal means and "personal
credibility" to get its voice heard.[12]
The MPA confirmed that it had, on occasion, recommended that project
leaders be moved and is currently involved in several recruitment
exercises for SRO vacancies. However, according to the MPA, its
role in this area has yet to be "systematised".[13]
The MPA also told us that it had completed 28 "assurance
of action plans", which follow on from its regular assurance
reviews and ensure that departments have acted upon the recommendations.
Of these 28, the MPA told us that its assessment of delivery confidence
rose quickly on 11 of these projects as a result of implementing
its recommendations, and that delivery confidence remained unchanged
at the overall level on 16 projects. One project declined in delivery
confidence and as a result was fundamentally re-scoped.[14]
7. We concluded in our October 2012 report that "HM
Treasury is not making best use of the data on major projects
that is now available to manage the government's financial position."
and recommended that it "should routinely use the Authority's
data on the major projects portfolio to manage its spending and
prioritise resources between projects."[15]
In its February 2014 report the NAO reviewed progress against
this recommendation and concluded that the Treasury and other
central bodies, such as Infrastructure UK, were making some limited
use of the portfolio data. However, this fell well short of strategic,
portfolio-level prioritisation.[16]
8. At the same time as the Government Major Projects
Portfolio has grown, the MPA's assessment of the deliverability
of the portfolio has worsened significantly. It attributed this
deterioration in delivery confidence to the 39 projects leaving
the portfolio and 47 new projects joining during the year. The
MPA stated that new projects generally receive lower delivery
confidence ratings as "they are still working through the
process of identifying solutions to the challenges that they inevitably
face".[17] The NAO's
analysis shows that in terms of whole-life cost, the MPA rated
well over a fifth of the portfolio by value as amber-red or red
by September 2013.[18]
9. The MPA confirmed that an increasing number of
"transformational projects", where departments are looking
to change the way they work, often by introducing new IT systems,
is driving much of the growth in the portfolio. The MPA told us
that this type of project is not doing as well because "they
are more difficult to do, they involve changing how people work
and they usually involve way more leadership and management than
people anticipate going in."[19]
The MPA told us that there was a lack of "strategic prioritisation"
across the portfolio, and that "you wouldn't do all this
in a business; you would prioritise this in a different way."
The C&AG told us that he sees departments struggling with
the volume of business and big projects that they are trying to
carry out, and has not seen a department ever saying "We
can't do this. We just don't have the troops on the ground."
He also highlighted the need for more clearly prioritised overall
portfolio management.[20]
10. The MPA established the Major Projects Leadership
Academy (MPLA) in 2012, in partnership with the Said Business
School, to provide training for government project managers. The
MPA reported that 200 project leaders have so far taken part in
training and that all eligible managers should have started or
completed the programme by the end of 2014. According to the MPA,
the feedback received from participants has been positive and
has already had an impact on the projects they are working on.[21]
11. The MPA told us that it wanted to get more project
leaders through the Academy, and to develop this further to offer
shorter training courses.[22]
The MPA told us that, some time ago, two government ministers
attended a day or half-day of MPLA training. Although this training
was well-received, it has not been widened out to other ministers.[23]
The MPA's aim with this training is primarily to raise awareness
of project management and provide helpful insights into the key
issues major projects face.[24]
Such training would be helpful for both government ministers and
shadow ministers, most of whom have good knowledge of the policy
issues in their areas, but do not know how to deliver projects.[25]
12. More generally, the MPA told us that there was
a "lack of distributed capability across government"
when it came to managing major projects.[26]
This is particularly concerning as the MPA then told us that its
biggest lever for improving project delivery was people.[27]
In order to effectively build capability in this area, the MPA
argued that the most important factor was for people to gain experience.[28]
However, at present there is no strong, established project delivery
profession in government, a situation that the MPA described as
"unbelievable". The MPA also told us that "the
fact is that a young person coming into the civil service cannot,
because of the structures that we have got, spend their life building
delivery experience".[29]
13. MPA reviews focus primarily on whether projects
will deliver on time rather than whether they will achieve value
for money. From our experience, the Treasury also pays little
attention to value for money issues once projects are being implemented.
Its main focus is on ensuring that projects do not exceed their
allocated budget.
14. The MPA conceded that, while its reviews notionally
address value for money issues, they are not "front and centre
for us". After initially expressing caution about the MPA's
expertise to also look at value for money in its reviews, on reflection
the MPA agreed with us that value for money should be an integral
part of its reviews.[30]
1 C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, Session 2013-14, HC 1047, 4 February 2014;
and C & AG's report, Major Projects Authority Annual Report 2013-14, 2 June 2014. Back
2
C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 1. Back
3
C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 3;
and Cabinet Office, Major Projects Authority Annual Report 2012-13, May 2013. Back
4
Cabinet Office, Major Projects Authority Annual Report 2013-14, May 2014 Back
5
C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 14;
C&AG's report, Major Projects Authority Annual Report 2013-14, para 4. Back
6
Cabinet Office, Major Projects Authority Annual Report 2013-14, May 2014. Back
7
Committee of Public Accounts, Assurance for major projects, Fourteenth Report of Session 2012-13, HC 384, October 2012, conclusion 2. Back
8
HM Treasury, Treasury Minutes, Government responses on the Fourteenth, the Seventeenth to the Nineteenth, and the Twenty First reports from the Committee of Public Accounts Session: 2012-13, Cm 8556, February 2013. Back
9
C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 12. Back
10
Q 54 Back
11
Q 29 Back
12
Q 50 Back
13
Qq 66-9 Back
14
Written evidence from Major Projects Authority Back
15
Committee of Public Accounts, Assurance for major projects, October 2012, conclusion 3. Back
16
C&AG's Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 4.8. Back
17
Cabinet Office, Major Projects Authority Annual Report 2013-14, pages 6 & 12. Back
18
C&AG's Report, Major Projects Authority Annual Report 2013-14, figure 3. Back
19
Q 33 Back
20
Q 33 Back
21
Cabinet Office, Major Projects Authority Annual Report 2013-14, pages 14-15. Back
22
Q 34 Back
23
Qq 71, 74 Back
24
Q 76 Back
25
Q 77 Back
26
Q 12 Back
27
Q 57 Back
28
Q 43 Back
29
Qq 43 & 57 Back
30
Qq 60-2 Back
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