Summary
The Government has promised the largest investment in infrastructure for decades. The £640bn promised in the Budget speech1 and £5bn2 of Coronavirus “bounce-back”3 investment is earmarked for transport, schools, housing and other key infrastructure across the country. The Government hopes that this will boost growth and lead to a “levelling up” of the national economy. However, this investment needs to be well thought through, responsive to local need, and delivered through effective, efficient and transparent major projects if it is to achieve those aims. Importantly, it should not be invested too quickly and without due consideration of its purpose.
This Report considers how the Government should run its projects with a focus on its economic and “levelling up” goals. It finds that:
- The Government needs to define what it means by “levelling up” and set out a coherent plan for co-ordinated infrastructure investment that will deliver long-term benefits. The Committee calls on the Government to publish its infrastructure strategy as soon as possible. The Government also needs to complete the promised update to the HM Treasury Green Book so that investment can be appraised within that new framework.
- Individual projects should be set up and run with a focus on achieving stated benefits. The benefits stated at the outset of the project are the very reason that spending on that project was justified in the first place. Too often, projects set out to achieve benefits that transpire to be unrealistic, and as those projects progress the focus shifts from the benefits to time and cost. A project cannot be deemed to be successful, even if it completes on time and within budget, if it does not achieve what it set out to do. The Committee has called for a greater focus on benefits, better reporting of benefits throughout the life of a project, and proper follow-up after completion.
- Often project managers and ministers commit to estimates of time, costs and benefits too early that later transpire to have been optimistic or unachievable. These early estimates can shape a whole project and lead to reductions in benefits as project managers struggle to deliver what was promised. The Committee believes that more time should be invested in the early work, including on the business case, before announcements are made. Estimated costs should also be considered in ranges, which allow for risks to be taken into account.
- Local people must be consulted about major infrastructure being built in their area, and this should happen during decision making and not after.
- It is clear that the Civil Service needs the right people with the right skills to deliver these major projects. The Committee welcomes efforts that have been made within the project management function to upskill, but the Government must consider whether a separate and more competitive pay-scale would be feasible to retain people throughout the life of the project.
- Poor ministerial decisions, with a focus on short-term goals, can undermine projects and lead to longer-term costs. The Committee welcomes the new training programme for ministers and asks that all new ministers with major projects within their portfolios undertake this training early in their tenure.
- Transparent and accurate reporting of project data is essential for parliamentarians and local people to hold the Government to account for delivering against its promises. The Committee would like to see better and more timely data, with a focus on benefits-realisation.
Major projects remain the primary mechanism through which each Government delivers the major changes it promised. The Government must take the steps recommended in this Report if we are to see lasting benefits of its infrastructure investment.
1 HM Treasury and the Rishi Sunak, Budget Speech 2020, HC Deb 679 Col 279 11 March 2020
2 HM Treasury and the Rishi Sunak, A Plan for Jobs 2020 speech as delivered by Chancellor Rishi Sunak, HC Deb 8 July 2020 Vol 678 Col 973
3 Q64
Published: 28 July 2020