06.01.16

A third of major public sector projects could be unachievable – NAO

One-third of the public sector projects due to be delivered in the next five years –most of which are designed to entirely transform the way services are delivered or accessed – may be completely unachievable, the National Audit Office (NAO) has said.

Looking into the progress of the Whitehall major project portfolio, currently holding 149 projects, the auditor found that a large chunk is classified as either ‘red’ or ‘amber-red’. This label is given to projects where successful delivery is either unachievable or in doubt unless action is taken.

While uncertainty should reduce through a project’s lifecycle, not all ratings improve over time. Of the 56 projects that were in the Portfolio in 2012 and are still there, for example, 17 had red or amber-red ratings last year, compared to 12 in 2012.

The NAO determined that no single organisation currently has a view of the whole portfolio of government projects, confirming the public sector’s consistently poor track record in delivering projects successfully.

In the last Parliament, for example, the auditor reported regular project failures and considerable ongoing difficulties – particularly stemming from a lack of portfolio management on all levels, no data consistency with which to measure performance, poor early planning, lack of accountability and a lack of capacity to undertake a growing amount of projects.

Amyas Morse, NAO head, said: “I acknowledge that a number of positive steps have been taken by the Authority and client departments.

“At the same time, I am concerned that a third of projects monitored by the Authority are red or amber-red and the overall picture of progress on project performance is opaque. More effort is needed if the success rate of project delivery is to improve.”

Nearly 80% of projects in the current 2019-20 pipeline are considered transformational, meaning they inherently present the greatest risks of failure. More than ever, there is a need to “balance ambition and realism” when setting out goals.

The auditor cited the Better Care Fund as an example, given that its challenging nature caused ministers to redesign the system after its early planning and preparations fell short of its ultimate ambition.

Whitehall has therefore been advised to develop an effective mechanism to prioritise projects across the government or judge when a department lacks the capacity to deliver them.

A Cabinet Office spokesman gave assurances that the government is committed to improve the way major projects are run, which is why it set up the Infrastructure and Projects Authority (IPA).

The auditor did acknowledge that the IPA has taken “many positive steps” to develop capability and assurance on better project delivery, but said it is “difficult to tell whether performance is improving without reliable and consistent measures of project success”.

But the government spokesman added: “We will continue to drive for improved performance through the IPA, which will be a single centre of expertise for project development, financing, assurance and support in government.

“We value the NAO's recommendations and will consider how the IPA can best take these forward.”

Louise Hart, a former project director for the establishment of major transport infrastructure contracts in London and Sydney, has previously written for PSE about the all-too-common descent of mega-projects into chaos and how litigation can be avoided by improving procurement.

(Top image: Dragados-Sisk JV / John Zammit) 

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