Expert welcomes "more transparency" on major projects as report shows 31 schemes in doubt

Out-Law News | 29 May 2013 | 2:13 pm | 2 min. read

"Urgent action" is required by Government to ensure that some of its highest profile projects proceed as planned, according to the first review of its most expensive and important schemes.

High Speed 2, the refranchising of the Thameslink, Southern and Great Northern rail lines and the national broadband delivery programme are among 23 projects rated "amber/red" by the Major Projects Authority (MPA) in its annual report, indicating that "successful delivery is in doubt". Eight projects, including the refranchising of the West Coast Main Line franchise and the delivery of two new aircraft carriers, are rated "red" for "unachievable".

The MPA was set up in 2010 to monitor major projects and ensure better value for money for the taxpayer. It operates as a partnership between the Cabinet Office and the Treasury, and has extensive project managing powers including the ability to re-scope or close failing schemes. The MPA currently oversees 191 projects worth an estimated £350 billion, and has delivered savings to the taxpayer of over £1.7bn since it was established, according to its figures.

Projects expert Chris Hallam of Pinsent Masons, the law firm behind, said that the establishment of the MPA had resulted in "more transparency" for public procurement projects.

"In his foreword to its first annual report, Cabinet Office Minister Francis Maude praises the MPA for the £1.7bn or so it has saved the taxpayer to date," he said. "At the equivalent of £100 for each working household in the country, that's not to be sniffed at. Of course, it could equally be read as an indictment of how these projects have been managed in the past."

"The report, on the whole, is to be welcomed: it is refreshing to see a greater level of transparency for major projects procurement. That said, it is hoped that the departments responsible for the 31 red and red/amber projects are able to get their act in order and deliver these schemes - the UK construction industry in particular is relying on them to do so," he said.

The report covers all the Government's major projects, including its welfare reform and IT procurement programmes as well as infrastructure projects. It uses a red-amber-green (RAG) 'traffic light' system to rate the likelihood of each project meeting time, budget and quality requirements. The ratings relate to the status of the projects six months ago, to take into account the sensitivity of project data.

Of the 191 projects assessed, 32 were rated "green" for "highly likely" successful completion. Another 49 were rated "amber/green", meaning that success is "probable" while another 58 were classes as "amber" where success is "feasible" but significant issues exist. Classification of a further 21 projects "with RAG ratings spread across the scale" was not disclosed due to commercial or national security concerns.

Although the Government had made "significant progress" since 2010, a number of issues needed to be addressed, the MPA said. It particularly highlighted varied approaches to project management, reactive decision-making and lack of effective planning as areas needing to be addressed.

"Our key concern is the operating environment in which projects are managed," the MPA said in its report. "Project policy and project delivery have often been disconnected. This means that decisions about what projects are expected to achieve have been made without proper attention to critical planning, resource allocation and governance arrangements."

"We have also been surprised by the poor quality of project data which is collected and recorded. This has been an impediment to effective assurance and also means that mistakes are being repeated because lessons are not being recorded and shared," it said.

The department planned to develop a standardised portfolio management system to be used across Government, it said. It was also examining the potential use of the Olympic Learning Legacy website as "a central archive for project data", it said.

The MPA also plans to develop its Major Projects Leadership Academy (MPLA) partnership with Oxford's Saϊd Business School and Deloitte, it said.