Out-Law News 2 min. read

Major Projects Authority needs more powers to tackle "serious weaknesses" in ability of government to deliver projects

The Major Projects Authority (MPA) needs "more formal" powers for "driving change" if it is to be successful in improving the government's ability to deliver projects more efficiently and for lower cost, an influential committee of MPs has said.

In its latest report, the Public Accounts Committee (PAC) said that the department needed to take on more of a role at the earlier stages of a project and that it should prioritise its work more effectively, focussing on those departments with more high-risk projects. It also said that there should be a "formal and transparent" process in place to record where a government department decided to proceed with a project against MPA advice.

The MPA, which operates as a partnership between the Cabinet Office and the Treasury, was set up in March 2011 to monitor major projects and ensure better value for money for the taxpayer. As of May 2014 the value of the 199 projects overseen by the MPA was an estimated £488 billion, including high profile and "extremely challenging" projects such as Universal Credit and the delivery of two new 'Queen Elizabeth' aircraft carriers.

"We support the work of the MPA and welcome the progress it has made so far, but without stronger powers it is unlikely to achieve its aim of a systemic improvement in project delivery across government," said Margaret Hodge, chair of the PAC.

"However, the MPA only has informal influence over departments. It supports the Treasury in approval and funding decisions but there is no obligation on the Treasury to follow its recommendations. It has no powers if a department decides to proceed with a project against MPA advice. It needs to have stronger, more formal mechanisms for driving change - and there should be transparency where ministers or officials have rejected its recommendations," she said.

The PAC said that although the Treasury did take account of MPA recommendations when making spending decisions, it was under no formal obligation to follow them. At the same time, the MPA's work with the various government departments responsible for procuring projects tended to be based on personal credibility and informal influence rather than any formal mechanism. To address this, the PAC said that the MPA's chief executive should be given a formal means of setting out his position if a project proceeded against MPA advice to cancel or re-scope, while occasions where ministers or officials rejected MPA recommendations should also be documented.

At the same time, the MPA should prioritise its work in order to function more effectively, the PAC said. In particular, it should focus its efforts on those departments with "the most serious doubts over the delivery of projects" such as the Department of Health, which currently has two projects rated 'red' and two 'amber-red' on the MPA's 'traffic-light' rating system; and the Ministry of Defence, which has one red-rated and six amber-rated projects. It should also provide more support to departments when planning projects to ensure that they devote sufficient attention to the "concept, design and business case for projects before seeking approval", the PAC said.

The PAC welcomed progress made by the MPA in extending the range of information that it was able to publish in its second annual report, in which 30% less data was withheld on commercial or national security grounds than in 2013. However, it criticised the government's transparency policy as "too restrictive" as it only allowed data to be published once a year and prevented the publication of "useful data sets" such as project spend to date. This too should be reviewed, the PAC said; while the MPA's assessments should be reviewed to include value for money considerations.

In addition, the PAC said that overall responsibility for overseeing the major projects portfolio should be assigned to the Treasury, rather than treating each project as an individual scheme. This would go some way towards ensuring that decisions about "whether, and how" individual projects should proceed was 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", it said.

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