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One third of major UK public projects 'in doubt or unachievable', says NAO

Out-Law News | 07 Jan 2016 | 5:14 pm | 2 min. read

One third of major UK government projects planned for completion in the next five years are "in doubt or unachievable", according to analysis by the National Audit Office (NAO).

The finding relates to 37 out of 106 planned projects included in the government's 'Major Projects Portfolio', which lists those projects which require approval from the UK Treasury based on their size, risk and impact. Portfolio projects include major service reforms, ICT projects and infrastructure and construction projects, ranging from Universal Credit to Crossrail and the roll-out of national smart metering.

The NAO said that while the UK government had taken action to improve the oversight and delivery of projects, the "impact" of these initiatives was not yet clear due to a lack of reliable and consistent measuring. High project turnover, inconsistent reporting of costs and benefits, and limited data published by government departments in particular made it difficult to assess the success of individual projects, it said.

A new Infrastructure and Projects Authority, combining the work of the previous Major Projects Authority and Infrastructure UK, was established by the government on 1 January 2016. The new body will provide expertise and knowledge in relation to managing and delivering major projects to the government, as well as independent assurance, according to chancellor of the exchequer George Osborne.

There are currently 149 projects in the Major Projects Portfolio, including those that not expected to complete in the next five years, with a combined whole-life cost of £511 billion. The majority of this funding, £392bn, will come from the government with the remaining £119bn funded by consumers and businesses. The public sector as a whole delivers many more projects outside of the portfolio, either through individual government departments or through arm's length bodies such as Network Rail.

According to NAO analysis, 71% of the projects in the portfolio are scheduled for completion by 2019/20 and the government is expected to spend £25bn over the current financial year. However the number of projects due to complete over this time period with 'red' or 'amber-red' risk rankings had increased since 2012, partly as a reflection of the changing risk profile of the projects included in the portfolio.

"Uncertainty should reduce through the project lifecycle but not all project ratings improve over time," the NAO said.

"Nearly 80% of the portfolio projects due to be delivered by 2019/20 are to either transform or change the way that services are delivered or assessed. Transformation programmes can present the greatest risk of failure and there is a need to balance ambition and realism in setting goals," it said.

As an example, the NAO highlighted the Department of Health's 'Better Care Fund' initiative, which will create a single pooled budget for local health and social care funding. The government ultimately paused and redesigned its "challenging" plans after failures during the early planning and preparation stages, it said.

"I acknowledge that a number of positive steps have been taken by the [Infrastructure and Projects Authority] and client departments," said NAO head Amyas Morse.

"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," he said.