Delivering major projects: the future

In its report, the NAO rightly points to the fact that progress has been made on many key areas of major project oversight and delivery in the last few years, highlighting in particular the role of the Major Projects Authority (MPA) – now the Infrastructure and Major Projects Authority (IPA). The improvements it has driven include: the development of a more demanding assurance process; investments in capability – all senior officials responsible for major projects (known as SROs) in the portfolio are required to have completed training at the Major Projects Leadership Academy; and more effective strategic oversight – the MPA was increasingly acting as a broker for the spread of experience and skills across government, ensuring that those with major projects experience are able to share their expertise.

As the MPA now becomes the IPA, there is a clear opportunity to make further improvements to the role of the body charged with strategic oversight of government’s major projects.

The core recommendations of the NAO report provide a useful guide to the IPA’s priorities, highlighting the need for better scrutiny and testing of project plans before firm commitments are made on cost or timescale, and the need to prioritise projects according to strategic importance – ensuring that capability is deployed to the highest priority areas. Both these points are key areas where Whitehall needs to up its game to successfully deliver the Spending Review. Many of the report’s messages reflect findings from the Institute’s own research in this area – from the need for effective portfolio management to the importance of clear leadership and accountability of major projects.

The rich data sets released alongside the MPA annual report allow us to visualise the size, scope and performance of major projects in government: a significant transparency measure. But the NAO points out – as we did last July – that there are limitations in how far the published data sets can be used to assess the performance of government: for example, costs are reported sometimes in real and sometimes in nominal terms, and data on benefits is not published. Continued work by the IPA to improve the comprehensiveness and accuracy of these releases will bolster their credibility as an effective force for improving government performance.

The coverage of the report, in line with the NAO’s press release, has tended to focus on the number of projects rated as red or amber-red (37 out of 106). But the MPA was set up with the purpose of overseeing some of the Government’s most risky major projects, so these ratings don’t reveal much – except that government is doing a lot of risky projects and needs to get a grip on this. The Chief Executive of the Civil Service, John Manzoni – who was previously head of the MPA – has said repeatedly that “we’re doing too much for the resources we have.” While the IPA can support the process of prioritisation, these are ultimately decisions for ministers. The Institute has argued that the existing portfolio of major projects should be reduced, but it is not clear that this has happened to make way for new commitments set out in the Spending Review.

The report also refers to the need to manage risk better. The NAO’s focus is on better preparation before projects are launched. This is important. But it is not sufficient: no amount of planning can eliminate uncertainty and the need to adapt as projects progress. Phasing the implementation of programmes and projects so there is an opportunity to learn and change course is essential, as our case studies of successful implementation have shown.

This is particularly the case given that fewer of the projects are large capital projects, for which requirements can be set well in advance. In fact, 95 of 140 projects in the portfolio are now categorised as transformation, ICT or service delivery projects, which particularly require an adaptive approach to meet customer needs and manage risk. A phased approach to more projects also allows a more flexible approach to prioritisation: part of the reason the Government does too much is that it gets locked into projects for long periods. It would be better to see the first phase of a project as an opportunity to learn whether further investment is justified, or a project should be rescoped or closed. Getting this right requires experienced SROs – which, as the NAO has shown, are in short supply.