Government’s £376bn project spend needs more assurance, says NAO

The National Audit Office (NAO) says government must produce transparent data if the £376bn cost of public sector projects is to be spent effectively

Government departments must produce transparent data if the £376bn cost of its current major projects is to be spent effectively, the National Audit Office has said.

In its report, Assurance for Major Projects, the National Audit Office (NAO) praised the work of the Major Project Authority (MPA), created in April 2011 to improve central government’s poor track record in delivering large projects. The decision to dismantle the National Programme for IT in the NHS was taken after it was reviewed by the authority, for example.

However, the NAO said the assurance system is not yet built to last. “Processes need to be formalised, and the authority, HM Treasury and departments need to co-operate more if these improvements are to continue. Transparent reporting of project data would also create a more effective and enduring system,” the NAO said.

Of the 205 projects in the government Major Project Portfolio – worth a total £376bn and £14.6bn annually – 39 have a delivery confidence rating of "red" or "amber/red", said the report.

But earlier this year, David Pitchford, executive director of the MPA, said just half of those projects are being delivered effectively, on time and on budget. 

Pitchford told Computer Weekly that all major projects under review by the authority could be classed as IT projects, with technology acting as a key enabler.

The NAO report found just five departments accounted for 91% of the whole-life costs of major projects underway. It found the Ministry of Defence took the lion's share of spending, with £146bn on 72 projects; followed by the Department of Energy and Climate Change, with £111bn on nine projects; the Department for Transport spending £44bn on 12 projects; the Department for Work and Pensions with £27bn on eight  projects; and the Department for Health with £17bn on 23 projects.

The NAO said reporting project information publicly provides greater accountability for projects and helps improve outcomes. Regular transparent reporting of performance also encourages engagement with the system by highlighting its successes as well as any instances of non-compliance. 

“However, although discussions are under way, Cabinet Office, HM Treasury and departments have not agreed on the format for public reports, or whether to publish them at all,” said the NAO report.

Amyas Morse, head of the NAO, said: “We support government’s ambition to eradicate the poor performance which has led in the past to the failure of major projects. 

"The launch of the Major Projects Authority was a big step forward for the central assurance system and the authority is already having a significant effect."

Morse added: “If the new system is to be ‘built to last’, the Major Projects Authority needs to carry out the initial commitments to public reporting and be part of a more fully integrated assurance across government.”


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