Recommendation 6

HM Government Accepted

The Government partially agrees with this recommendation. The existing range of experts involved in the development and setting of a RIS are considered adequate and appropriate. The ORR has a role as the Highways Monitor, defined within the Infrastructure Act 2015. The Highways Monitor is independent of the Department for Transport and reports to Parliament and the public5. A core activity of the Monitor includes providing advice to the Secretary of State to support the setting of a RIS, including advice to confirm that a developing proposition remains deliverable and challenging. This brings unprecedented transparency to the setting of a RIS and the performance of National Highways. The IPA is the Government’s centre of expertise for infrastructure and major projects, reporting to the Cabinet Office and HM Treasury. The IPA core teams include experts in all elements of project delivery, project finance and project profession capability who work with government departments and industry. The IPA undertook a delivery review of the plans for RIS2. We plan to engage the IPA in a similar delivery review for RIS3. Neither the ORR nor the IPA suggested that any fundamental changes were needed to the RIS2 proposed approach or the balance of risk versus deliverability. Nonetheless, the overall governance of RIS2 has been strengthened both in planning and managing the portfolio since the first RIS. This includes enhanced change control mechanisms and risk management, with specific requirements for Tier 1 schemes, and independent assurance. National Highways also introduced a contingency budget (central risk reserve) in RIS2 to manage portfolio-level risks. The Government and National Highways have developed strong governance arrangements between the Government (client) and the delivery body (National Highways) to monitor, manage and report portfolio-level risks to senior levels in both organisations. 5 https://www.gov.uk/government/publications/highways-monitor-memorandum-of-understanding The ORR independently monitors National Highways’ performance and delivery. The current approach places significant emphasis on the delivery of enhancement scheme commitments. In the delivery of RIS2, where unexpected changes have occurred, the Government and National Highways understand the reasons and have taken action to develop plans to mitigate remaining risks. For example, when DCO risks materialised as a portfolio issue in 2021, the Government and National Highways agreed and began implementing an action plan to fully understand and mitigate the risks to successful development consent orders. This action plan has proved to be beneficial when reviewed in 2023 and has been updated to respond to the latest DCO risks. We accept the need to continue to manage portfolio and project risks to ensure project delivery and good value for money. The most significant risks to the delivery of the portfolio, for the remainder of RIS2, are the impact of legal challenges to DCOs and the impact of inflation on the affordability of the programme, which the Government and National Highways have robust plans in place to mitigate.