Source · Select Committees · Transport Committee
Recommendation 11
11
Accepted in Part
Implement robust measures to assess deliverability and anticipate risks in future RIS portfolios
Recommendation
The Government should implement more robust and transparent measures to assess deliverability when setting a RIS so that a wider range of stakeholders can flag risks to completing projects on time. We are scrutinising the draft revised National Networks National Policy Statement in a separate inquiry, but regardless of what framework is in place, the Department clearly needs to ensure its proposals are robust enough to stand up to scrutiny and challenge against that framework. The Department must also produce a plan for how it will better anticipate, assess and deal with risks to timely delivery, and ensure projects remain on budget and good value for money. (Paragraph 54) Engagement with sub-national transport bodies
Government Response Summary
The government partially agrees, stating that existing expert involvement (ORR, IPA) is adequate for assessing deliverability. It commits to continue managing portfolio and project risks, citing existing action plans for DCO risks and mitigation strategies for inflation.
Government Response
Accepted in Part
HM Government
Accepted in Part
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. 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.