Select committee inquiry
Major Projects Authority
Closed
What the inquiry looked at
“Background The Major Projects Authority was established in March 2011 with a mandate to improve project delivery across government through robust assurance processes. Since then, the Authority has developed a range of interventions to give assurance over government major projects and to support HM Treasury approval and funding decisions. The Authority won the Public Accounts Committee award for Outstanding Value for Money in 2013. The Major Projects Authority is responsible for providing assurance over the Government Major Projects Portfolio, which consists of 199 major projects with total lifetime costs in excess of £400 billion. The Authority has published two annual reports; (for 2012-13) in May 2013 and (for 2013-14) in May 2014. This inquiry will look at the status of projects within the government major projects portfolio, assess how the Authority is addressing the Committee’s recommendations in the 2012 report Assurance for major projects, and those made by Lord Browne, in key areas such as strengthening government project delivery; and examine how far the Authority’s annual reports satisfy the Committee’s call for ‘complete and transparent disclosure’ of project information. Further information National Audit Office report: Major Projects Authority Annual Report 2012-13 and government project assurance National Audit Office report: Major Projects Authority Annual Report 2013-14”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 47th Report - Major Projects Report 2014 and the Equipment Plan 2014 to 2024, and reforming defence acquisition ↗
We welcome the progress made by the Ministry of Defence (the Department) in getting to grips with its budget and military equipment costs. The affordability of the Department’s 10-year plan for buying and supporting equipment is, however, dependent on it:
continuing to control cost increases in existing equipment projects; delivering ambitious project cost savings over the next 10 years in order to balance its budget; and having the right skills in place to ensure that the assumptions made in its plans are robust and deliverable. Failure to improve the skills of Defence Equipment and Support (DE&S), which buys and maintains military equipment, will undermine the Department’s efforts to improve control over its finances. The Department agrees that DE&S is over-reliant on expensive contractors and DE&S is spending a further £250 million on contractors over the next three and a half years to determine how it will address this and secure the skills needed to deliver the Equipment Plan within the assumed budget and to time.
There remain risks to the success of the Department’s Army 2020 programme designed to reduce the size of the regular Army and increase the number of trained Army reserves. The Department has not yet addressed our previous recommendations to develop credible contingency plans in the event that it cannot recruit the number of regular and reserve soldiers it requires. While the Department is reporting progress against its recruitment targets, it does acknowledge that targets beyond 2016 will be challenging and require significant improvements in performance.
In the committee's words, from the summary of 10th Report - Major Projects Authority ↗
We support the work of the Major Projects Authority (MPA) and recognise the progress it has made in strengthening project assurance and improving the transparency of information on the costs, risks and performance of government major projects. However, it faces significant challenges in achieving further improvements because there are still serious weaknesses in government’s project delivery capability and its portfolio of projects is rapidly increasing in size. There is still a lack of prioritisation and portfolio management at both a departmental and a cross-government level. The MPA is currently involved in many aspects of project management but in certain areas, such as ensuring departments act on its advice or in recruiting leaders for major projects, it is constrained by having to rely too heavily on informal means to influence departments.
What the government said
47th Report - Major Projects Report 2014 and the Equipment Plan 2014 to 2024, and reforming defence acquisition
No government response is linked to this report.
10th Report - Major Projects Authority
The government responded on 15 December 2014.
Major Projects Authority: Government response to the Committee's Tenth Report of Sessin 2014-15
Major Projects Authority: Government response to the Committee's Tenth Report of Sessin 2014-15, 13 January 2015.
Major Projects Authority: Government response to the Committee's Tenth Report of Session 2014-15
Major Projects Authority: Government response to the Committee's Tenth Report of Session 2014-15, 15 December 2014.
Read the government's response: Major Projects Authority: Government re… ↗Read the government's response: Major Projects Authority: Government re… ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 8 April 2014 to 20 March 2015.
- Oral evidence 5 Jun 2014
- Report 2 reports
- Government response 2 responses
What it recommended 2 recommendations · 18 conclusions
1The MPA was established in March 2011 as a partnership between the Cabinet Office and...
Concluded (the committee's words)
The MPA was established in March 2011 as a partnership between the Cabinet Office and HM Treasury with a Prime Ministerial mandate to improve project delivery across government through robust assurance measures. Since then the MPA has developed a range of interventions to give assurance over government major projects and to support HM Treasury approval and funding decisions. It has also established the Major Projects Leadership Academy to train senior project leaders in the civil service. In September 2013, the Government Major Projects Portfolio consisted of 199 major projects covering a wide range of activities, from transforming how departments do their work to building ships and motorways. These projects represent a considerable and rising cost to the taxpayer: the MPA reported in May 2014 that the whole-life cost of these projects was £488 billion, an increase of some £134 billion on the previous year.
2The MPA is unlikely to achieve a systemic improvement in project management without stronger, more...
Concluded (the committee's words)
The MPA is unlikely to achieve a systemic improvement in project management without stronger, more formal mechanisms for driving change. At present, the Treasury does take account of MPA recommendations when making spending decisions, but it is under no formal obligation to follow them. Equally, the MPA often has to rely on personal credibility and informal influence, rather than having formal mechanisms, to get its voice heard in its work with departments. For example, the MPA is helping with recruitment for leadership positions on several major projects, but only on an ad hoc basis and told us that its role is not yet ‘systematised’. This lack of formal powers reduces the influence of the MPA with the Treasury and with departments, limiting its ability to drive improvements in project management. Recommendation: The Chief Executive of the MPA should have a formal mechanism available, equivalent to an Accounting Officer letter of direction, to set out his position if a project proceeds contrary to MPA advice to cancel or re-scope. More generally, where ministers or officials reject MPA recommendations, there should be a formal and transparent process in place to document this.
3The MPA provides welcome visibility of the Government Major Projects Portfolio, but despite the scale...
Concluded (the committee's words)
The MPA provides welcome visibility of the Government Major Projects Portfolio, but despite the scale and the cumulative risk to the taxpayer, it is managed as a series of individual projects rather than a portfolio. Although we have previously recommended that major project data should be used to manage spending and prioritise resources between projects, nobody in central government is responsible for overseeing projects at a strategic whole-of-government level. The value of the portfolio grew by £134 billion between September 2012 and September 2013, but much more could be done to assess and manage the increased level of risk this exposes government to, including to identify areas where too many projects are underway and departments may be struggling to cope. Recommendation: The Treasury should take ownership and responsibility for overseeing the government portfolio. It should ensure that decisions about whether, and how, individual projects should proceed are based on each project’s impact on the total portfolio’s value and risk, and the relevant department’s delivery capability and existing portfolio of projects. 6
4The MPA could increase its impact by prioritising its assurance work more effectively.
Concluded (the committee's words)
The MPA could increase its impact by prioritising its assurance work more effectively. The lack of robust planning in the concept, design and business case stages of projects has been a serious issue with government major projects for many years and exacerbates problems during project implementation. The two red-rated IT projects at the Department of Health are good examples of where the effects of past poor planning are still felt today. The MPA has introduced Project Validation Reviews to strengthen its assurance work at the early stages of projects. However, it acknowledges that more needs to be done to “work the front end harder”. It is also notable that some departments have significantly worse delivery confidence ratings across their projects than others and these would benefit the most from MPA interventions. For example, the Department of Health has 2 red and 9 amber-red rated projects, while the Ministry of Defence has 1 red and 6 amber-red rated projects. Recommendation: The MPA should work with departments to improve their project planning, and ensure that they have devoted sufficient attention to the planning phase before seeking project approval. The MPA should pay particular attention to departments with challenging, high-risk portfolios of major projects, such as the Department of Health and Ministry of Defence.
5The Major Projects Leadership Academy (MPLA) is a welcome development but there is scope for...
Concluded (the committee's words)
The Major Projects Leadership Academy (MPLA) is a welcome development but there is scope for it to target top decision-makers as well as project managers. The MPLA is currently focusing its efforts on training Senior Responsible Owners (SROs) and programme directors. It has already trained 200 of these, and by the end of 2014 expects all government project leaders to have taken part in its training. Two ministers have attended half-day or full-day courses on project management run by the MPA and found it helpful. It would be beneficial to extend this support more widely, as it would help to develop greater awareness of project delivery issues at the highest decision-making levels in government. Recommendation: The MPA should develop and implement a tailored approach to improving the project delivery skills and awareness of ministers, shadow ministers, and permanent secretaries.
6The MPA’s assessment of major projects does not cover value for money considerations.
Concluded (the committee's words)
The MPA’s assessment of major projects does not cover value for money considerations. The value for money of projects is considered by the Treasury when assessing project business cases, but there is little monitoring of the issue once projects are being implemented. At present, the MPA reviews focus primarily on the budget and timetable of projects. The lack of scrutiny has allowed projects which achieved poor value for money, such as the sale of Royal Mail and the awarding of the rural broadband contract, to proceed without challenge. The MPA Chief Executive acknowledged that value for money was not ‘front and centre’ for the MPA, and agreed with us that it should be an integral part of reviews. Recommendation: The MPA assessment should include explicit consideration of whether the project is likely to deliver good value for money, alongside its existing assessment criteria. 7
7Despite welcome progress in extending the range of information published, the data is infrequent and...
Recommended (the committee's words)
Despite welcome progress in extending the range of information published, the data is infrequent and out-of-date, and too much is still withheld. The MPA’s second annual report was a significant improvement on the first, with 30% less data withheld and more analysis provided. However, too much data is still missing. We are particularly concerned that the decision to award a ‘reset’ rating to the Universal Credit project was an attempt to keep information secret and prevent scrutiny. The Government’s transparency policy is too restrictive as it prevents useful data sets, such as the amount spent so far, from being published and stipulates that major project data can only be published once a year. This is too infrequent and means that the data available on high-profile, high-cost projects can be significantly out-of-date. Recommendation: The MPA should publish project data more frequently and continue its efforts to reduce the amount of data exempted from publication. The MPA should publish more information on each project, including spend-to-date, even if this means reviewing the government’s transparency policy. 9 1 Assurance over the government major project portfolio
8At the same time as the Government Major Projects Portfolio has grown, the MPA’s assessment...
Concluded (the committee's words)
At the same time as the Government Major Projects Portfolio has grown, the MPA’s assessment of the deliverability of the portfolio has worsened significantly. It attributed this deterioration in delivery confidence to the 39 projects leaving the portfolio and 47 new 9 C&AG’s Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 12. 10 Q 54 11 Q 29 12 Q 50 13 Qq 66-9 14 Written evidence from Major Projects Authority 15 Committee of Public Accounts, Assurance for major projects, October 2012, conclusion 3. 16 C&AG’s Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 4.8. 11 projects joining during the year. The MPA stated that new projects generally receive lower delivery confidence ratings as “they are still working through the process of identifying solutions to the challenges that they inevitably face”.17 The NAO’s analysis shows that in terms of whole-life cost, the MPA rated well over a fifth of the portfolio by value as amber- red or red by September 2013.18
9The MPA confirmed that an increasing number of “transformational projects”, where departments are looking to...
Concluded (the committee's words)
The MPA confirmed that an increasing number of “transformational projects”, where departments are looking to change the way they work, often by introducing new IT systems, is driving much of the growth in the portfolio. The MPA told us that this type of project is not doing as well because “they are more difficult to do, they involve changing how people work and they usually involve way more leadership and management than people anticipate going in.”19 The MPA told us that there was a lack of “strategic prioritisation” across the portfolio, and that “you wouldn’t do all this in a business; you would prioritise this in a different way.” The C&AG told us that he sees departments struggling with the volume of business and big projects that they are trying to carry out, and has not seen a department ever saying “We can’t do this. We just don’t have the troops on the ground.” He also highlighted the need for more clearly prioritised overall portfolio management.20
10The MPA established the Major Projects Leadership Academy (MPLA) in 2012, in partnership with the...
Concluded (the committee's words)
The MPA established the Major Projects Leadership Academy (MPLA) in 2012, in partnership with the Said Business School, to provide training for government project managers. The MPA reported that 200 project leaders have so far taken part in training and that all eligible managers should have started or completed the programme by the end of 2014. According to the MPA, the feedback received from participants has been positive and has already had an impact on the projects they are working on.21
11The MPA told us that it wanted to get more project leaders through the Academy,...
Concluded (the committee's words)
The MPA told us that it wanted to get more project leaders through the Academy, and to develop this further to offer shorter training courses.22 The MPA told us that, some time ago, two government ministers attended a day or half-day of MPLA training. Although this training was well-received, it has not been widened out to other ministers.23 The MPA’s aim with this training is primarily to raise awareness of project management and provide helpful insights into the key issues major projects face.24 Such training would be helpful for both government ministers and shadow ministers, most of whom have good knowledge of the policy issues in their areas, but do not know how to deliver projects.25
12More generally, the MPA told us that there was a “lack of distributed capability across...
Concluded (the committee's words)
More generally, the MPA told us that there was a “lack of distributed capability across government” when it came to managing major projects.26 This is particularly concerning as 17 Cabinet Office, Major Projects Authority Annual Report 2013-14, pages 6 & 12. 18 C&AG’s Report, Major Projects Authority Annual Report 2013-14, figure 3. 19 Q 33 20 Q 33 21 Cabinet Office, Major Projects Authority Annual Report 2013-14, pages 14-15. 22 Q 34 23 Qq 71, 74 24 Q 76 25 Q 77 26 Q 12 12 the MPA then told us that its biggest lever for improving project delivery was people.27 In order to effectively build capability in this area, the MPA argued that the most important factor was for people to gain experience.28 However, at present there is no strong, established project delivery profession in government, a situation that the MPA described as “unbelievable”. The MPA also told us that “the fact is that a young person coming into the civil service cannot, because of the structures that we have got, spend their life building delivery experience”.29
13MPA reviews focus primarily on whether projects will deliver on time rather than whether they...
Concluded (the committee's words)
MPA reviews focus primarily on whether projects will deliver on time rather than whether they will achieve value for money. From our experience, the Treasury also pays little attention to value for money issues once projects are being implemented. Its main focus is on ensuring that projects do not exceed their allocated budget.
14The MPA conceded that, while its reviews notionally address value for money issues, they are...
Concluded (the committee's words)
The MPA conceded that, while its reviews notionally address value for money issues, they are not “front and centre for us”. After initially expressing caution about the MPA’s expertise to also look at value for money in its reviews, on reflection the MPA agreed with us that value for money should be an integral part of its reviews.30 27 Q 57 28 Q 43 29 Qq 43 & 57 30 Qq 60-2 13 2 The performance of projects in the portfolio
15The MPA provides a delivery confidence assessment that shows how likely it rates the successful...
Concluded (the committee's words)
The MPA provides a delivery confidence assessment that shows how likely it rates the successful delivery of each project. In part because of the changes in the composition of the portfolio (such as large numbers of mature projects leaving and new projects joining), the deliverability of the portfolio has worsened considerably over the previous year. In September 2013 the MPA gave an increased proportion of government major projects an amber-red delivery confidence rating (19% of portfolio projects in 2013-14 compared to 12% in 2012-13), and gave significantly fewer projects green ratings (9% in 2013-14 compared to 17% in 2012-13).31
16We have seen numerous examples of poor planning on government projects over many years.
Concluded (the committee's words)
We have seen numerous examples of poor planning on government projects over many years. Government needs to do more “front-loading”, namely focusing more attention on the concept, design and business case stages, of projects to allow for smoother implementation.32 The MPA acknowledged that government still does not do enough planning for its major projects. It told us that government needs to “work the front end harder” and that “the majority [of projects] would have benefited from more front-loading at almost every stage”.33 The long-standing shortcomings of project planning continue to affect projects that are currently being implemented. The MPA cited the red rated IT projects at the Department of Health as examples.34 The MPA told us that it had introduced project validation reviews 12 months ago to strengthen project initiation, but that the process “is still not where it needs to be”.35
17The data published by the MPA shows that it has the most serious doubts over...
Concluded (the committee's words)
The data published by the MPA shows that it has the most serious doubts over the deliverability of projects at the Department of Health and the Ministry of Defence. The Department of Health has 9 amber-red rated projects and 2 red rated projects, and eight have no rating at all as they are projects in NHS Trusts and the MPA “cannot get to everything all at once”.36 The Ministry of Defence has 6 amber-red rated projects and 1 red rated project, and withheld the ratings for 7 projects from publication.37 We are concerned that these ratings suggest a lack of sufficient control over projects in these departments.38
18The MPA and departments publish information on major projects in line with the Government’s transparency...
Recommended (the committee's words)
The MPA and departments publish information on major projects in line with the Government’s transparency policy. The transparency policy mandates the MPA to publish major project data once a year and stipulates that major project delivery confidence ratings can only be published after a six month time lag. The MPA’s May 2014 Annual Report includes project data as at September 2013, and this will be the latest public data available 31 C&AG’s Report, Major Projects Authority Annual Report 2013-14, para 2.1. 32 Q 42 33 Q 39 34 Q 41 35 Q 48 36 Q 81 37 Cabinet Office, Major Projects Authority Annual Report 2013-14, figure 9. 38 Q 79 14 until the next Annual Report in 2015.39 The policy instructs departments to withhold data from publication if it is considered to be commercially sensitive or has implications for national security, in line with the Freedom of Information Act (2000).40 The NAO recommended in February 2014 that departments and the MPA should publish a broader range of project data.41 The MPA made some efforts to address these recommendations in its second annual report by altering the guidance issued to departments, but it did not include any data sets, such as project spend to date, that were not specified in the transparency policy.42
19The NAO reported that the MPA’s second annual report and the departmental project data accompanying...
Concluded (the committee's words)
The NAO reported that the MPA’s second annual report and the departmental project data accompanying it were a marked improvement on the previous year’s report. Departments withheld 30% less data from publication, from 80 pieces of data in the 2012- 13 report to 56 items in 2013-14. In 2012-13 there were 48 projects (25% of the portfolio) with data missing, and this fell to 35 projects (18% of the portfolio) in 2013-14. The most commonly withheld category of data in both years was whole-life costs, followed by delivery confidence assessments.43
20The Department for Work & Pensions, in consultation with the MPA, published the delivery confidence...
Concluded (the committee's words)
The Department for Work & Pensions, in consultation with the MPA, published the delivery confidence assessment of the Universal Credit project as ‘reset’ at the reporting date of September 2013. The ‘reset’ category was introduced for the 2013-14 report and was only applied to this one project.44 The MPA confirmed that the decision to give Universal Credit a reset rating was ultimately made by ministers.45 However, the MPA also told us that the decision to give this rating “was a good thing for the project” as it allowed the project team a “bit of breathing space to get themselves back on the front foot”.46 The MPA confirmed that Universal Credit would still be subject to its assurance reviews and that, in line with the transparency policy, a normal delivery confidence assessment would be published in May 2015. This is a long time to wait for an update on a project as important as Universal Credit.47 39 Cabinet Office, Major Projects Authority Annual Report 2013-14; and Qq 25-6 40 Cabinet Office, Transparency policy on the Government’s Major Projects Portfolio, May 2013. 41 C&AG’s Report, Major Projects Authority Annual Report 2012-13 and government project assurance, para 10. 42 C&AG’s Report, Major Projects Authority Annual Report 2013-14, para 1.7. 43 C&AG’s Report, Major Projects Authority Annual Report 2013-14, para 1.5. 44 Cabinet Office, Major Projects Authority Annual Report 2013-14, page 12. 45 Q 7 46 Qq 7-8 47 Qq 25-8 15
Evidence
Oral evidence sessions 1
- 5 Jun 2014No witnesses recordedparliament.uk ↗