Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
The 46 hospital schemes must deliver quality hospitals on time and on budget over 25...
Recommendation
The 46 hospital schemes must deliver quality hospitals on time and on budget over 25 years and for £60 billion. Given its cost and importance, and that the design concept of Hospital 2.0 remains unproven, we are concerned that the New Hospital Programme is not being treated in government as a ‘mega project’. The programme has been high-risk since its inception and beset with delays. It is currently in the Government Major Projects Portfolio and subject to scrutiny by the National Infrastructure and Service Transformation Authority (NISTA). However, in September 2025 we reported our concerns that significant programmes, including the New Hospital Programme, had not been afforded ‘mega project’ status. 6 The Government has made changes to how particularly risky, costly and complex projects—mega projects—would be managed including greater parliamentary scrutiny and more streamlined decision making. Mega projects also benefit from fixed capital funding, flexibility to move funding between years and freedom to determine pay for specialist roles. The governance and performance failures to date add to the already very strong case for the New Hospital Programme is sufficiently risky to need mega project status. The programme has many hallmarks of a mega project, such as strategic importance, level of spend, unified procurement, a singular design and a centralised programme team. Delays or cost increases to one scheme are likely to have knock-on effects on other hospital schemes. recommendation This programme requires an appropriate level of oversight and scrutiny commensurate with its risk, size and complexity. As the programme develops, HM Treasury and the Mega Project Decision Panel should assess whether this should be overseen as a mega project—at least up until the point that Hospital 2.0 is a proven concept—and advise ministers accordingly, who should regularly update Parliament. 7 1 Current progress of the updated New Hospital Programme Introduction
Government response summary AI-generated
The government agrees with the recommendation that the programme requires appropriate oversight and scrutiny. HM Treasury and the Mega Projects Decision Panel have assessed the New Hospital Programme for 'mega project' status but concluded it does not meet the criteria, with NHP remaining under Major Projects Review Group oversight.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Accepted
HM Government · verbatim extract
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented HM Treasury, including NISTA, and Cabinet Office have considered whether the New Hospital Programme (NHP) should be designated as a mega project in line with the criteria set out in Treasury Approvals Process for projects and programmes, informed by the Office for Value for Money's Value for Money (OVfM) study on the governance and budgeting arrangements for mega projects. The Mega Projects Decision Panel Chairs from the Treasury and Cabinet Office concluded at their most recent stocktake that NHP did not meet the criteria for mega project status, because the projects within it are expected to deliver their direct benefits separably. Commensurate with its size and scale, NHP is subject to the oversight and scrutiny of the Major Projects Review Group, the second-most senior forum in the Treasury Approval Process, reserved for very risky, costly and complex GMPP initiatives. NISTA provides independent assurance of the programme, alongside DHSC’s internal assurance arrangements. As a large capital programme, NHP may undertake budget exchange of up to 20% of the annual programme budget in line with Consolidated Budgeting Guidance. 8