Recommendation 2

There are many strategically important projects that will not fall within the OVFM and Treasury’s definition of a mega project. The Treasury and the OVFM’s criteria for what constitutes a mega-project are focused on strategic importance, complexity and cost, with the latter needing to exceed £10 billion to be considered ‘mega’. This means a number of complex, strategically important projects, such as the Lower Thames Crossing and the Oxford-Cambridge arc, do not meet this definition. We were told that Euston station’s bespoke governance arrangements and many stakeholders mean it is an example of a project which could 3 become a mega project. The criteria exclude projects that are deemed to be repeatable and scalable, such as new hospitals, despite previous failures being experienced by these sorts of projects. Similarly, technically complex and innovative projects, such as digital transformation and artificial intelligence (AI), also do not fit the Treasury and OVFM definition of a mega project, despite government’s clear focus on these to deliver its ambitions for public service reform. recommendation Alongside its Treasury Minute response, the Treasury should write to us setting out the rationale for the £10 billion cost criterion for mega projects, and under what circumstances a project’s complexity and importance could justify it being a mega-project even where the £10 billion cost threshold is not met.