Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Deferred
Mega-projects receive overall funding approval, with annual budgets subject to departmental reprofiling.
Conclusion
We asked the Treasury about when major and mega projects are given the approval to proceed and who makes these announcements. The role the Treasury plays in decisions about whether and how to proceed with a mega- project, its purpose and how to fund it is particularly important. At the time of our session, government approved an overall funding envelope for a mega-project’s whole-life cost, and then issued shorter-term commitments for a mega-project’s annual funding profile, often for a spending review period. Whole-life costs of large and complex projects can be significant and span years, even decades. However, annual budgets can be changed if a sponsor department needs to reprofile their spend.12
Government Response Summary
The government refers to the OVFM study published in June 2025, setting out a new bespoke approach to funding and governance for mega projects, and states the Treasury will provide an update on its effectiveness.
Government Response
Deferred
HM Government
Deferred
1.2 The Office for Value for Money (OVFM) published its study on the governance and budgeting arrangements for mega projects in June 2025. This set out a new bespoke approach to funding and governance that will be implemented for current and future mega projects. The Treasury will write to the Committee with an update on the effectiveness of this revised approach.