Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Deferred
Feasibility stage aims to prevent early announcements and clarify mega-project governance frameworks.
Conclusion
We asked how government will prevent projects being announced too early, noting that politicians are a factor. The OVFM told us that this feasibility stage will try to address this by setting out how governance is going to work, with publication of the strategy and delivery plan for a mega-project that defines the stages it will go through. The OVFM and the Treasury also emphasised the importance of flexibility and that cost and schedule estimates should be very broad ranges in the early stages.18 NISTA told us that when there is uncertainty, projects will follow the NISTA guidance on cost estimating, which has a broad range at the start, then comes down as maturity develops.19 The Treasury told us that when the mega-project is ready it will enter a construction phase, which would have its own budget with flexibility within it where things are not expected to change, as a result of the work done during the feasibility stage. The OVFM added that for mega-projects categorised by their definition, the Prime Minister, Chancellor and the relevant Secretary of State will be responsible for making the final investment decision.20
Government Response Summary
The Treasury will write to the Committee with an update on the effectiveness of the new bespoke approach to funding and governance as set out in the Office for Value for Money (OVFM) study.
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.