1 Central government's major projects are frequently large scale, innovative, reliant on complex relationships between diverse stakeholders, and high risk. They include the introduction of large IT systems, the construction of defence equipment such as ships and helicopters, and the implementation of major changes to how services are delivered by government. They must be well planned and executed in order to be delivered on time and on budget.
2 Government must find ways to avoid repeating the poor performance which has led to previous high profile project failures. Alongside measures to increase the project management skills of its staff, an effective system that gives assurance over project progress is critical for ensuring successful outcomes.
What is assurance? Assurance is an independent assessment of whether the required elements to deliver projects successfully, such as good project management practices and appropriate funding and skills, are in place and operating effectively. This assessment will be reported to stakeholders. In government projects stakeholders can be the project's senior responsible owner, the department's Accounting Officer, or HM Treasury as the provider of the project funding. Assurance opinion is accompanied by recommendations which, if implemented, can help reduce project failure, promote successful conditions and increase the chance of delivering the required outcome cost-effectively. Assurance can take a number of different forms. It can be 'internal', for example, undertaken by an internal audit unit, or 'external', where another body is responsible for the review. It can be 'planned', where it is scheduled at the outset of a project to meet a specific requirement during its life cycle, or 'consequential', where it is triggered by an event during a project, such as concerns about a project's performance against its plan. It can be 'point-in-time', in the form of a discrete review over a short period, or 'continuous', where the assurance is ongoing and reviewers are embedded alongside the project team. |
3 In 2010, we set out the good practice principles that would be present in a mature and effective assurance system. We reviewed the system for assuring government's major projects and found a number of significant performance gaps. These included:
• no coordinated central assurance system design;
• variability in how departments engage with the central assurance system; and
• a failure to systematically capture or use information and learning from assurance to improve project performance.
4 The government agreed with our assessment that the central system for assuring major projects was not optimal. In response, it established the Major Projects Authority (the Authority) under a prime ministerial mandate. The Authority was launched in March 2011 as a partnership between Cabinet Office and HM Treasury, reporting jointly to the Minister for the Cabinet Office and the Chief Secretary to the Treasury.
5 The mandate makes it clear that the success of the central assurance system depends on a close chain of cooperation between the Authority and other parts of government. This includes departments' project and assurance teams, ministers and Accounting Officers, and the section of HM Treasury that approves project funding.
6 The Authority has an ambition to improve the performance of government's projects. In future years it will seek to improve project management skills and methodologies, but its first year objectives were:
• to develop the Government Major Projects Portfolio [an internal publication], in collaboration with departments, with regular reporting to Ministers;
• to require Integrated Assurance and Approval Plans for each major project or programme, including timetables for HM Treasury financial approvals;
• to make a Starting Gate Review, or equivalent, mandatory for all new projects and programmes;
• to escalate issues of concern to ministers and Accounting Officers;
• to provide additional assurance and direct involvement where projects are causing concern, including the provision of commercial and operational support;
• to require publication of project information consistent with the Coalition's transparency agenda;
• to work with departments to build capability in project and programme management; and
• to publish an annual report on government's major projects.
7 The extent of what the Authority can achieve on its own is limited. For example, HM Treasury's investment decisions should draw on the Authority's recommendations but the Authority cannot stop projects or withdraw funding. Similarly, the Authority is not accountable for delivering project outcomes successfully but its recommendations should influence the decisions taken on projects. Senior responsible owners in charge of projects must either implement the recommendations or formally declare why they have not taken action. Figure 1 shows some of the responsibilities of the organisations that are part of the assurance system.
Figure 1 Responsibilities of the organisations within the central assurance system | |
Organisation | Key responsibilities |
Departments | Comply with Prime Minister's mandate Review project information and provide assurance plan Provide staff for review teams Provide access to project staff and documentation Provide quarterly project information for portfolio report Use reports on the status of recommendations to trigger escalation or further intervention |
The Major Projects Authority | Validate assurance plan in conjunction with HM Treasury Plan assurance reviews Arrange resource for reviews Provide project information to reviewers Produce and issue assurance reports Produce annual report on status of government major projects Produce Government Major Projects Portfolio report Arrange escalation Agree and manage updates to the assurance system |
Accounting Officers | Act on assurance reports to meet financial responsibilities |
HM Treasury | Validate assurance plan in conjunction with the Major Projects Authority Use assurance information to inform approval decisions Review portfolio spending data Assess financial commitment of the portfolio Agree and manage updates to the assurance system |
Secretaries of State | Act on issues escalated by the Major Projects Authority |
Source: National Audit Office |
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8 This report examines the new central assurance system. It does not examine departments' arrangements for internal assurance and approval. The report does not focus exclusively on the role of the Major Projects Authority. Instead, it examines how effectively all of the organisations in the system are working together to address the problems we identified in our 2010 report.