1.14 The Authority and HM Treasury have set out the main components of the new central assurance system in Major project assurance and approval guidance.5 All major projects must comply with the guidance6. There are three main requirements: assurance, approval and project reporting.
1.15 Assurance is categorised as either planned or consequential, and as point-in-time or continuous. The new assurance system uses a mixture of planned and consequential assurance. Continuous assurance is not part of the new system (Figure 5). These categories of guidance can be defined as follows:
• Planned assurance is scheduled at the outset of a project to meet a specific requirement during the project's life cycle, for example, informing a decision at a major milestone.
• Consequential assurance is triggered by an event during a project, such as concerns around a project's performance against its plan.
• Point-in-time assurance is a discrete review, typically completed within one week.
• Continuous assurance is ongoing and embedded alongside the project, with the authority to report independently and directly to those funding and sponsoring the project.
1.16 We estimate that the total cost of assurance in 2011-12 was £6.3 million.7 This is less than the £8.3 million cost that we reported in 2010, which was before the new system was established8. Our analysis indicates that demand for all types of planned assurance is increasing. However, the cost of individual assurance is decreasing owing to significant reductions in the Authority's management overheads and spending on consultants.
1.17 Major projects are those that require approval by HM Treasury. Approval is needed at the stages of strategic business case, outline business case and full business case. Each of these approval points must be preceded and informed by planned assurance. The Major Projects Review Group approves the largest and most complex projects, and all other major projects are approved by HM Treasury approval points, either with or without a panel session with the project team. Our analysis indicates that there was a peak of 24 Major Projects Review Group approvals in 2009-10, up from 19 in 2008-09. Since then the number of approvals has been stable, at between eight and ten per year.
| Figure 5 Authority planned and consequential assurance mechanisms | |||||
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| Number performed | ||
| Assurance mechanism | Type of | Purpose | 2 010-11 | 2011-12 | 2012-13 |
| Starting gate | Planned - | Explores deliverability of major new policy or business change initiatives, or both, before public commitment to a project | 15 | 17 | 20 |
| Gateway | Planned - | Series of assurance 'gates' before key project milestones | 137 | 129 | 150 |
| Project assessment review (PAR) | Planned - | Flexible assurance review that is tailored to stage of project | 42 | 26 | 35 |
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| Sub total | 194 | 172 | 205 |
| Assurance of action plan | Consequential - | Provides assessment of whether the project's action plans can resolve issues identified through planned assurance | 5 | 8 | 10 |
| Case conference | Consequential - | Integrated planning for recovering projects at risk or in difficulty | Unknown | Unknown | Unknown |
| Applied support | Consequential - | Providing capability from the Authority to support recovery | Unknown | Unknown | Unknown |
| Managed early closure | Consequential - | Supports controlled and timely termination of projects | 3 | 0 | 0 |
| Escalation | Consequential - | Timely engagement with higher levels of management or ministers, or both, to resolve otherwise intractable problems | Unknown | Unknown | Unknown |
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| Total | 202 | 180 | 215 |
| NOTES 1 The number of consequential project assurance reviews is incorporated into the number of planned project assurance reviews. 2 Project assurance reviews in 2010-11 include 33 undertaken as part of a one-off review of all major projects in summer 2010. 3 The Authority does not routinely capture data on the incidence of consequential assurance. 4 Planned assurance is arranged and managed by the Major Projects Authority. Source: National Audit Office analysis of Authority data | |||||
1.18 Project reporting is the third requirement of the new assurance and approval arrangements. The new Government Major Projects Portfolio includes all major projects. However, the Authority and the relevant HM Treasury spending team will agree which projects are included in the portfolio for each department after discussion with the department. All projects in the portfolio must report core performance data to the Authority quarterly.
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5 Cabinet Office and HM Treasury, Major project assurance and approval guidance, April 2011.
6 A major project is defined as a project that requires HM Treasury approval.
7 Estimated costs include Major Projects Authority management overhead consultancy costs, reviewer costs and project staff time in assurance activity.
8 National Audit Office, Assurance for high risk projects, June 2010.