2.34 Our work, and that of the Committee of Public Accounts, on the Whole of Government Accounts has shown the value of considering how resources are allocated across organisations.15 Such an approach enables potential problems to be spotted and addressed when they occur and resources to be reallocated to meet priorities.
2.35 The Australian Federal Government evaluates project information to forecast potential issues and raise points for decision-making across government. For example, there may be an increasing demand for a specific type of resource over the next five years. Recognising this will prompt decisions on whether the economic impact of that demand is acceptable, and can be funded, or whether government needs to reconsider the number, type and priority of the projects within the portfolio.
2.36 HM Treasury does not believe that it must routinely consider the cross-government project portfolio perspective when making approval decisions. Between spending reviews, it only considers the project portfolios within individual departments. Reconsideration of funding allocations between departments is something that would only take place as part of the next spending review.
2.37 Although there have been significant improvements in data, the Authority believes that the information is still too immature to make portfolio decisions. However, some portfolio issues have been identified by the Authority, such as a fast turnover in senior responsible owners, particularly in the Ministry of Defence, and an uneven distribution of projects among them. For example, they found that two senior responsible owners in the Ministry of Defence are each responsible for more than five projects.
2.38 More analysis by attributes such as type of project or spend profile would help build a better picture of potential problems. For example, using portfolio data, the Authority identified a potential milestone bottleneck as the procurement timelines of a number of key Ministry of Justice projects coincided. The Authority worked with the Department, which was then able to manage this peak in demand. Such analysis can also identify where government is overstretching a particular market sector, for example by having too many IT projects at the same stage at the same time. Subject to data quality, it may be possible to use portfolio reports to assess the combined risk of individual projects and inform decisions on the likelihood of delivering the intended portfolio outcomes.
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15 HC Committee of Public Accounts, Whole of government accounts 2009-10, Sixty-seventh report of Session 2010-2012, HC 1696, February 2012.