Q161 Chair: He will stay in post for how long?
Philip Rutnam: He is an interim director of franchising, so there is a longer-term succession issue. Rest assured, we are well aware of that, but we are making good progress on franchising, and we expect to issue the invitation to tender for the Thameslink franchise later this year.
Q162 Ian Swales: Are you satisfied that this person, whoever it is, is sufficiently independent of his previous career and, given that he is interim, is not about to go back to the industry on the other end again-in other words, the poacher-gamekeeper-poacher thing which concerns this Committee and others?
Philip Rutnam: I can understand that, and can assure you that any issues around conflicts of interest and so on have been addressed. We will-
Q163 Chair: How long is he with you, or she?
Philip Rutnam: It is a "he". I do not think I am in a position to tell the Committee that just at the moment, because it is subject to some contractual negotiations.
Q164 Ian Swales: To put it bluntly, we are not going to find this person in future in one of the franchises that he is advising on granting, are we?
Philip Rutnam: For him to appear immediately on the other side of the table would obviously create issues about conflict of interest that would concern me greatly.
Q165 Chair: How long will you give him? Is it a year that he has to do that, were he to go back?
Philip Rutnam: There are the business appointment rules, as you know, under which individuals who have been in Crown service have to apply for businesses appointments. The period of exclusion set depends on the nature of the role that somebody wants to take. I think the maximum period can be up to two years, from memory.
Q166 Jackie Doyle-Price: Mr Hurn, we do not get many good project managers before us, so while you are here, I want to pick your brain about what ingredients help deliver a project well. We have talked about leadership as being one issue, but one thing that strikes me about managing projects in the public sector is that the public sector often lets its obsession with process divert its attention from delivering the outcome.
Can I turn your attention to paragraph 2.2 of the Report? The NAO says: "The Department inherited plans for the programme...that had been prepared primarily to secure planning permission" rather than actually to deliver the infrastructure. Can you tell me what that meant in practice and what difficulties ensued from that?
Michael Hurn: Yes. I think I referred to it in passing earlier. The project was a long time in the planning process. There were two very extensive public inquiries in the 1990s going into the early 2000s. The mindset was very much about planning, and rather less about how the project would be delivered, because it had been so long in the planning process. The focus, once the planning consents were approved, was to move rapidly into that delivery phase. It is fair to say that there was a lag in moving the overall project into the mindset of delivery. That was a factor of it being so long in the planning process, and that was a real lesson learned. I am not defending that; it is just something that happened and it is a real learning process for future projects. You should not just look at the individual stages of a project, for example, the planning or development phase; you should always be thinking ahead about how on earth you are going to build it and how you are going to get the benefits of the project, which is clearly what it is all about, as well as having a view of all the phases together in a holistic approach. That is what a client or sponsor should be doing: having that total view, understanding how that project will be delivered through all the phases and having the tools to get it done and delivered on time and within budget. It is very much about thinking ahead, anticipating things, looking at scenarios, trying to think about the unforeseen events that can trip you up and mapping your way through them.
Q167 Jackie Doyle-Price: I can see now why Mr Rutnam wanted to move you to HS2, because you have gone through this process with Thameslink, and we are now talking about a project of much larger magnitude with a much greater need to pre-empt those things. To what extent did that challenge on this project lead to additional costs?
Michael Hurn: It certainly led to some additional costs for the first phase of the project, which we call key output 1. Those were more around the construction of Blackfriars station, where the extent of some of the refurbishment work on the bridge-it was a major refurbishment of the bridge, as well as the building of a new station-was underestimated. How that would be constructed was underestimated as well.
That goes back to the comments I made about being too focused on the first phase, which is about planning and securing the planning permissions, without so much thought-I am not saying that no thought was given, because that would be entirely wrong-being given to the construction phase. Blackfriars is a good example where additional costs arose out of that, but they were contained in the overall costs of the first phase of key output 1. There were some savings elsewhere in the project that offset the Blackfriars costs.
Q168 Jackie Doyle-Price: The other factor that I often think leads to better management of public projects and works is when there is a lot of public attention and there is a higher reputational risk. If I take something like the Olympics, which everyone worried about, in the event it was delivered successfully, but that happened because all eyes were on it. If we look at this project, there is a clear capacity issue and a clear demand. To what extent do you think that that external pressure added to the impetus to get this right?
Michael Hurn: That is a very important factor. Everyone knows that the routes of Thameslink are very crowded, and people are passionate about dealing with that. That is one thing.
The other thing is that, with Network Rail, we had some financial incentives in place within the project for them to deliver within a certain cost envelope and to deliver to certain milestones, and that helped drive behaviours.
Most importantly-again, I am passionate about this-it is about reputation and feeling proud. I am sure that Network Rail would say the same. People had deadlines to deliver for Thameslink and they wanted to deliver them. They had their professional pride and reputation on that. It is a combination of things, but that is what it comes down to.
Q169 Jackie Doyle-Price: As a project manager, are you able to use public pressure to manage the process? Do you use public pressure as, for want of a better term, a stick with which to manage the process? You have alluded to the stakeholders and contractors that you have to manage. Does that pressure help you in the management of them?
Michael Hurn: Of course it does. You have to use the tools that are available, but I think reputation is a really essential tool to use. We have had a number of obstacles during the course of the project-as you would expect for any major or mega project, and Thameslink is a mega project-that have affected delivery, and it is by coming together and dealing successfully with those issues across the rail industry that we generate that "can do" attitude-that momentum, that drive-for tackling things. I am confident that that same mentality can be taken forward to the second phase. It is all around people, mindset, capability and being joined up, which is how you deal with these projects.
Q170 Jackie Doyle-Price: It is really nice to hear this language coming from Whitehall. Mr Rutnam, can I ask you one final question? If we look at paragraph 2.16 of the Report, the NAO basically says that you are to be congratulated on keeping the costs within the original budget and that you have obviously learned from the experience of running this project and refined the way that you are monitoring it. To what extent is that knowledge and expertise within the Department and to what extent is it Mr Hurn?
Philip Rutnam: A lot is Mr Hurn, but I think it goes wider in the Department. As well as being SRO for this programme, Michael is the head of the profession within the Department for project and programme management. You may ask how he can have the number of hours in the day to do these different things. Part of the professional development task in the Department under Michael's leadership, but not using too much of his time, is to develop the cadre- the community-and a sense of community among the PPM professionals in the organisation.