11 Over-optimism is not just about poor process; there are significant behavioural factors. Over-optimism can be unconscious or deliberate. Reasons for the latter, known as strategic misrepresentation, may include a desire of individuals to protect and boost their own prospects or the desire to secure investment for a project. It is widely accepted that a bias towards optimism can lead officials to underestimate or understate risks. The pressures of short-term political and budgetary cycles increase the risk of over-optimism.
"Executives make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities. They overestimate benefits and underestimate costs… as a result, they pursue initiatives that are unlikely to come in on budget or on time or to deliver the expected returns - or even to be completed."15 Daniel Kahenman and Amos Tversky
| In Mobile Technology in Policing, we highlighted that the primary driver for the project timescale was a deadline set by the government. In 2007, an announcement was made by the government that 10,000 mobile devices would be provided to police officers within 12 months, even though earlier trials showed that it had taken around 30 months to introduce mobile devices effectively in one police force. Adherence to such short timescales contributed to the project not achieving its full potential.16 |
12 Officials have a key role in advising ministers on policy and on the schemes for implementing it. It is important therefore that the culture of an organisation encourages and supports challenge and does not lead staff to hide bad news and be reluctant to challenge senior views. We regularly see major projects continue despite frequent and serious warnings that things are not going to plan and remedial action needs to be taken.
| Early governance arrangements on the FiReControl project were complex and ineffective. In 2008, the Office of Government Commerce concluded that the project board was not operating as an effective decision-making forum. It was similarly concerned in 2009 that there could be a cultural failing to share bad news early "across the breadth of the project" and that too many false starts and promises on resource requirements undermined confidence.17 To provide assurance that future funding on improving efficiency of fire and rescue control centres is well spent, the Department for Communities and Local Government has put in place a joint strategic board chaired by the Chief Fire Officer's Association with attendees from the Department and the Local Government Association.18 In the period leading up to the conclusion of the West Coast InterCity Franchise Competition, there were a number of warning signs that the procurement process was at risk. Eversheds, the Department for Transport's legal advisers, subsequently raised concerns that the Department may not have been entitled to apply discretion to the value of the subordinated loan facility when they found out that this had occurred. This advice was not escalated to members of the board investment and commercial subcommittee, the Permanent Secretary or ministers. Nor were they informed that discretion had been applied.19 |
______________________________________________________________
15 Kahenman, Daniel and Tversky, Amos (1977) Intuitive prediction: Biases and corrective procedures, Cybernetics Technology Office.
16 Comptroller and Auditor General, Home Office and National Policing Improvement Agency: Mobile Technology in Policing, Session 2010-2012, HC 1765, National Audit Office, January 2012.
17 Report on FiReControl project, Office of Government Commerce, October 2009.
18 Public Accounts, Written evidence from the National Audit Office, paragraph 4.16 (www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/110/110we05.htm)
19 Comptroller and Auditor General, Department for Transport: Lessons from cancelling the InterCity West Coast franchise competition, Session 2012-13, HC 796, National Audit Office, December 2012.