1.11 Government faces several challenges in delivering its projects.
These include:
• The number of projects being delivered in this Parliament
For example, 71% of the Portfolio's current projects (106 out of 149 projects) are scheduled to be completed by 2019-20. This inevitably puts pressure on departments and creates demand, both in government and in the supply chain, for scarce skills including digital, specialist engineering, commercial and project management skills and resources. Nearly 80% of these 106 projects are to either transform or change the way services are delivered, or accessed through the use of new technologies.
• The length of some projects
While most (70%) of the projects in the Portfolio in June 2015 were expected to take fewer than 10 years to complete, 4 are expected to take more than 30 years. This makes it difficult to maintain management continuity and makes them more likely to be affected by changes in their operating environment.
• The size of individual programmes
For example, the Crossrail project is reputed to be the largest infrastructure project currently under construction in Europe. More ambitious projects are in the pipeline.
• The ambition and complexity of both transformation and infrastructure programmes
Some departments are delivering several transformation and service delivery projects at the same time; the Ministry of Defence had 14 of their transformation projects in the Portfolio in June 2015 and the Department of Health had 10. We have already commented in our briefing note Lessons for major service transformation that transformation projects raise the greatest risk of failure and require the department to balance ambition and realism in setting goals. Delivering multiple projects increases these risks.5
Programmes such as High Speed 2 are complex. They have multiple elements to be delivered in parallel by a diverse supply chain; many external interdependencies; and multiple policy objectives, such as transport objectives that involve increasing capacity in the railway, and economic objectives that involve generating growth and rebalancing the economy. These require governance structures that span traditional departmental boundaries.
• The financing required
The government expects private sources to raise 64% of the £411 billion required for the National Infrastructure Plan, covering government-sponsored projects and profit-making private sector investments. This includes funding through corporate balance sheets, especially in regulated sectors, but in March 2014 Infrastructure UK estimated that up to £52 billion might require project financing. Recent experience of financing new trains and nuclear power indicates that securing such finance can be a long process, which has an impact on how quickly projects can be delivered.
1.12 The factors that require departments to start more major programmes - scarce resources, the need for more investment in infrastructure and the opportunities to take advantage of new technologies - increase the demands on their limited capacity. This means the environment for delivering major public programmes is increasingly challenging and will require departments to:
• prioritise effectively;
• make good investment decisions, ensuring that the projects and programmes given priority offer the best value for money;
• secure the skills to deliver programmes in different ways, including agile development techniques and the capability to lead business and service transformation programmes; and
• respond flexibly to developments and change direction when new approaches do not deliver results.
1.13 This briefing provides an overview of:
• the key trends in the performance of project delivery in government;
• the progress that central bodies and departments have made in tackling the underlying issues we have identified; and
• what we see as the key challenges for improvement in this Parliament.
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5 See Appendix Three.