Multiple critical government programmes could be left out of plans to strengthen governance of so-called ‘mega projects’ according to a new report from the House of Commons Public Accounts Committee (PAC).

The report welcomes HM Treasury (HMT) plans to take more responsibility for planning and delivering such mega projects given frequent problems arising in the past - but warns of other complex schemes being left to slip through the net.

A mega-project can be defined as government’s biggest and highest-profile projects, which are particularly costly (in excess of £10 billion), risky and complex. These in past years have routinely seen issues including unclear objectives, construction starting when design is still immature, and budgets and schedules announced too early.

The PAC welcomes HMT’s commitment to implement stronger governance for these projects, per recommendations made by the Office for Value for Money (OVFM).

However, the MPs on the Committee say it is “surprising” that HMT and the OVFM only consider three projects in the government’s vast portfolio to be ‘mega’, and thus subject to this stronger governance – HS2, the Sizewell C nuclear power station, and the Dreadnought submarine programme.

This leaves out projects including Euston station, the New Hospitals Programme, the Lower Thames Crossing, the Oxford-Cambridge Arc, and artificial intelligence.

All projects in the government’s portfolio of over 200, other than the three considered ‘mega’, will still fall under the previous approach to governance and decision-making, which was not working effectively. The PAC is calling on HMT to lay out the rationale for the mega-project criteria.

PAC left unconvinced by how separate yet overlapping structures would work in practice

The government has set out a number of missions as part of its plans for reform, has set up Mission Boards to oversee their delivery across government, and also plans to drive more “place-based” governance and co-ordination of projects. Each mission requires investment in major projects, and the PAC was left unconvinced by how these separate yet overlapping structures would work in practice.

The report warns that work could be duplicated and confusion arise without the right skills involved in decision-making, and asks for an explanation with examples on how these arrangements will help deliver government’s infrastructure strategy.

On the strategy, the report warns it is not clear how HMT and the National Infrastructure and Service Transformation Authority (NISTA) will be held to account on its progress. With the strategic advisory role of the National Infrastructure Commission (NIC) having been brought inside government, the report warns of the risk of an absence of independent scrutiny over the effectiveness of HMT and NISTA in delivering the strategy. The PAC is calling for more information on how government will make arrangements for independent assurance to be in place.

Sir Geoffrey Clifton-Brown MP, Chair of the Public Accounts Committee, said:

“It is welcome to see recognition from the Treasury that, given past failures, a firmer grip must be taken by the centre of government on so-called ‘mega-projects’. The challenges implicit in successfully bringing into land the government’s costliest and most complex programmes are self-evident, and this change has the potential to completely transform how such schemes are managed. However, it is surprising that under the current definition, the Treasury is only taking this greater accountability for three of over 200 of the nation’s most challenging schemes. We look forward to hearing more from government on the rationale behind this classification, as many high-profile programmes will still suffer from the same unsatisfactory governance demonstrated to be so ineffective in the past.

“The role of the cross-cutting boards overseeing government’s high-level missions in its Plan for Change were explained to our inquiry, which found a risk of confusion and duplication in the overall structure of which they are a part. The goals behind each of the government’s missions are of course desirable, but Whitehall must be directed to carry them out in a coherent way. If these arrangements are not aligned properly per the recommendations in our report, then failures of the kind seen in the delivery of HS2 will continue to echo into the future of the delivery of British infrastructure.”

Institution of Civil Engineers - NISTA should have power to mandate use of tools to improve project delivery

In response to the Public Account Committee's report, Sam Gould, the Institution of Civil Engineers' director of policy and external affairs said:

“Today’s Public Accounts Committee (PAC) report on governance and decision-making for major projects is a welcome addition to the conversation about how to improve project delivery.

“The Institution of Civil Engineers (ICE) and the PAC agree that increased Treasury oversight for projects is a smart move. Streamlining decision-making has long been identified by the ICE and others as a key area for improvement.

“The ICE also agrees with the PAC that it’s concerning that such enhanced oversight will only apply to projects expensive enough to be labelled ‘mega’. Improving delivery should be a priority for projects of every shape, size, and cost.

“The report also echoes the ICE's call for the National Infrastructure and Service Transformation Authority (NISTA) to retain an independent voice so it can proactively and effectively challenge government.

“NISTA should also be given the ability to mandate the use of best-practice tools like the Construction Playbook to raise delivery standards across departments, whether or not projects meet the £10bn ‘mega’ threshold.”

Click here to download the report