“We support Government’s ambition to eradicate the poor performance which has led in the past to the failure of major projects. The launch of the Major Projects Authority was a big step forward for the central assurance system and the Authority is already having a significant effect. Strong ministerial sponsorship, and the work of key individuals, has brought us to where we are today, but we are still at the beginning… If the new system is to be ‘built to last’, the Major Projects Authority needs to carry out the initial commitments to public reporting and be part of more fully integrated assurance across Government.”
Amyas Morse, Comptroller and Auditor General, National Audit Office, 2 May 2012
The operating environment
The operating environment in which departments set up and deliver projects is often less than optimal: portfolio management is not consistent; resource and issue management is frequently reactive; and project delivery is still not being given sufficient attention and importance within Government. The power of project delivery is also compromised where Senior Responsible Officers and Project Directors have to deliver the most complex major projects within organisation and governance structures that are not designed for that purpose.
The MPA has begun work to understand the ideal operating environment for major projects so that they can be set up to succeed from the start. One of the first steps in this process will be to enable departments to make informed decisions about their portfolios, aligned to strategy, deliverability, resource implications and co-ordination with other projects. Building on examples already in place, the MPA will help departments to introduce a benchmarked portfolio management system and roll that out across Government.
One significant element of the work on the operating environment in departments will be effective portfolio management. The MPA will work with departments to ensure that they are able to take prioritised planning and performance management decisions on projects at departmental board level through the introduction of a sophisticated portfolio oversight group model. Once introduced, the aim is two-fold. Firstly, to use departmental-level information to make whole Government project decisions building on the existing reporting through the Government’s Major Projects Portfolio; and secondly to drive capability improvements through the Major Projects Leadership Academy, to improve the chances of project success in departments.
Achievements and learning
In the past there has been no systematic means of learning from previous successes and failures at the point of initiation of a new major project. Activities for capturing, storing, evaluating and using lessons learned have been sporadic and frequently introspective. Capturing best practice from other sectors in the UK and international approaches has not been commonplace for major Government projects. Repeating the same critical issues and mistakes in the delivery of major projects is what Government is striving to eradicate.
The MPA now hosts the Olympic Delivery Authority’s Learning Legacy website in its current form. The intention is to apply the lessons from the success of the London 2012 Olympic and Paralympic Games to other major projects. Since its creation in 2010, the MPA has introduced new levels of scrutiny and assurance to the London 2012 project and others like it. There are more than 200 complex schemes under way, some even larger than London 2012, each vital to the future prosperity and security of this country.
“The Learning Legacy framework is the embodiment of a new benchmark that has been created in delivering Europe’s largest construction project to the ultimate deadline and within budget. The scale and speed of the co-ordinated UK effort to build the venues and infrastructure is unprecedented and the knowledge and lessons gained during construction will both benefit the industry and act as a catalyst for inward investment.”
John Armitt, Chair of the Olympic Delivery Authority, October 2011
The Learning Legacy site provides a goldmine of knowledge which we must not waste. Our aim is to build on the work of the Olympic Delivery Authority on capturing lessons learned from the major constructions for London 2012 and best practice in the private sector and internationally. The MPA is currently examining options to create a single digital platform for projects best practice which will store lessons learned in a searchable, dynamic, easy to use resource library and shared online space for the project community (managed by the MPA). It will provide an opportunity for the MPA to celebrate success, and combine and share learning from and for the project delivery community, including current and future project leaders, and MPLA cohort participants and alumni.
Case studies about previous Government projects, as well as global private sector projects, will be increasingly used as material for the MPLA. Important outcomes from discussion and engagement at the MPLA will also be captured as part of this work. These findings from both the public and private sector will be disseminated via the CSPLN.
With construction fully integrated into the Major Projects cluster, the forthcoming priorities for the team will include the publication of:
• The report on the study into the effectiveness of frameworks;
• The Government construction pipeline;
• End of year Project Bank Account funding through public sector contracts; and
• End of year cost reduction savings against a target of £350 million.
Additionally, external events such as Ecobuild and the Government Construction Summit in July will further showcase the progress of the Government Construction Strategy.
As the Public Accounts Committee (PAC) has rightly identified:
“The Authority has much more work but far fewer resources than the part of the Office of Government Commerce it replaced. The creation of the Authority is a very welcome development. With a budget of £6 million and a 40% cut in staffing there are inevitably questions over whether it can achieve the improvements intended. Inevitably, the Authority has to focus on the biggest, most risky projects. This raises the risk that significant problems within lower priority projects in the Authority’s portfolio may be missed. The Authority and HM Treasury should quantify the return on investment from the Authority’s work to identify whether further investment would benefit the taxpayer.”
The Government has commissioned work to identify whether further investment would benefit the taxpayer and quantify the return on investment from the Authority’s work. The MPA has developed a performance framework which will systematise its activities and demonstrate clear links and a better understanding of its work, impact and value to projects. This work is currently at the design phase in advance of engagement with departments. Additionally, the performance framework will ensure that accounting officers concentrate on responding to projects that experience delivery difficulties. This work will build on existing work streams to introduce better oversight of the portfolio of the Government’s most significant projects and their progress to successful delivery.
“The creation of the Authority is a very welcome development.”
Public Accounts Committee
Strengthening the MPA
As announced in the 2012 Autumn Statement, the MPA is working with Infrastructure UK to carry out a detailed assessment of Whitehall’s ability to deliver infrastructure. This builds on its existing work to increase its commercial expertise to boost the delivery of growth-enhancing infrastructure projects across Government. To improve the pace and delivery of public infrastructure projects the Government announced plans in the Budget to create a central pool of commercial infrastructure specialists who will be deployed across Government. Tough new Infrastructure Capacity Plans are being developed to drive forward progress in key government departments.
We are determined to go further. The PAC has rightly identified the important role the MPA plays in enforcing a tough new assurance regime and raising leadership standards within the Civil Service. Equally, it has recognised the limited resources in which it currently operates, and that this needs to change to realise the full extent of intended improvements. Building on the significant foundations laid by the MPA since its inception, the Government announced in its Autumn Statement 2012 that the MPA would be enhanced. It commissioned Lord Browne to lead a review to ensure that the structure and operation of the MPA are built to last.
The Lord Browne report was published on 27 March 2013. Lord Browne puts the MPA at the heart of how Government can drive forward further project delivery improvements. In considering how we take forward his recommendations, the MPA’s central role, mandate, priorities, operating model and capacity in the enhanced remit will be developed.
Making the right start
As Lord Browne rightly pointed out, we want to set the highest possible standards right through the project. It is essential that projects get off the ground from the best possible footing. We will invest time and resources to ensure that our project assurance processes are consistently and rigorously applied so that risks are raised and managed.
Our work to attract, retain and train the right people with the right skills required for leading and delivering all Government major projects to successful outcomes continues at pace. Having only the best project leaders and project teams in place is crucial to this success.
The MPA will work to empower project leaders to be able to pause failing projects and when necessary, call time or time out on undeliverable projects. We will work with departments to realise this step change, sending the right message and culture from the top down that delivering world-class projects matters.
Learning the best lessons from the private sector, a systematic and full approach to portfolio management will be introduced across departments, with the GMPP at the centre, enabling spend to be prioritised.
The MPA mandate makes it very clear that Starting Gate reviews are an essential part of this process which we will apply consistently. This will ensure that no new project gets the green light without early scrutiny. We will test the deliverability of projects so only those that have a strong chance of success are allowed to proceed, and will work with HM Treasury to ensure that approval is withheld unless a project can start or continue.
Even with these plans in place, by their very nature major projects will always run into problems. But by the same token, as they are high risk and high spending, the MPA is best placed to scrutinise at every level and drive the successful delivery of major projects across Government.