Executive summary: making projects world class
The MPA was set up in 2011 with tough new powers to improve the performance of Government’s major projects. This report shows that we are on the right track. By intervening in failing projects the MPA has already saved taxpayers £1.7 billion. Better assurance and leadership means that we are set to double the success rate of major projects from less than a third before 2010 to well over two-thirds.
This report outlines further reforms to continue our drive for improvement and is, in itself, a major step forward. For the first time ever the public can see how these vital projects, which they pay for, are progressing. It is not easy for any Government to expose the state of its most complex and high risk projects but this unprecedented transparency will help prevent problems being hidden and left to spiral out of control.
Before the last general election, there was no accurate picture of what was happening with projects across Government. Problems were swept under the carpet where they festered. Now with the Government’s Major Projects Portfolio (GMPP), Ministers and senior officials have a firm grip on all 191 major projects.
Number of projects (by department)
Quarter 2, 2012-13
The total whole life cost of all the projects on the GMPP is £353.7billion. Projects managed by just ten departments account for 98% of the cost. The Ministry of Defence (MOD) has the highest published total spend at £88.1 billion. MOD also has the highest number of projects with 36 listed on the GMPP. The overall picture shows that there is no correlation between the size of the department and the size of its portfolio. One of the smallest (DECC) is managing 12 major projects, the same number as Department for Work and Pensions (DWP) which is one of the largest departments. The distribution of delivery confidence (RAG) ratings shows a high proportion – the majority – are on course to deliver successfully to time and budget.
Working in partnership with HM Treasury we have, for the first time, aligned the assurance and approvals processes. MPA assessments are now a key consideration in HM Treasury decisions to approve both business cases and funding. Where necessary, we will recommend the cancellation or closure of a project. These cases are rare, but must be swiftly resolved to ensure minimal further public expense. The National Programme for IT and FiReControl are examples of this.
The MPA has reduced the cost of project assurance by 24% from £8.3 million in 2010 to £6.3 million this year. Much of this saving has been achieved by building Civil Service expertise and ending reliance on expensive consultants. Before the MPA was set up only 45% project reviewers were civil servants. We have turned this around so in the year 2011 to 2012 86% were civil servants and just 14% were consultants. In 2012 to 2013 this improvement continues, with 87% of project reviewers being civil servants and only 13% consultants.
Effective leadership is vital to the successful delivery of all major projects and is a priority in the Government’s Civil Service Reform plan. In February 2012, we launched the Major Projects Leadership Academy (MPLA), in partnership with Deloitte and Saïd Business School, University of Oxford. More than 90 project leaders have started the academy training and we are on track for all to have done so by the end of 2014. In the future no one will lead a major project without having first completed this training. This forms part of a wider approach to develop a properly supported project leadership profession within the Civil Service, which recognises and links performance to career progression.
These improvements are just the start. Over the past two years we have studied what goes on in every department and have uncovered serious weakness which this Government is determined to address. Persistent failings have frustrated Ministers andCivil Servants who want to get on and do their job. Now Ministers and Senior Civil Servants are working together for a lasting solution as the public rightly expects.
Our key concern is the operating environment in which projects are managed. Project policy and project delivery have often been disconnected. This means that decisions about what projects are expected to achieve have been made without proper attention to critical planning, resource allocation and governance arrangements. The MPA will develop a standardised portfolio management system which will be rolled out across Government. It will set out clear lines of accountability to be applied consistently in all departments. We will not allow good project management to be left to chance.
We have also been surprised by the poor quality of project data which is collected and recorded. This has been an impediment to effective assurance and also means that mistakes are being repeated because lessons are not being recorded and shared. The MPA has already taken control of the Olympic Learning Legacy website and is examining options to develop the service as a central archive for project data. This action has huge potential to help project leaders avoid common pitfalls and share solutions, not just in Government but in the private sector as well.
By publishing this annual report alongside the departmental project data, the Government is shining a spotlight on all major projects to continue to improve project delivery. Allowing people to see how major projects progress year-on-year will eliminate complacency and help to raise the success rate. We are embarking on a radical departure from the past by publishing the status of all our major projects and explaining the actions we are taking.