National Audit Office make series of recommendations to HMT and NISTA

The government must improve governance of infrastructure mega-projects after failures of schemes like HS2, according to the National Audit Office (NAO).

More robust assurances about affordability, value for money and feasibility were recommended by the public sector spending watchdog in a report published today.

There is no official definition of mega-projects, but according to the NAO, they share characteristics such as spanning multiple parliaments, involving multiple departments and stakeholders and are often transformational to the economy and society.

hs2

Source: HS2 Ltd

HS2 has regularly hit the headlines over problems such as increased costs with parts of the job having to be cut back because of affordability issues

The NAO used its back catalogue of work auditing major projects to identify the key characteristics of such schemes, which it says are typically more costly, innovative, risky, complex and strategically significant than other projects.

鈥淭his report offers important insights from the National Audit Office鈥檚 work on government鈥檚 largest and riskiest projects,鈥� said Gareth Davies, head of the NAO.

鈥淭hese lessons will assist the government as it makes changes to the way in which major projects are organised and overseen.鈥�

The government recently published proposed reforms to the planning system for major infrastructure and is set to publish a 10-year infrastructure strategy later this year.

The NAO has recommended to the Treasury and its newly merged major projects quango, the National Infrastructure and Service Transformation Authority, that it improve how it categorises and defines major projects according to their risk and strategic importance.

It also suggested the two bodies should improve the project gateway and business case approval process, and ensure that accountability for megaprojects sits in the correct place, and that roles and responsibilities are clear and understood.

鈥淢ega-projects often involve high levels of innovation, cost and risk, and can take decades to deliver and see the benefits,鈥� said Davies. 

>> Read more: MPs 鈥榮ceptical鈥� that private sector will step in to fund HS2鈥檚 拢6bn Euston scheme

>> Read more: New baseline cost estimate for HS2 may not be established until 2026 as project undergoes wholesale reset 

鈥淭his means government needs stronger governance approaches for these projects.鈥� 

Responding to the report, Geoffrey Clifton-Brown, chair of the House of Commons鈥� public accounts committee said that they had 鈥渟een time and time again how difficult government finds it to deliver mega-projects鈥�. 

鈥淗S2 is a case in point for the billions of pounds worth of taxpayers鈥� money put at risk due to failures in governance and oversight,鈥� he added. 

鈥淕overnment clearly has a long way to go to learn from and address the common issues that plague these mega-projects. 

鈥淭oday鈥檚 NAO report should serve as an important guide for how government can strengthen governance and improve decision-making in the riskiest and most complex projects it oversees.鈥�