One third of major government projects "in doubt or unachievable": NAO

A third of major government projects due to deliver in the next five years are rated as in doubt or unachievable unless action is taken to improve delivery, the National Audit Office has reported.

The spending watchdog said it was “particularly worrying” that 37 out of 106 projects were rated as red or amber-red.

It added that initiatives had been designed to improve the oversight and delivery of these kinds of projects, but their impact had been unclear.

The NAO report, Delivering major projects in government: a briefing for the Committee of Public Accounts, suggested that the public sector had a poor track record in delivering projects successfully and that greater transparency was required.

There are currently 149 projects in the Government Major Project Portfolio, with a combined whole-life cost of £511bn and an expected spend of £25bn in 2015-16. Such projects require Treasury approval based on their size, risk and impact.

The NAO noted how the Infrastructure and Projects Authority (the former Major Projects Authority) and Whitehall departments had taken "many positive steps" to develop capability and provide greater assurance on improving project delivery.

“However, it is difficult to tell whether performance is improving without reliable and consistent measures of project success,” it said. “Despite some improvements in the level of information published on major projects, there are still a number of issues which make it difficult to form conclusions about trends in performance.”

These included the amount of project turnover in the Portfolio; the limited data published by departments; inconsistent reporting of costs; and no systematic monitoring of whether the intended benefits have been achieved.

The NAO said that nearly 80% of the Portfolio projects due to be delivered by 2019-20 were to either transform or change the way that services were delivered or accessed.

However, transformation programmes could present the greatest risk of failure and there was a need to balance ambition and realism in setting goals, it argued. “For instance, the Better Care Fund was a challenging initiative which ministers paused and redesigned after the early planning and preparations did not match its scale of ambition.”

The watchdog described progress in improving portfolio management as “disappointing”, with no single organisation having a view of the whole portfolio of government projects.

“The Portfolio provides increased assurance, and other central departments have an increased role in assuring, approving and improving quality of delivery,” the NAO said. “But an effective mechanism still needs to be developed for prioritising projects across government or judging whether individual departments have the capacity and capability to deliver them. The NAO has often reported on the difficulties caused for government projects by unrealistic expectations and over-optimism.”

Amyas Morse, head of the National Audit Office, said: “I acknowledge that a number of positive steps have been taken by the Authority and client departments. At the same time, I am concerned that a third of projects monitored by the Authority are red or amber-red and the overall picture of progress on project performance is opaque. More effort is needed if the success rate of project delivery is to improve. “