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Government must open up about risks to major spending projects

30 November 2022

Government must open up about risks to major spending projects  

 

PAC finds too many assessments of cost and feasibility on multi £billion government projects are missing in action

In a report today the PAC says departments across Government are not consistently producing cost and feasibility assessments of major projects or sharing them with Parliament. This impacts decision-making about whether a project or programme should go ahead, or whether it can be delivered with value for taxpayers’ money.  

Departments trying to deliver policy now face significant challenges with national skills shortages and the impact of record inflation. The Committee is calling on the Treasury and the Infrastructure & Projects Authority - that oversees big, long-term projects like High Speed 2 – to outline areas where these challenges may significantly change major programmes.  

Accounting Officer Assessments (AOAs) can set out the impact of these challenges on programmes and help ensure they are delivered to the standards of Managing Public Money. But the Committee says the Treasury is not doing enough to enforce compliance with new assessment requirements introduced in 2017. Since then, only 52 of 227 Major Projects produced AOAs.  

Many of the Assessments that are produced are of poor quality and do not provide the detail needed to ensure transparency on the value and efficiency of public spending. This year’s Government Major Projects Portfolio snapshot comprises 235 projects with a total whole life cost of £678bn. These projects represent a significant portion of public spending and huge potential benefits if delivered.

Chair's comments  

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:

“National, critical skills shortages and record inflation now pose major risks to the budgets and feasibility of major government programmes. The public spending squeeze will make effective delivery of major projects within tight budgets even more crucial. 

Accounting Officer Assessments have a crucial role in revealing the thinking of the civil service, separate to political decision making. They are an essential element of ensuring the government’s major, expensive projects measure up on transparency and cost effectiveness, and are on track to deliver what they promise. If and when major projects fail, at unacceptable costs to the taxpayer and potentially to society, government cannot say it did not have fair warning.” 

Further information

Image: HS2