Lessons should be learnt from major programmes to ensure better future delivery according to a new report by the National Audit Office, which echoes calls made by the Institution.
The practice of fixing costs for major projects before initial estimates are complete needs to end.
Calls for this by the Institution have been echoed today in a report issued by the National Audit Office (NAO).
The report, Lessons learned from Major Programmes, recommends that government learn from the lessons of recent major programmes from across Whitehall to better deliver projects in the future.
It looks at several major programmes, including Crossrail and HS2, to examine the root causes of common problems, such as missed deadlines and budget overspends. It identifies four keys areas where the Government can improve performance, such as ensuring clear alignment on the objectives and scope of a programme from the outset.
The findings back those set out in a policy paper by the Institution of Civil Engineers last year, which looked at the reasons why major infrastructure projects regularly cost more than is estimated and run overtime. In it, the ICE recommended that contracts for infrastructure projects should be awarded based on a cost estimate range, using a should-cost estimate as a reference point, with an amount of contingency allocated appropriately.
Responding to the publication of the National Audit Office’s report on lessons from major projects, Nick Baveystock, ICE Director General, said:
“This report comes at a significant time, on the cusp of a Spending Review that will deliver more money for infrastructure. The practice of identifying fixed costs for major infrastructure projects, before initial plans and groundwork is complete, fools nobody – this report recognises the need for this practice to end.
“Public confidence in our sector will improve greatly if they can see the stated benefits of the major projects we deliver. There are some easy changes set out in the report that government buyers would be wise to adopt.”
The NAO’s report makes similar findings to the ICE, by recommending that senior decision-makers ensure that they have a better understanding of the estimated costs, including any risks or uncertainties with the project that might have an impact. Less weight should also be given early estimates, which should be used only as an indication to guide long-term planning until more details are know.
The NAO also welcomes a move to range estimates, rather than single figures, but cautions that it is still important to understand any risks or uncertainties with a programme that could cause it to go beyond those figures.
Later this year, the Institution will be publishing the findings of a major ICE-commissioned review into the delivery of complex infrastructure projects. It will endorse a systems-thinking based approach and will offer eight guiding principles aimed at building this capability in the profession.
To be one of the first to know more, sign up to our Strategy Session on the 15 December.