How can the UK better deliver its biggest infrastructure projects?

Mega-projects – a country’s biggest and most complex infrastructure projects – can be transformational.

But they represent a large commitment of public money. And they are hard to deliver.

Recent reports from the UK’s National Audit Office and the Office for Value for Money have looked into how the government can better manage these projects.

Their recommendations will help strengthen how projects are organised and overseen to reduce the risk of delays and cost overruns. The government has already taken many of these forward.

What is a mega-project?

These are the small number of public projects that are “particularly costly, innovative, risky, complex and/or strategically important”, according to the National Audit Office (NAO).

High Speed 2 (HS2) and the London 2012 Olympic and Paralympic Games are recent examples.

The scale of mega-projects means the consequences of getting them wrong can be much worse: higher costs, greater disruption and longer delays to essential public services.

What is the Office for Value for Money?

You might have heard of the National Audit Office, but maybe not the Office for Value for Money.

The Office for Value for Money (OVfM) is a temporary unit within HM Treasury.

Set up at the 2024 Autumn Budget, it advises the government on how to spend public money more efficiently and effectively.

The OVfM has made recommendations on how to prevent mega-projects from going over time and budget, which the recent 10-Year Infrastructure Strategy is taking forward.

Together, the reports cover a few key themes:

1. Mega-projects need to be treated differently than the rest of the government’s programme of work

The NAO research, published earlier this year, references the ICE's work on learning lessons from HS2.

It recommends that the government should categorise infrastructure projects according to their level of risk and strategic importance. There should be a defined category of mega-projects based on specific criteria.

This would distinguish projects which demand different governance arrangements. An example could be using project boards to better align funders and delivery organisations and give greater certainty.

Present clear plans to Parliament

Similarly, the government has accepted the OVfM’s recommendation that strategy and delivery plans must be laid in Parliament at the start of a project and updated at key milestones. This includes ministers making changes to the objectives or scope of the project.

These plans will be documents of a maximum of 20 pages that are drafted by the senior responsible officer (SRO) on the project. They must then be agreed with the relevant secretary of state and the prime minister.

The plans will include cost-ranges that are approved by an independent assurer.

The ICE’s view is that departments should avoid publishing estimated costs too early to avoid locking them in before the project is properly scoped.

However, the inclusion of cost ranges rather than singular project estimates is a very positive step forward.

2. Be clear about roles and responsibilities…

Mega-projects usually involve multiple government departments and other stakeholders.

It’s crucial that their roles and responsibilities are as clear as possible – especially when it comes to decision-making and accountability.

This clarity must include those not directly involved in governance – such as HM Treasury, the National Infrastructure and Service Transformation Authority (NISTA) or the government’s mission boards.

As the ICE has previously highlighted in its work on HS2, getting the right level of oversight for arm’s length delivery bodies is difficult. But it’s a critical factor in a project’s success.

3. …and prioritise capabilities

Mega-projects can take decades to deliver. Governance will need to adapt, and issues will be inevitable over such a timespan.

Resolving them can be especially difficult due to the project’s size and complexity.

It’s therefore essential to have the right people (brought in at the right time), behaviours and culture involved in overseeing mega-projects.

The OVfM acknowledges that the people with the right expertise should run delivery, with independent checks and assurance by those who are technically qualified.

Often, many layers of generalist civil servants are charged with reviewing and approving major projects.

Identifying who is responsible and ensuring they have the right expertise will mean that the government is better able to hold them to account for the success of the project.

This is supported by the OVfM’s push for HM Treasury to lift pay limits for staff working on mega-projects. This would give them the flexibility needed to attract and retain expertise.

4. Strengthen approvals

The strategic importance of mega-projects often creates pressure to start them quickly.

But vital preparatory work is even more important on mega-projects.

Committing to budgets and timetables before fully understanding delivery requirements can lead to cost increases or delays later on. As can starting mega-projects without a clear, strategic case that is backed by all stakeholders.

The NAO calls for stronger project gateway reviews (where project progress is assessed, and next phases approved) and business case approval processes early in the project lifecycle.

Its report references the ICE's call for tighter controls until design and planning are mature enough. And, for decisions on long term projects to be aligned to a central purpose.

OVfM goes further. They call for funding to be tied to these gateway reviews in the early stages of project development.

This should help make cost and schedule forecasts more accurate and give greater weight to the gateway review process.

5. More budget flexibility to improve outcomes

The OVfM says that once a final investment decision has been taken, there should be no annual budget reviews unless a project requires a financial reset.

Instead, mega-projects that move into construction will be given a fixed budget for the entirety of the project.

They'll also have the flexibility to move money around between delivery years up to a certain amount, approved by HM Treasury.

This will allow project teams to focus on the most efficient models that allow them to deliver on time.

Greater flexibility will be met with increased transparency, including a HM Treasury representative on the project delivery body’s board.