1) A third of the projects are rated "red" or "amber/red"
Of the 143 projects on the Government Major Projects Portfolio (GMPP) on 30 September 2015, 30% were rated red or amber/red, meaning they were deemed unlikely to deliver intended benefits without major changes. These projects account for around 22% of the total costs of the £405bn portfolio of government’s largest and most complex projects.
This proportion is up from the year before, when 25% of projects were red/amber red. However, the total number of red/amber red projects has actually fallen – from 48 in 2014 to 48 in 2015. The proportion rose because the GMPP itself shrank as a large number of projects were completed, paused or removed from the portfolio. This large change in the overall GMPP size reflects the fact that many were scheduled to end with the last parliament in 2015.
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The number of projects rated green or amber/green – that is, expected to deliver on time and to budget – fell from 72 to 39, or from 38% to 27%. This is in part explained by the fact that of the 76 projects that left the portfolio since September 2014, most were rated green or amber/green.
2) There are more "young" projects this year
As many projects left the GMPP – partly because lots of schemes were scheduled to complete at the end of the last parliament in 2015 – 31 new projects joined.
Only three of these projects were rated amber/green, and none were rated green. This is because new projects tend to have more uncertainties about funding, risks, and delivery constraints. So the IPA argues that the rise in red/amber red projects this year simply reflects the influx of new projects, and the departure of mature projects that were more likely to be rated as green.
3) The oldest project was started under John Major
The Ministry of Defence confirmed its order for a fleet of seven nuclear-powered submarines – the Astute class boats – in March 1997. Three of the subs have been built and the project, known as Astute Boats 1-7, is rated amber/red. It is not due to be completed until 2024, though the GMPP annual report indicates that a review was planned for 2016 to “to ensure that boats 4, 5, 6 and 7 approvals and financial provision are achievable".
With a forecast total cost of £9.9bn, it is running less than 5% over budget, according to data released with the annual report.
MoD notes accompanying the GMPP data indicate that it is likely to stay over budget: “The availability of resources, particularly in areas of highly skilled manufacturing staff continues to be challenging. It is likely that there will be some changes to the production schedule in the coming 18 months, and with this there is potential for some programme cost growth; this is not expected to exceed 5%.”
The MoD also hosts the second oldest project. This Watchkeeper project, working on drones (or an “unmanned aerial vehicle platform”) to provide battlefield surveillance and reconnaissance capability, began in March 1998. Other long-running projects include three Department of Health schemes which are successors to the ill-fated National Programme for IT, and which were all started in 2003.
4) The project with the longest life span is for dealing with nuclear waste
In 2008 the Department for Energy and Climate Change started looking for a site and building to safely dispose of and manage nuclear waste. This geological disposal facility project is scheduled to run until 2040, meaning it has a total life span of 32 years and will comfortably outlive the department that created it. The project is rated amber, and is running more or less to budget.
Another projected scheduled to finish in 2040 is the MoD’s Future Beyond Line of Sight project. Currently in the “concept stage”, this involves maintaining the current satellite communications system, and planning for its replacement. It is also rated as amber.
5) The cost of nine projects fell as a result of the Spending Review – while the cost of one went up.
Nine projects – four of them defence projects – mention either the Spending Review or the need to reduce departmental spending when explaining their lower-than-expected spend in 2015-16. These include two shared services projects, a school building project and a north Wales prison project. In some cases, the spending was simply moved to other years, so the overall cost of the project is unchanged.
At the Foreign and Commonwealth Office, however, the Spending Review caused costs to rise. Its Technology Overhaul project spent £25m in 2015-16, rather than the planned-for £13m. The departmental notes explain: “Delays introduced as a result of awaiting the outcome of the SR15 Settlement were necessary to ensure that the department could afford to deliver the full scope of Tech Overhaul, this explains the variance to the 15/16 allocation.”
As the departmental notes can sometimes be brief or imprecise, it’s impossible to know whether other projects that mention reviews or re-scoping were also influenced by wider departmental budget cuts.
6) Four projects spent more than double their expected budget in 2015-16
The MoD’s Crowsnest Programme had a 2015-16 budget of £4.08m. In fact, it spent £13.6m – a 234% increase. Departmental notes explain that this overspend was caused because work to “de-risk the CROWSNEST Design and Manufacture phase” was brought forward, and the overall budget remains the same, though an exemption under the Freedom of Information Act means we don’t actually know what that total budget is.
Other projects with a significant in-year overspend included Defra’s CAP delivery project (which spent £65m instead of £25m this year, because it adopted new contingency plans that drove up costs) and DECC’s project to build a new nuclear power plant at Hinckley (which spent £5.9m last year instead of £2.3m, due to changes in the project timetable).
In the Cabinet Office, a project to implement the new Civil Service pension scheme overspent by 105% – or roughly £2m – due to changes in the functionality and support offered to employers.
7) Over a third of projects are about "transformation"
There are 53 transformation and service delivery projects on the GMPP, with a total value of £116bn. These projects can be “particularly challenging”, the report says, as they typically involve “long term changes in the relationship between the government and the public” as well as organisational and capability changes in departments.
“Leading and managing transformation programmes successful requires a different approach from traditional capital programmes such as infrastructure,” the report adds.
So, the IPA has set up a peer group where the leaders of large transformation projects can exchange ideas and mutual support.
The largest chunk of the portfolio value comes from 29 infrastructure projects with a total value of £172bn, while 25 military projects account for £102bn of the portfolio value, and 36 ICT projects account for just £16bn.
8) Leadership is more stable
High turnover among project leaders (Senior Responsible Owners, or SROs) has long been a point of concern for ministers, MPs and civil service leaders. It’s good news, then, that the turnover rate for SROs at September 2015 was 7% – a reduction from a peak of over 25% in June 2013, and “well within expected margins for an average SRO tenure of four years,” according to the report.
This, the report says, is thanks to the practice of issuing SROs with letters of appointment that indicate they will stay in post until an agreed key milestone has been delivered. “This provides the SRO with more certainty with regards their accountabilities and authority, and enables better succession planning based on the tenure set out in the letters,” the report says.
Since their introduction in 2014, 150 letters have been issued and the “vast majority” of GMPP projects have an SRO with an agreed letter of appointment.
There is still cause for concern, however. Turnover among Programme Directors – accountable to SROs for the day-to-day running of a projects – remains higher than the IPA would like at around 12%. The report says the IPA is “working to understand this better so we can find the best means of addressing it”.