The National Audit Office (NAO) has called for the status of high-risk projects in government, including major IT contracts, to be reported publicly to reduce the risk of project failure.
In its ‘Assurance for high risk projects’ review, the NAO recommended a central, integrated, mandatory system of assurance be established, as opposed to the fragmented system currently in place. In line with the new coalition government’s efforts at transparency, NAO also said that the status of high-risk projects should be reported outside of government.
The existing assurance system is made up of a number of components, including the Office of Government Commerce’s (OGC) Gateway Reviews and HM Treasury’s Major Project Review Group (MPRG).
The Gateway Reviews provide an independent, point in time review of project status before a key decision point in the project lifecycle, while the MPRG validates and approves process for high-value projects (more than £1 billion) or those that are particularly innovative or complex. The MPRG can also recommend that a project continues or is stopped.
Gateway Reviews are by far the most common, having performed 1,288 reviews up to March 2009 since it started in 2001, compared to the 27 reviews MPRG has performed since it started in 2007. It is also the most expensive, costing government £5.7 million (for 143 reviews) in 2008 to 2009, while MPRG’s cost to government in the same period was £1.6 million (for 19 reviews).
However, the review found that as well as the lack of integration, despite the the high costs of assurance to government, there was not a clear, enforceable mandate for assurance across government and consequences for non-compliance.
Amyas Morse, head of the NAO, said: “A new mandatory system of assurance for high-risk projects is needed. This will help to reduce the financial risk to the taxpayer and increase the likelihood of successful project delivery.
“The new system should make greater use of hard evidence in judging whether the elements fundamental to successful project delivery are in place and operating effectively.”
In particular, the NAO report recommended that public reporting of the status of high-risk projects, like the one in place in the United States government for IT projects, was a priority. This is not currently available in the UK, and would help reduce a burden on the OGC.
“Transparent and open government is a lever available to help deliver better outcomes in projects and strengthen accountability. Departments and OGC currently deal with repeated requests for project status information,” the review said.
Furthermore, NAO recommended that assurance is started as soon as possible in a project to avoid risks down the line, and that assurance should be based on a high level of both quantitative and qualitative evidence. It also said that a more integrated system would allow lessons learnt to be shared routinely and systematically across government.