The National Audit Office is concerned about the potential failure of major ICT, infrastructure and construction projects and has warned of the need to improve project delivery. The NAO report highlights that a third of projects due to deliver in the next five years are rated as being in doubt or unachievable if action is not taken to improve delivery.

There have been initiatives designed to improve the oversight and delivery of projects but their impact is unclear, and it is of particular concern that there are 149 projects in the Government Major Project Portfolio with a combined whole-life cost of £511 billion and an expected spend of £25 billion in 2015-16. These projects require Treasury approval based on their size, risk and impact. The public sector as a whole delivers many more projects outside the Portfolio, for example, through arm’s length bodies and other bodies such as Network Rail.

The public sector has had a poor track record in delivering projects successfully. The high profile Universal Credit Programme which will roll up six benefits into a single payment and will transform the Government’s approach to welfare is a typical example of how management weaknesses bring disaster. Two years into the project it was realized that the system could not deliver the desired outcome. A new system was designed and is currently under construction. The original system is now used for piloting and training.

Transformation programmes, such as Universal Credit, can present the greatest risk of failure and there is a need to balance ambition and realism in setting goals. For instance, the Better Care Fund was a challenging initiative which Ministers paused and redesigned after the early planning and preparations did not match its scale of ambition.

The concern of the NAO is that nearly 80 per cent of the Portfolio projects due to be delivered by 2019-20 are to either transform or change the way that services are delivered or accessed.

The Infrastructure and Projects Authority (the former Major Projects Authority) and departments have taken many positive steps to develop capability and provide greater assurance on improving project delivery. However, it is difficult to tell whether performance is improving without reliable and consistent measures of project success.

Despite some improvements in the level of information published on major projects, there are still a number of issues which make it difficult to form conclusions about trends in performance. These include the amount of project turnover in the Portfolio; the limited data published by departments; inconsistent reporting of costs; and no systematic monitoring of whether the intended benefits have been achieved.

Progress in improving portfolio management is disappointing with no single organisation having a view of the whole portfolio of government projects. The Portfolio provides increased assurance, and other central departments have an increased role in assuring, approving and improving quality of delivery. But an effective mechanism still needs to be developed for prioritising projects across government or judging whether individual departments have the capacity and capability to deliver them. The NAO has often reported on the difficulties caused for government projects by unrealistic expectations and over-optimism.

Amyas Morse, head of the National Audit Office said:“I acknowledge that a number of positive steps have been taken by the Authority and client departments. At the same time, I am concerned that a third of projects monitored by the Authority are red or amber-red and the overall picture of progress on project performance is opaque. More effort is needed if the success rate of project delivery is to improve. “