Government Infrastructure - levelling up and looking forward
UK Parliament's Public Administration and Constitutional Affairs Committee (PACAC) has delivered a Report titled "Delivering the Government's infrastructure commitments through major projects (July 2020)" about the Government Major Project Portfolio (GMPP), of which a significant proportion of the value are related to infrastructure projects (£214bn of £448bn, IPA Annual Report 2019/20)
There's a lot to like
Which project professional wouldn't welcome the recommendation that wages should increase (para 113)?
What about the mention, 94 times in 42 pages, of the words, "benefit" or "benefits"? Music to my ears, as a benefits and value realization management professional. That's an average of more than twice per page, although it can get very dense in some paragraphs.
For those who live and work outside the metropolis, PACAC recommends that more projects are delivered in the rest of the country and not just London. They recognise that London is equipped to easily monetise any government investment that comes its way (through lobby groups like London First), and that the perceived lower returns for infrastructure investment which is not connected with London may need to be looked at in a different way to rebalance the country. This view is long overdue, and organisations like Transport for the North will surely be pleased. "And I would love it if there were jobs here), so my daughters could come home and still find decent work." (Hugo, Durham)
Benefits Realization Management
But there's a lot more that's solid common sense.
All of those mentions of "benefit" or "benefits" aren't wasted, the committee really understand the principles of Benefits Realization Management (BRM). These principles run throughout the report like a golden thread.
The report makes a number of recommendations:
Politicians need to explain what they mean by "levelling up", which presumably(?) aims to invest more in the people and regions that have got left behind by policies of the last 40 years, and expect that this investment will yield dividends in the long term.
The objectives to be achieved by projects need to be clear and accepted by stakeholders (see Stakeholder Engagement next), and there needs to be a clear logical link showing how the project will deliver those objectives (through what it creates, through benefits, and finally achieving objectives).
A number of the witnesses commented on HS2 (the hugely expensive rail link between two close cities, whose main benefit seems to be that it will cut 20 minutes off the journey time). The report does not reach any specific HS2-conclusions.
However, HS2 is a good example of a project whose objectives aren't clear. There seem to be a lot of Strategic Goals and Objectives, all given equal weight. Witnesses to the committee pointed out that projects are more successful where there is a dominant objective and a dominant benefit, although there may be many additional benefits both to the funding stakeholders and other stakeholders. The dominant objective allows for clarity in decision-making – are we making progress towards realising the big benefits and achieving the big objective (like the Olympics), or is it all a bit murky (like HS2)? And if it's a bit murky, is it wise to pour more taxpayers money into the project?
In spite of protestations and recommendations to the contrary, all too often the public consultation takes place after the decision. Stakeholders, including the general public, need to be able to influence the plans, as well as the decision on whether or not to proceed, or continue, with a project.
The success of the Northern Powerhouse, in the form of the Greater Manchester devolved region, could be repeated around the country. Many major infrastructure projects are too big for a single local authority to lead on commissioning, whilst at the same time central government is too remote and too focused on what's happening in and around Whitehall to understand and implement investments that improve quality of life out in the regions.
And that's the point really – quality of life. We pay our taxes to get quality of life. Whether it's better opportunities (jobs, business growth); better communities (a more pleasant environment, opportunities for education and leisure); better health (sports facilities, healthcare, social care and support in our weakest moments), that's what we pay our taxes for. And that's what government investment should seek to optimise.
Stakeholders should be consulted at all stages. Apart from anything else, the participation of stakeholders improves the likelihood of benefits realisation. After all, it is their use of the (infrastructure) investment as it was intended to be used, that creates value and maximises benefits. For this reason, the project leadership should keep coming back to the original objectives, firstly to confirm that they are still valid, and secondly to ensure steady progress towards optimising benefits in the course of achieving benefits.
Politicians need to recognise that major infrastructure projects don't fit neatly into the time scales between general elections. The people who make the decision to invest, both politicians and civil servants, need to be held accountable for the benefits that were promised, and whether or not they were achieved.
Witnesses told of civil servants who move from department to department, and of course cabinet ministers may change even more quickly. The incoming politician or project sponsor may not accept the promises and commitments of the original decision-maker, resulting in a different business case so they can claim success even with 3 times over budget costs.
The Committee recommends that the original decision-makers are brought back, both when the project is complete and handed over, and a period (e.g. 5 years) after delivery, to compare the benefits realised with the plan and commitment.
Witnesses pointed out that there is a woeful shortfall in capability. This was the main driver for suggesting that project managers deserve a pay rise, but it has an impact on all government spend, as there aren't enough skilled Sponsors, skilled major projects managers, or skilled contract managers, to deliver on government ambitions. It is to be welcomed that the government has established a Major Projects Leadership Academy (MPLA) at Oxford University's Saïd Business School, and a Project Leadership Programme at Cranfield School of Management. This may make up some of the shortfall over time. There were additional recommendations by the committee that ministers receive training to understand projects and investment, and that the civil service generally becomes more professional in this area. We look forward to seeing an increased focus on benefits realisation as well.
There's a well-known adage "what gets measured, gets done". It's certainly true in my experience - because the promises of future benefits aren't very specific, project teams measure what they can measure, i.e. project progress, and in the end, the specification becomes the key outcome of the project, not the benefits.
It's important to measure the right things. There's another adage that "you don't fatten a pig by measuring it." If the pig isn't growing as you expect you need to give it more food, to ensure that it will be ready for market and turn a profit for the farmer.
Witnesses to PACAC confirmed that reporting of major projects delivery needs to be far more rigorous, and that the right things (benefits) are measured over a sufficiently long period, to ensure that benefits are actually realised, and objectives actually achieved.
The PACAC proposed a number of key measures for IPA to increase longevity of benefits scrutiny including requirements that they:
- Undertake a Gate 5 (Operations and Benefits Realisation Review) in all cases before a project leaves the GMPP
- Include benefit plans, and trend data using standard financial measures accompanied by narrative on transformational benefits, for each project in the IPA annual report from 2021/22 (i.e. in addition to cost/schedule and delivery confidence rating),
- Assume responsibility for ongoing periodic reporting on 'past projects' to the Public Accounts Committee (PAC) e.g. at 5-year intervals after project closure. (Paras 80-84)
None of this is easy, or we'd already be doing it. But it is possible, and it is reasonable as we are talking about eye-watering amounts of public money (Government has promised £640bn in the 2020 budget speech).
All in all
All in all, the committee has done an excellent job of summarising what is already good, what is clearly not so good, and what needs to be done. And what needs to be done isn't beyond the means of the government or civil service, even with the Covid-19 challenges. Or perhaps because of the Covid-19 challenges – now is a great time to improve a lot of people's skills, when they aren't spending all day in meetings. However, we should be aware that none of this is new (See for example Government's Management of Major Projects; An interim report (October 2019) and Delivery Major Projects in Government; Public Accounts Committee (May 2016) and the APM Guide to Using a Benefits Management Framework and commentaries).
We look forward to seeing a report on progress of the implementation of this report, in line with the recommendations of this same report that progress is reported.
About the Authors
Dr Hugo Minney
Hugo is a Benefits Management SME ensuring benefits realisation management across the portfolio of programmes and projects in UK's largest civil nuclear facility.
He chairs the British Standards Institute panel on Benefits Management and APM Benefits and Value SIG.
Merv is PMI UK Digital Events Team lead, Secretary to APM Benefits and Value SIG and moderator of Government Project Delivery of Benefits Management Specialist Group.
He is the UK Customer Success Manager of Amplify™ - An Enterprise Software Solution for Benefits-led Portfolio Management
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