Skills gaps leave government departments in weak buyer position

A review of large technology and infrastructure projects has found authorities and public sector organisations are too dependent on suppliers, and vulnerable to price escalations and delays as a result.

The Public Accounts Committee report identified a widespread shortfall in skills across the civil service. This means departments “cannot act as an intelligent client” because they do not have sufficient in-house experience in project management, including new IT rollouts. 

This is despite highly publicised initiatives to help ensure major undertakings are accurately costed, including a £150,000 spend on the Benchmarking Data Service. Housing information on 6,000 projects, this includes 4,673 road schemes, 1,298 railway developments, and 123 healthcare infrastructure improvements.

Another example is the multibillion-pound Synergy programme, designed to bring the Home Office, Defra, and Ministry of Justice onto one shared services platform. Consultants have been brought in to try and ‘reduce bias and support a realistic business case’ for the scheme, which is being rolled out at a time when 70% of major government projects of this kind fail. This leads to increased expenditure and long delays in achieving core goals.

‘Optimism bias in Government is a significant factor in nearly every project we look at. Another, related factor is a tendency in Government to approve projects before they have been developed sufficiently for there to be confidence in the accuracy of the cost estimate,’ the report said. 

While the rollback on HS2 was cited as indicative of the problem, as Infotec reported this week, IT systems are also proving to be a huge challenge. West Sussex’s adoption of the Oracle system is set to cost 20 times the original intended price. The same cloud-based software has been adopted by Birmingham City Council, the UK’s largest local authority, with expenditure expected to double, rising from £25million to £45million at the last estimate. 

‘Over the coming years, Government spending on major infrastructure projects is set to rise to unprecedented levels,’ said Dame Meg Hillier, Chair of the Public Accounts Committee. ‘Such projects present unique and novel challenges which Government must navigate if it is to secure value for public money.

‘Without a robust market for essential skills in place, these are challenges the UK will fail to meet, as shortages push costs up in a globally competitive environment,’ they continued. ‘All too often we see projects and programmes that are poorly managed and delivered late and over budget. The failure to ensure projects have robust impact evaluation plans in place is symptomatic of the short-term mentality dominating these processes. The Government must encourage cross-departmental learning if we are to avoid repeating past mistakes.’

Image: William Warby