How Government Works: major capital projects – podcast transcript

Simon:  We’re here today talking to Dick Gill, Portfolio Manager at Audit Scotland, about Audit Scotland’s latest report Review of major capital projects in Scotland.  OK Dick, what’s this report about?

Dick:  This report looks at the major capital projects which the Scottish Government and the NHS are carrying out.  We’ve looked at public projects including roads projects, new and improved roads, railways, hospitals, museums, major IT projects, mainly construction projects.  The report looks at the progress of all 43 major projects that were completed in the five years up to last March and those projects cost around £800 million.  We’ve also looked at a sample, quite unusually a sample of, 15 current major projects and the projects we looked at currently in progress have an estimated cost of about £1.8 billion.  What our report does is we look at the success of those projects measures against the delivery against time and cost estimates, also against quality specifications and we look more broadly for assurances about project management in those projects.

Simon: And what have you found?

Dick:  Well the main finding really is that better information is needed about cost, timescales and intended benefits at the very early stages of projects to help decision-makers give more clarity about value for money.  So if I can just unpack that a little bit, early time and cost estimates needing to improve - we looked at all 43 projects done over the last five years and only about two fifths of those were completed within the cost estimate at the initial approval stage and only a third of those were delivered on time.  We did find, however, that contracts got better by the time the contract is accepted.  For example, four fifths of projects that we looked at were completed within 5 percent of the contract price, so that’s a significant improvement.  We give quite a lot of assurance in the report. We say that the project management is broadly effective although we do say that there’s room for some improvement and I think most important of all, I think we’ve concluded that we need to make it easier for people like MSPs for board members and others in similar positions to scrutinise proposals for major projects in future.  

Simon: Why did you do this report in the first place?

Dick:  Well the amount of money being spent by the public sector on these projects is enormous I think by anybody’s standards.  Projects currently in progress is about £5 billion – that’s about 100 projects – that’s about £1000 each for everyone in Scotland, so it’s an enormous figure. Of course that sort of investment has an impact on the country’s services and the economy so there’s a big public interest in the funding and the management of these projects and I think there’s also a big public interest in Audit Scotland being able to provide assurance, where we can do that, on the management of these projects.

Simon: What do you want to see happen now?

Dick:  Well, we want to see better time and cost estimates before projects are approved and we’ve made a number of other recommendations really to strengthen how projects are managed.  We also say the Scottish Government should strengthen leadership in this area through setting up a senior government-wide investment co-ordination and challenge function.  We’re also recommending the government collects information on all projects and get explanations for cost, time and quality changes and about lessons learned and, very importantly, we’re saying the government should report performance publicly on these matters. All the changes we’re recommending are really intended to reinforce openness and public accountability and help the government ultimately make good investment decisions.

Simon: OK Dick, thank-you very much for your time.