4 Observations of NAO report of the Major Projects Authority
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4 Observations of NAO report of the Major Projects Authority

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On 2 May 2012 The National Audit Office (NAO) wrote a report about the Major Project Authority (MPA) called Assurance for Major Projects. To save you reading the whole report I wrote this little ...

On 2 May 2012 The National Audit Office (NAO) wrote a report about the Major Project Authority (MPA) called Assurance for Major Projects. To save you reading the whole report I wrote this little report highlighting my Top 4 observations. Hope you find it useful. @MrPortfolio

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    4 Observations of NAO report of the Major Projects Authority 4 Observations of NAO report of the Major Projects Authority Document Transcript

    • 
 Top 4 observations National Audit Office report: Assurance for Major Projects 10 May 2012 www.MrPortfolioManagement.com @MrPortfolio 

    • Introduction: Key Facts:The National Audit Office (NAO) exists to o There are 205 projects in the MPAprovide independent opinion and evidence portfolio and 39 of those have ato assist Parliament to hold government to confidence status of red or amber/redaccount. I like them a lot. o Whole life costs are £376bnThe Major Projects Authority (MPA) wasset up in March 2011 under a prime o £345bn of that is spent by MoD, Energyministerial mandate to optimize the & Climate Change, Transport, Work &assurance of the government’s investment Pensions and Health.in major projects. The MPA is apartnership between Cabinet Office and o £14.6bn will be spent on these projectsHM Treasury reporting jointly to the this year, or £27.7k per hour dependingMinister for the Cabinet Office and the on how you look at it.Chief Secretary to the Treasury. I likethese guys too. o MPA undertook 172 reviews last year and plans on 205 this year.On 2 May 2012 The National Audit Officepublished a very interesting report calledAssurance for Major Projects. This littlereport summarises my top 4 observationsafter reading the whole review reportImportant Note: The views and opinionsexpressed in this document are those ofthe author and do not reflect the views ofany other party what so ever.You can download the full report from theNAO website:www.nao.org.ukwww.MrPortfolioManagement.com @MrPortfolio 

    • Observation 1: Observation 2:Resources, Resource, Resource Collaboration for the NationThe MPA has done some pretty fabulous The report highlighted that the success ofwork since it was started and this is the MPA depends on close collaborationrecognised throughout the report. Also with other government departments.highlighted is MPA’s biggest issue,insufficient resources. HM Treasury has attended 2 of the 6 MPA Board meetings, which isn’t very polite.Interestingly the report highlighted that theMPA is delivering more assurance reviews More worrying is that HM Treasury doeson more projects in more depth with 40% not use the information that MPA collatesless staff than the Office of Government on projects as part of its investmentCommerce (OGC) did. decision-making. Furthermore the report stated that Senior Treasury Officials “doThe problem is there are not enough not believe its role is to routinely considerreviewers, departments are not forthcoming the cross-government portfoliowith providing reviewers and those that do, perspective when making investmentonly work for 1 week twice per year. decisions”.Furthermore the use of consultants hassignificantly reduced (51 in Q2 2010 The MPA collects data from projectsreducing to 6 in Q3 2011 but has increased within a quarterly reporting process. If anyto 21 in Q42011). of you know how hard it is to put this in place across one organisation you’llMaybe it’s time to incorporate a mandatory 6 appreciate how difficult it must have beenmonths stint in the MPA for senior civil for all of government! Bit pat on the backservants as part of their career progression. for MPA I say!This exposure to project assurance will thenhelp them become the SRO stars of Not surprisingly though, the reportingtomorrow (like the Ozzies do). contains inconsistencies and varying levels of quality. For example over 10% ofFinally, if we are spending this kind of money projects did not include full life costs inon projects, surely a couple of pennies can their return for Jan 2012.be ring fenced for more consultants?(consider my hand raised). www.MrPortfolioManagement.com @MrPortfolio 

    • Observation 3: Observation 4:Benefits and loving A country’s Portfolio OfficeThe Audit report suggests that MPA needs One could view the MPA as the biggestto show its value, and therefore should baddest portfolio office in the country. Ittrack the benefits that are realised from focuses on the government’s portfolio ofthe recommendations it makes in reviews. major projects, it reports status, enhances decision-making, informs investmentWhilst I agree that showing the value of decisions (potentially) and providesMPA should be a priority, I’m not standards and assurance.convinced that tracking the benefits fromeach action would be the most effective Whilst the report highlighted that the MPAway to do it. would be providing an Annual Report in June, there was no mention of a need toDepending on the action, this could be create a Portfolio Delivery Strategy orvery challenging (and tenuous). Although prioritize the projects. Both would enableit would work for actions that have a direct increased visibility and better allocation offinancial benefit such as dismantling a resources.project (take a bow NPfIT). I appreciate that the thought of projectsWhilst the report identifies that the MPA being prioritized and resources beingcollect benefits information on projects, at shared across government may be a bitno stage does it identify the need for MPA utopian, but a man is allowed to dreamto ‘assure’ the overall return on investment isn’t he?and total loving that the country gets fromimplementing the investment of £376bn. However, to produce a decent Portfolio Delivery Strategy the MPA will need theThis is a shame, as you may have read in right data and given that the report statesmy last blog the potential of showing an MPA does not collect project start andoverall return on investment trajectory was finish dates (which I find hard to believe),getting me very excited, it still is! creating such a document would not be possible.www.MrPortfolioManagement.com @MrPortfolio 

    • I think that…MPA must be provided with the resourcesit needs to be successful.HM Treasury should attend all of the MPABoard meetings without exception.MPA should produce a cost and benefittrajectory based on all the business casesit has visibility of.MPA should publish a Portfolio DeliveryStrategy (or equivalent) that pulls it alltogether with timelines, priorities, costsand return on investment. Yes, this wouldbe tough, but nothing worth doing is evereasy.Government should mandate 6 monthsMPA experience as part of Senior CivilServant career paths. This would boostassurance skills and help these peoplebecome SRO stars of the future.MPA should be allowed to employ moreconsultants to help fill skills gap (handraised again).Final note to the reader.If you found this report useful, send me alittle tweet to let me know. It’s always niceto get a tweet.www.MrPortfolioManagement.com @MrPortfolio