The document discusses over-optimism in government projects. It examines a study of 140 major projects that commonly underestimated resources and overestimated benefits while downplaying risks. Factors that contribute to over-optimism include behaviors and incentives of those involved, a lack of independent challenge and accountability, not properly involving stakeholders, weaknesses in the evidence base used, and complexity underestimation. The document provides examples and recommends learning lessons to address these issues through better behavior oversight, increased planning, use of historical data, stakeholder involvement, and external governance scrutiny.

1. Over-optimism in government projects
Helping the nation
spend wisely

2. Over-optimism in government projects
25 June 2015
APM Benefits Summit 2015: Over-
optimism in government projects
Bridget Jackson

3. Over-optimism in government projects
Overview
• 2013 examined extent of
over-optimism c. 140 major
projects
• Common theme –
underestimating resources,
overestimating benefits,
downplay risks
• Today will share findings
with examples

4. Over-optimism in government projects
Factors that contribute to over-optimism
Behaviours
and incentives
Lack of
independent
challenge and
accountability
Failure to
involve
stakeholders
Weaknesses in
evidence base
Complexity

5. Over-optimism in government projects
Behaviours and incentives
• Human nature
• “Strategic
misrepresentation”
• Short termism
• Cultural pressures
• Hide bad news
• Only share good news
• Failures to escalate
Mobile Technology in Policing

6. Over-optimism in government projects
Complexity
• Underestimate the
challenges in delivering
projects
• Constraints
• Dependencies
• Behaviour change
• Wrong assumptions over
ability to deliver:
• skills and capability
• Not set in context
Update on preparations for Smart Metering

7. Over-optimism in government projects
Weak evidence base
• Weaknesses in quality of
data and modelling
techniques
• Absence of
independent/expert
review
• Not using historical data
or experience from other
projects
Lessons from major rail infrastructure
programme

8. Over-optimism in government projects
Not involving stakeholders
• Failure to appreciate
influence/importance of
stakeholders
• Assumptions about
behaviour
• Missing opportunity for
reality checks
The failure of the FiReControl project

9. Over-optimism in government projects
Lack of challenge
• Ineffective challenge &
oversight
• Independent
• Expert
• Personal accountability?
• Invite external scrutiny
• Learning lessons from
previous projects
Shared services in the
Department for Transport
• Over-optimism in
estimates not challenged
Online tax returns
• Effective governance

10. Over-optimism in government projects
Learning lessons from our work on over
optimism
• Behaviour: outside view & challenge
• Complexity: resources invested in planning and
use of experts
• Evidence: Historical data/reference class
modelling
• Stakeholders: how have they influenced
change?
• Governance: NEDs, external scrutiny

11. Over-optimism in government projects
Other NAO guides and tools
• Initiating successful projects http://www.nao.org.uk/report/nao-guide-initiating-successful-projects-3/
• DECA http://www.nao.org.uk/report/deca-understanding-challenges-delivering-project-objectives/
• Over-optimism http://www.nao.org.uk/report/optimism-bias-paper/
• Assurance for high risk major projects http://www.nao.org.uk/report/assurance-for-high-risk-projects/
• Option appraisal http://www.nao.org.uk/report/option-appraisal-making-informed-decisions-in-
government/ and http://www.nao.org.uk/report/nao-briefing-appraisal-and-sustainable-development/
• Evaluation in Government http://www.nao.org.uk/report/evaluation-government/
• Guidance on monitoring and evaluation http://www.nao.org.uk/successful-commissioning/successful-
commissioning-home/monitoring-evaluation/