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Infrastructure and Projects Authority

Volume 793: debated on Wednesday 10 October 2018

Question

Asked by

To ask Her Majesty's Government what action ministers are expected to take when they receive adverse reports on costs or progress from the Infrastructure and Projects Authority.

My Lords, the Infrastructure and Projects Authority provides confidential and independent reviews of major projects being delivered by government departments. While primarily aimed at project leaders, Ministers monitor delivery confidence in projects and intervene where necessary.

I am very grateful to the Minister for that Answer. Is he aware that the two departments with the biggest spend on the Infrastructure and Projects Authority list are the MoD and Department for Transport, with about £130 billion each? HS2 is by far the biggest project on the Department for Transport’s list. In my book, it is coming up to between £50 billion and £100 billion. The IPA’s red/amber/green traffic light analysis on HS2 says that for six years it has been amber/red, which means:

“Successful delivery of the project is in doubt, with major risks or issues apparent … Urgent action is needed to address these problems and/or assess whether resolution is feasible”.

What have the Government been doing over the last six years with HS2 being at amber/red? Did they talk to the Department for Transport and what was its answer?

I am grateful to the noble Lord for trailing his supplementary question in the House magazine. To put this into context, the IPA was formed in 2015 to help the Government to deliver critical national infrastructure projects. It does this by commissioning independent reviews, which the noble Lord referred to. It then gives a rating to the relevant projects. Those ratings are taken very seriously, as I said in my initial reply, by the project leaders in the departments and by Ministers, who take action when necessary. After the rating has been allocated to a particular project, the IPA and the relevant department have an ongoing dialogue to ensure that milestones are met and that projects meet their commitments. The noble Lord mentioned £50 billion. That is not a figure that the department recognises. The estimate is roughly half that.

My Lords, the noble Lord has given a very interesting answer, but he did not address the central question that my noble friend asked: what did Ministers do in response to those red/amber ratings in this case?

As I said in my initial reply, the reviews are primarily aimed at the project leaders. They give them advice on how to identify risks and take mitigating action to ensure that those risks are circumvented to ensure that the project hits the relevant milestones. There might be occasions when Ministers have to intervene, for example, if some legislative change is needed or if fresh estimates and more money are required from the Treasury, but for the most part the reviews are aimed not at Ministers but at departmental leaders. As someone who has been a Minister, if I was in charge of a project that had a red tag attached to it by the IPA, I would take a very close interest in its progress and make sure that it was delivered.

My Lords, I suggest to the Minister that if he were in charge of a project and he saw an amber/red, he would find within his department very few resources with the kind of expertise, training and coalface experience to be able to come to grips with these large, complex and high-risk projects. Will he take back to the Government the need to completely relook at resources and staffing against these projects? It is not the standard civil servant, nor the management consultants who are required; it is hard-bitten folk with real experience of the relevant industries, and the Government should start to put that rapidly in place.

The noble Baroness raises a very important issue. If she looks at the annual report of the IPA, she will see the action it is taking in order to make sure that the Civil Service has exactly the skills and resources it needs. There is a fast-stream process and it is recruiting graduates and providing leadership programmes in order to ensure that the Civil Service does indeed have the capacity to manage these very large and costly projects.

If my noble friend’s reply to the noble Lord, Lord Harris, is that this signalling system, whatever it is called, is for the project managers, then the question perhaps ought to be reformulated: what have the project managers been doing while the lights have been flashing?

The project managers are frequently asked to appear before the PAC or the NAO in order to answer precisely those questions. If my noble friend looks at the relevant recent reports of the PAC and the NAO, he will see that they,

“recognise the steps it has taken to strengthen project assurance, improve transparency and introduce project leadership training”.

More recently, in a recent report on property acquisitions by the Department for Transport in relation to HS2, the NAO noted that positive steps have been taken,

“to develop capability and provide greater assurance on improving project delivery”.

No one would be happier than me if civil servants were to answer this question rather than Ministers.

Does the Minister agree that if any management techniques such as red, amber and green flags were available in the 1830s, the London to Birmingham railway would never have been built and there would have been red flags against pretty much everything? Will he ignore the Jeremiahs and get on with the project of building HS2, which is of huge importance to the West Midlands? It is a clear statement of confidence in the future.

I say to the noble Lord that I was around 20 years ago during the gestation of HS1 and precisely the same arguments were adduced against that: it was environmentally unsustainable; it was not value for money; there were other, greater priorities. I do not think that anyone in your Lordships’ House today would now argue that we should not have gone ahead with HS1. My own view is that in 20 years’ time, or whenever HS2 is complete, the same view will be taken of HS2.

The Minister will be aware, of course, of the IFG report entitled What’s Wrong with Infrastructure Decision Making? produced in 2017. I hope he has had the opportunity to look at its recommendations and will explain to the House which of those recommendations the Government have implemented. Also, when he talks about the skills needed by civil servants, will he accept that in these long-term projects the turnover of project managers is far too frequent? There is a stop–start approach, when what is needed, as well as the skills, is that civil servants, or whoever is in charge, should undertake a project from beginning to end so that we can see some continuity.

I concur with that observation. There is a strong argument for having continuity of leadership within departments when you have these projects that run over many years. But as I said a few moments ago, the IPA is seeking to address that problem by building up the skills within the Civil Service with a new leadership programme and other initiatives. But I take the point, and I will feed it back to the IPA and the departments, that continuity within project leadership is essential if these projects are to be delivered within budget and on time.