UK government spending on major capital projects slammed

23 November 2009

23 November 2009 | Allie Anderson

Lack of clarity on the requirements of major UK public sector projects has led to huge overspending, research has found.

A study carried out this month by the Taxpayers' Alliance (TPA) looked at a sample of 240 government projects and found a total net overrun of more than £19 billion. This is equivalent to more than £750 for every household in Britain.

Of the projects the TPA examined, the average overspend was more than 38 per cent. The largest cost overrun was found in the NHS National Programme for IT, which is currently running £10.4 billion - 450 per cent - over budget.

Earlier this year, the programme was given until the end of this month to progress or face being scrapped.

The TPA judged the worst department to be the Ministry of Justice, which has two projects overrunning by an average of 163 per cent. These are the Libra project to update computer systems in magistrates' courts for Her Majesty's Courts Service (HMCS) and the National Offender Management Information System (Nomis), a database for storing and sharing information about criminals.

Uncertainty about a project's requirements from the start of the contract is one of the problems that commonly lead to overspend, according to the report, Out of Control: How the Government Overspends on Capital Projects. This is perpetuated by changes in what a project is expected to deliver, leading to delays and adding to the overall cost.

The report said increased productivity among public sector staff, including buyers, would need to accompany spending cuts in order to counter the overspend. This echoes a recent study by the National Audit Office, which highlighted the need for government departments to make better use of procurement expertise in order to keep costs down (News, 19 November).

John O'Connell, political analyst at the TPA, said: "Too many projects are coming in late and over budget, and this failure is costing the taxpayer billions, endangering essential services.

"This can mean doctors having to work in outdated hospitals or soldiers on the front line having to use inadequate equipment, despite the taxpayer having paid handsomely for new facilities or kit.

"Sadly, it seems like the public sector's record is getting worse, not better, over time. The state of the public finances means that it's more important than ever to ensure value for money is achieved."

A Ministry of Justice spokeswoman said: "We are committed to implementing systems that maximise efficiency in the criminal justice system for the benefit of victims and witnesses. Steps have been taken to ensure lessons learnt from these projects are implemented.

"We are committed to continuing the successful implementation of the Prison-Nomis project, which is on track to deliver within budget and time under the revised Nomis programme.

"The highly complex Libra system was successfully rolled out in December 2008 and provides direct links from magistrates' courts to criminal justice partners. This has delivered an integrated national IT system and case management application, improving efficiency across HMCS."


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