Treasury ignores advice on major projects

16 October 2012

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16 October 2012 | Adam Leach

The Treasury should pay more attention to the advice it receives from the Major Projects Authority (MPA) on whether major investments are delivering value for money.

In a report published today, the Committee of Public Accounts called for a “stronger link” between the MPA, which oversees high-risk government projects, and the Treasury. The committee said it had “long been concerned” the government was ignoring warnings raised by the MPA.

It called for new arrangements to be put in place, whereby the MPA sets out a conclusion on whether projects should “continue, be stopped or reset”, which the Treasury should adhere to. The MPs also called for the MPA to provide more regular updates on how major government investments are progressing.

In a statement, Margaret Hodge, chairman of the committee and Labour MP, said: “We are also concerned that the government has not met its commitment to transparency and published information on the status of major projects. In the light of widespread concerns over larger projects, such as whether Universal Credit can be delivered on time and within budget, we need to receive annual updates on performance.“

Founded last year, the MPA, a partnership between the Cabinet Office and the Treasury, is responsible for overseeing more than 200 projects worth £376 billion in taxpayer funds.

While it operates from a smaller budget than its predecessor, which sat within the Office of Government Commerce, its workload has increased. This led the committee to query whether the MPA had sufficient funds. “The authority and HM Treasury should quantify the return on investment from the authority’s work to identify whether further investment would benefit the taxpayer,” said the report.

A joint statement from Her Majesty's Treasury and the Cabinet Office, said: “We absolutely agree about the importance of the Major Projects Authority (MPA) and are convinced that it is right to focus on the biggest and most complex, and therefore risky, projects. The MPA and Treasury work together to improve delivery and maximise value across the Government’s biggest projects, and they will continue doing so.”

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