When the facts change, I change my mind

After 20 years of delivering public sector projects, now more than ever, a depressingly common theme is emerging, which is that key public sector projects and programmes are failing to deliver. The HS2, Affordable Homes Programme and New Hospitals Programme are recent high-profile examples, where the National Audit Office has highlighted concerns in relation to value for money and lack of delivery to programme and budget. Here are my top 5 reasons as to why this is and more importantly, what we as an industry can do to address these all-too-common pitfalls.

1. Capacity and expertise

The lack of capacity both in terms of delivery and expertise is more challenging than ever. All too often, square pegs are placed in round holes, with senior and operational staff from client organisations and the wider supply chain not having the requisite experience and skills to deliver major capital programmes. When a major project does not have the appropriate capacity and expertise to deliver, this creates significant risk.

What can we do?

Provide senior leaders with the capacity to deliver and invest time and resource in recruitment of internal staff and appointment of consultants and contractors. When assembling a project team, remember the right appointments on a multi-million-pound project will pay for themselves many times over.

2. Planning approvals

Levels of staffing in planning departments have been severely impacted in recent years. Even the most straightforward planning application can take months, rather than weeks. The planning case officers who remain in post are often over-worked and are unable to appropriately resource major applications. Furthermore, finding and obtaining approval on development sites, particularly in the Affordable Housing sector means the ability to deliver is severely hampered.

What can we do?

Properly invest in providing appropriately resourced planning departments within local government and determine planning approvals within statutory timescales.

3. Partnering

Various eminent people including Sir Michael Latham (Constructing the Team) and Sir John Egan (Rethinking Construction) have published recommendations advocating mutual co-operation, appropriate risk allocation and shared financial motivation across the supply chain.

All too often, these worthy aims are abandoned when projects face challenges, with contractors, clients and consultants taking a risk averse approach, seeking to cover their respective positions. I believe clients, contractors and consultants all have a role to play here in changing this approach.

What can we do?

A root and branch look at how we properly embrace the sound principles of Egan and Latham is more important than ever. At the outset, these principles should underpin the vision and values of the project and should be re-visited at project gateways.

4. Market volatility

More than ever, we are encountering world events that can de-rail projects. In the last 3 years alone, the Covid pandemic, the Russia-Ukraine conflict and volatility in markets is making predicting cost, achieving programme and securing key materials more unpredictable than it has ever been. In response, instead of accommodating more float within programmes or including higher contingencies within our cost plans, we do the opposite when faced with challenging timescales and limited budgets. This leads to a depressing cycle of programme slippage and cost overrun meaning resource intensive value engineering and re-scoping.

What can we do?

We need to re-think how we programme projects and how we set budgets. At the budget setting stage, we need to include adequate contingencies and base our costs on the best market intelligence available. In terms of programming, rather than start with an unrealistic end date and work back, we should more realistically programme at the outset.

5. Joined up thinking

Time and time again, we are driven by external deadlines, needing to achieve spend deadlines for external funders. The truth is that public sector governance and approval processes are often not set up to respond to the challenging deadlines being set. Too often, we get caught up in protracted decision making, complex statutory approvals and a cycle of value engineering and re-scoping, which allied with points 1-4 mean we are setting ourselves up to fail.

What can we do?

We need to recognise the challenges and rather than have a top-down approach setting unrealistic delivery and spend deadlines. Allied to this, client organisations need to empower the right people to deliver projects, with incentives for the whole supply chain and client organisations.

There are no easy answers to the questions I have posed, but we can’t as an industry keep making the same mistakes and be surprised when the next major project or programme is in distress.