NAO calls for mandatory assurance system for central government projects

The National Audit Office has called for a central, mandatory system of assurance for central government projects.

The spending watchdog acknowledged that there had been improvements in the running of high-risk projects, such as the Office of Government Commerce Gateway reviews and the establishment of the Major Project Review Group.

However, it added that the lack of an integrated assurance system was limiting the ability of Whitehall to make further improvements.

According to the NAO, the new system should:

• Have a clear mandate
• Be non-optional
• Be outcome focused
• Be built on a higher and more exacting evidence base
• Trigger further interventions where necessary
• Provide the ability to plan and resource assurance activity
• Systematically propagate the lessons learned, and
• Minimise the burden placed on projects.

The NAO highlighted the risk that major government projects pose. It said: “Such projects frequently present a level of risk that no commercial organisation would consider taking on. Projects can fail to deliver to time, cost and quality.

“Assurance provides information to those involved in projects, helping decision makers to be better informed and reduce the risk of project failure.”

The watchdog estimated that the total cost of assurance would be £8.3m, a “minimal” outlay compared to the £10.5bn of expenditure on the 42 projects covered by the Major Projects Portfolio.

“If assurance helps prevent just one of government’s high risk projects from a serious cost overrun, the size of the potential saving more than justifies the investment,” it pointed out.

Amyas Morse, head of the NAO, said: “This system will help to reduce the financial risk to the taxpayer and increase the likelihood of successful project delivery.

“The new system should make greater use of hard evidence in judging whether the elements fundamental to successful project delivery are in place and operating effectively.”