Departments not achieving ‘value for money’ in delivering major capital projects
Delays in the delivery of the majority of Northern Ireland’s major capital projects have led to projected cost increases worth billions of pounds, with only a fraction of almost 80 projects expected to be delivered on time and within cost.
Northern Ireland’s Comptroller and Auditor General has estimated that almost £2.5 billion of costs have been added to the original business case costs for major capital projects between April 2019 and April 2023.
The Northern Ireland Audit Office (NIAO) estimates that of a total of 77 projects listed by the Northern Ireland Executive’s departments, only nine are expected to meet their original time and cost estimates.
Among the projects are seven flagships, identified by the Executive as of highest priority, only one of which, the Belfast Rapid Transit project, has been delivered.
Those projects yet to be delivered include hospitals, critical care centres, major roads, Casement Park, and schools.
The report by Comptroller and Auditor General, Dorinnia Carville, follows up on a piece of work carried out in December 2019 by the Northern Ireland Audit Office (NIAO), which analysed the delivery of 11 major capital projects, including the Executive’s seven flagships.
Findings of significant delay and cost overruns where subsequently presented to the Northern Ireland Assembly’s Public Accounts Committee (PAC), which issued 15 recommendations to reform how capital projects were being delivered in Northern Ireland.
Despite the recommendations, the NIAO estimates that cost overruns identified, in the original 11 projects assessment, of some £700 million, have now risen to almost £2 billion.
In its latest report, the NIAO says that of the 77 projects included in major capital projects portfolio across Northern Ireland, originally estimated to cost £5.53 billion to complete, only nine are expected to meet their original timeframe and budget, and full delivery will now cost over £8 billion.
Noting “no notable transformation of commissioning and delivery arrangements in Northern Ireland”, as had been recommended in 2019, Comptroller and Auditor General, Carville says: “It remains extremely concerning that, more than four years after my office’s last report on this issue, there is little evidence of improvement or past lessons learned being applied to new projects.”
Adding that even amongst the flagship projects – those identified as of highest priority – progress has been “limited”.
“It is clear that departments are not achieving value for money in the delivery of these major capital projects,” she states.
The NIAO acknowledges the role of external factors, such as the pandemic and inflation, in delays or rising costs, but emphasises that failure to make fundamental reforms to the way capital projects are commissioned and delivered is a “significant contributing factor” in the substantial cost and time overruns identified.
The NIAO has called for an overhaul of the system for commissioning major capital projects, recommending a comprehensive transformation project be established.
It points to work currently being undertaken by the Strategic Investment Board (SIB) to identify the root causes of delay and cost overruns identified in the 2019 report, as having the potential to improve the efficiency and effectiveness of the system for the planning and delivery of major capital projects.
“As major capital projects run over the course of several years, it will take time to fully assess the impact of the actions that have been taken so far to improve delivery in Northern Ireland. However, given the lack of substantive progress since our last report, we are of the view that immediate action is needed to prevent further cost overruns and delays,” Carville concludes.
