‘There is a strong suspicion that optimism is designed to get project approval’

Written by Richard Johnstone on 15 November 2019 in News
News

NAO head claims many government programmes are dogged by unrealistic costings and creeping scope

Credit: Rawpixel/CC BY 2.0

The head of the National Audit Office Gareth Davies has claimed that government projects are often initially presented with unrealistic cost projections in a bid to get approval.

In an exclusive interview with the Civil Service World Podcast, Davies who took up his post in June, set out his plans for the organisation, which audits government departments and agencies. This has included launching a strategic review of the NAO that will be informed by its work around Brexit.

In a wide-ranging discussion, the NAO head shed light on lessons taken from his career on how to run good projects. These include ensuring realistic costings and attempting to limit the scope of a project creeping outwards.

“There's so many examples of over optimistic costs, with the strong suspicion that some of that optimism is designed to get approval for the project,” he said. “Then reality is only confronted much later, when it's a whole different bunch of people who are responsible and accountable.”


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Davies added: “I think government does have to work even harder on improving the credibility of initial cost estimates at the approval stage and getting more assurance than it currently does that it is not an unrealistically optimistic assumption that's going to be shown to be so in a few years time.”

Increases in the scope “bedevils every major project” and it takes strong management from departments “to make sure that for whatever reason, whether it's coming from ministers, whether it's coming from contractors, whether it's coming from the customers of the service that you're that you're designing, that you stay in control of the scope”.

“It's so easy for extra bits of design to creep in as the project gets underway for the case to be made it every time that this would be an essential improvement in what you'd originally designed. Those can add up to explain a lot of the overspending that we've seen in the years.”

Davies worked as UK head of public services for international audit firm Mazars from 2012 until joining the NAO, and before Mazars he was managing director of the audit practice at the Audit Commission, and spent a total of 25 years at the watchdog.

 

Listen to the full interview – and subscribe for future episodes of the Civil Service World podcast – on Apple Podcasts, Soundcloud, and Spotify.

 

 

About the author

Richard Johnstone is deputy and online editor of PublicTechnology sister publication Civil Service World. He tweets as @CSW_DepEd.

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