2.2.1. The United Kingdom
а) strategic goals and priorities definition, role of project principle in strategic planning
The Federal government creates national strategic planning documents, such as “The Plan for Growth”, “A Strong Britain in an Age of Uncertainty: The National Security Strategy”, “UK’s National Strategy for Climate and Energy: Transition to a Low carbon society”.
At the most general level, policy objectives are defined by the UK’s government on the governmental main webpage as a single departmental plan for the period 2015-2020. It was published on February 19, 2016 and includes the following objectives:
Prevent terrorism
Cut crime
Control immigration
Promote growth
Delivering efficiently: transforming the Home Office
On each objective (strategic direction) there are given concrete measures and lead ministries and lead officials, made progress and described how the Home Office is working in order to achieve objectives.
What is important here to note is the direct link between the Home Office, Cabinet Office, HM Treasury and other government departments and Infrastructure and project authority (IPA). It is stated that in order to achieve objective 4 ‘Promote growth’ the Home Office, Cabinet Office, HM Treasury and other government departments work together to deliver transformational change in key areas, including:
‘working in partnership with the Cabinet Office to deliver Arms Length Bodies’ transformation plans, and the Infrastructure and Projects Authority on major projects and programmes and prioritization’.42
Infrastructure and project authority (IPA) plays the key role in these interactions. It is a government’s centre of expertise for infrastructure and major projects43. They sit at the heart of government, reporting to the Cabinet Office and HM Treasury. Their core teams include experts in infrastructure, project delivery and project finance who work with government departments and industry.
They support the successful delivery of all types of infrastructure and major projects; ranging from railways, schools, hospitals and housing, to defence, IT and major transformation programmes. They lead the project delivery and project finance professions across government.
The IPA is a part of a wider institutional framework for infrastructure planning and delivery. The National Infrastructure Commission (NIC) is responsible for articulating a long-term vision for infrastructure and the government will determine which projects are delivered. The NIC will hold the government to account for taking forward the plans that result from its work. The IPA then enables this long term planning to be translated into successful project delivery. Together, this establishes the right framework for infrastructure. Five core teams include experts in infrastructure, project delivery and project finance who work with government departments and industry. We support individual infrastructure and major projects, and strive to continuously improve the project delivery system.
‘Responsibilities
IPA is responsible for:
the overall project delivery system, which includes the projects, people and processes
supporting and de-risking the most complex and high risk projects
developing the skills and capability of the people who deliver projects
overseeing the project life-cycle from policy and financing through to independent assurance
Priorities
IPA brings together expertise from across the IPA to prioritise the following four activities:
setting up projects for success by influencing the policy environment, deploying our expertise as early as possible and helping projects access resources
creating market confidence by providing foresight and transparency on the future pipeline of projects and establishing the right financial policies and products to support private investment
building delivery capability by providing world class leadership programmes, career pathways and leading the project delivery and project finance professions
measuring and improving performance of infrastructure and major projects over time, in order to help them deliver benefits for society and provide value for money’44
IPA coordinates its input into government policy development and measure project performance across government. It publishes strategically important documents such as the National Infrastructure and Construction Pipeline (NICP), Government Construction Strategy and the government’s Annual Report on Major Projects.
Products and services of the IPA are the following:
‘Major Projects Review Group (MPRG) – Sponsored by HM Treasury, we coordinate the MPRG which challenges projects on deliverability, affordability and value for money at key points in the HM Treasury approvals process and as required at other key decision points during a project’s lifecycle.
Project Initiation Routemap - A framework to use at the early stages of a project’s development, to help improve future delivery.
Government Construction Strategy – A plan to increase government construction productivity and achieve £1.7 billion efficiencies and 20,000 apprenticeships from 2015-2020.
Infrastructure Performance Review - A review to identify ways government, working with industry, can improve the quality, cost and performance of UK infrastructure, building on the Infrastructure Cost Review 2010 – 2014, which supported a 15% reduction in the capital cost of infrastructure projects.
NIDP - A plan that brings together all of the government’s infrastructure delivery priorities over the next five years.
NICP - A forward-looking pipeline of planned projects and programmes in economic and social infrastructure and housing.
Annual Report on Major Projects - A report on the progress made on projects included in the GMPP.
Project X - A collaboration of project practitioners, academia and professional bodies to generate unique insights into the performance of infrastructure and major projects’.45
Current project based administrative structure with IPA as its central element was shaped as a result of a long and instructive learning process.
The UK’s project delivery history can be traced back since 1990. Timeline of development to improve government project delivery is demonstrated on the Figure 1.46. It has started with the problem of procurement (1984), and then gradually moved to the idea of project management, which was a part of purchasing system. At some stage "big projects" entered the scene linking procurement system to with strategic goal setting and planning.
In July 1999 the Government announced their intention to establish the Office of Government Commerce (OGC) which will subsume the activities of the Treasury Procurement Group, the Private Finance Initiative Policy Group, the Buying Agency, Property Advisers to the Civil Estate and the Central Computer and Telecommunications Agency.47
Establishment of OGC was a crucial moment in project management history in the UK since it was the structure that has evolved into current IPA.48
Initial role & responsibilities of the proposed office of government commerce
• Formulation of integrated procurement policy and strategy
• Represent UK on procurement matters in EU, WTO and other relevant international bodies
• Ownership of the generic procurement process
• Development of a common process for management of the supplier base
• Strategic management of key suppliers, especially those involved in providing goods and services which are critical to the successful operation of Government
• Measurement and benchmarking of procurement performance across Government
• Specifying e-commerce standards and sponsoring the development of products which facilitate their implementation across Government
• Undertaking procurement on behalf of Government where aggregation of
requirements enables significant value for money improvements to be obtained
• Provision of a centre of excellence for strategic procurement skills e.g. PFI, outsourcing and the management of very large complex projects in areas such as IT and construction
• Planning for, and development of, new procurement skills
• Undertaking periodic procurement reviews of procurement performance, skills and capabilities with Departments
• Catalysing the spread of best in class procurement practice
• Functional leadership of the Government Procurement Service
• Working pro-actively with Departments to implement the recommendations of this Review
Some later in 2011 the Major Projects Authority (MPA) replaced the Office of Government Commerce (OGC). As stated in HM Treasury report, ‘The 2010 Spending Review set out plans for around £80 billion of savings in public expenditure. To achieve these, the Government will need to effect a step-change in spending control. On the one hand, this means strengthening arrangements for scrutiny and control of spending, both within departments and by the Treasury. On the other hand, it means focusing this enhanced scrutiny where it is most valuable. In line with these objectives, the Treasury has strengthened its project approval processes.
Alongside this, the Coalition’s Programme for Government makes a clear commitment to achieving better value for money for public spending. This includes a strong will to improve the success and delivery of Major Projects. In line with this aim, the Prime Minister has written to Cabinet announcing the establishment of the Major Projects Authority (MPA) within the Cabinet Office’s Efficiency and Reform Group (ERG). The aim of the MPA is to bring about the successful delivery of Major Projects across central Government by working with departments to ensure the fitness and quality of Major Projects throughout their life. This will be achieved by introducing revised procedures for the assurance and support of Major Projects, and ensuring they are integrated with strengthened Treasury approval processes. This guidance outlines these revised procedures and sets out how they will work together within an integrated assurance and approval framework’.49
Finally, on the 1st of January 2016 Infrastructure and Projects Authority (IPA) was formed from a merger of Infrastructure UK and the Major Projects Authority which integrated governance of all governmental projects under the body accountable to both Treasury and Government.50
IPA pays much attention to the initial stage in project or programme51development. The initial proposal is researched and developed before formal initiation of the project or programme. To help projects set up for success, the Infrastructure and Projects Authority (IPA) can provide direct support to departments through the use of project initiation tools such as ‘Routemap’ assessment and Critical Friend reviews. Project Validation Review (PVR) formerly known as ‘Starting Gate’, - commissioned by the IPA, takes place at an early stage and prior to entry onto the Government’s Major Project Portfolio (GMPP). PVR offers departments the opportunity to gain independent assurance on how well practical delivery issues are being addressed in preparing for implementation.
Given its applicability at the early stages, PVR reviews do not have rating of recommendations, and there is no automatic requirement for a delivery confidence assessment (although this may be requested by the departmental client).
Key characteristics of PVR are:
fast - no more than 4 days
light-touch and non-attributable - interview-based
flexibility over scope - to reflect the stage of policy development
flexibility over timing; a review can be set up very quickly by OGC - the main constraint is department's time to arrange interviews
tailored - "areas of enquiry" focus on the issues most pertinent at the earlier stages
value-added – PRV’s specialist pool of senior PRV reviewers have skills and experience relevant to the policy delivery environment.
PRV works with Departments to identify major new initiatives which could benefit from a PVR review, and will resource the reviewers (the cost is not currently recovered from departments).
‘It helps departments identify delivery issues and risks much earlier in the policy development process before transition to a project or programme, and so help prevent the common causes of project failure.
After the Project Validation Review 3 more preparatory stages take place before project initiation. They are:
Strategic Outline Case (SOC) – The purpose of the SOC is to confirm the strategic context of the proposal and make the case for change.
Outline Business Case (OBC) – Detailed appraisal of the short list of options to identify a preferred option based on cost benefit or cost effectiveness analysis. This includes risk analysis, costing and initial design of procurement, or if required, sale.
Full Business Case (FBC) – Revisit the Business Case to incorporate the effects of the preferred bid to test validity of the chosen option and to rework and adjust options if or as required’.52
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At the local level, the British strategic planning system is extremely decentralized. ‘In refreshing the national enforcement priorities, Local Better Regulation Office (LBRO) has worked with an expert user group of local authorities and professional and representative bodies, and a policy group comprising of central government departments and national regulators, to develop a new approach that better reflects both local delivery of regulation and the Government to decentralise power. This signals a move away from national enforcement priorities towards priority regulatory outcomes. Priority regulatory outcomes establish the outcomes that Government, both local and central, wishes to see – mutually supporting prosperity and protection. They set a framework for local delivery that will support national economic growth and ensure the protection of citizens across the country. The priorities provide a focus for local regulatory activity and collaborative working with partner organizations, delivering national outcomes through local action. By setting outcome-focused priorities, local authorities are empowered to use local discretion and autonomy to select the most appropriate ways to meet the priority regulatory outcomes in their locality. This recognizes that delivery options are subject to restrictions on public sector finance, which have impacted significantly on regulatory services.’53
The part of the document is demonstrated in the Picture 2.
Picture 2. The main federal priorities of the UK
b) priority projects initiation, projects analysis and selection, portfolio formation
Projects are initiated by ministries.
‘The Portfolio is created using a definition of a major project as a central government project that requires HM Treasury approval during its life, as set out in a letter of delegation from HM Treasury to each department. There are areas where HM Treasury authority cannot be delegated, so the Authority assumes that projects with other characteristics should be included, such as those which could create pressures leading to breaches in financial expenditure limits; make contractual commitments to significant levels of future spend; could set an expensive precedent; are novel and contentious or potentially repercussive; or require primary legislation. This does not necessarily capture all programmes of strategic importance. So, the Government’s Major Projects Portfolio (the Portfolio), is made up of the projects that require HM Treasury approval, reflecting their size, risk and impact.
Individual government departments and arm’s-length bodies are responsible for delivering specific projects. The extent to which their work is delivered through projects varies by department’.
The factors that require departments to start more major programmes – scarce resources, the need for more investment in infrastructure and the opportunities to take advantage of new technologies – increase the demands on their limited capacity. This means the environment for delivering major public programmes is increasingly challenging and will require departments to:
• prioritise effectively;
• make good investment decisions, ensuring that the projects and programmes given priority offer the best value for money;
• secure the skills to deliver programmes in different ways, including agile development techniques and the capability to lead business and service transformation programmes; and
• respond flexibly to developments and change direction when new approaches do not deliver results.
c) projects implementation, analysis and estimation of projects and strategy implementation
In the UK there is a system of key performance indicators that contains 130 parameters in institutional, social, economic and ecological spheres and considers systematic data analysis and collection.
The UK spends an estimated £60 million on internal audits for central government. Internal Audit provides an independent and objective assurance to the most senior management of about 450 public entities that their systems and controls are fit for purpose. That assurance should cover financial and operational controls for core systems, governance, and risk management processes. At the heart of this governance work is assurance of management control of the quality of the information, which the accounting officer, the board, and the entire business use to make decisions and monitor performance. HM Treasury, which requires that all central government bodies have an internal audit function, is responsible for setting standards and policies for internal audits.
Each year National Audit Office (NAO) produces a report about programs (projects) realization, defines key problems and achievement, and makes suggestions about how to make it better. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Their studies evaluate the value for money of public spending, nationally and locally. Its recommendations and reports on good practice help government improve public services, and its work led to audited savings of £1.15 billion in 2014.
Approval required for each tranche and modification of the programme as needed. These stages are repeated until the programme is complete.
Ministries are also responsible for monitoring whether projects fulfill their intended benefits once they are completed.
d) administrative support of strategic planning
‘The National Planning Policy Framework’ sets out the Government’s planning policies for England and how these are expected to be applied. It sets out the Government’s requirements for the planning system only to the extent that it is relevant, proportionate and necessary to do so. It provides a framework within which local people and their accountable councils can produce their own distinctive local and neighbourhood plans, which reflect the needs and priorities of their communities’.
The importance of policy scope is emphasized in the preface of the document, which says, that effective public policy should be set out available and simple, without the encumbrance of unnecessary data arrays. As a result of this "simplification" local authorities are able to engage independently in planning the development of their territorial and not to involve experts from outside, which are often not able to so effectively assess the situation in a region, as local authorities. Thereby, the National Planning Policy Framework is a recommendation to the local planning authorities.
One of the key principles of the UKs strategic planning system is delegation of great deal of power to regional and local authorities. System is decentralized.
In the UK there are 9 regional agencies, which coordinate development of regions, for those they are responsible, and distribute budget money on the competitive basis.
As a consolidated expenditures overview in the UK every 2-3 years expenditure reports are published, which cover priority goals of the government and indicators analysis.
There is in the UK the guide, which is called the Green Book. It is a best practice guide for all central departments and executive agencies, and covers projects of all types and size. It aims to make the appraisal process throughout government more consistent and transparent.54That is why interdepartmental work is harmonized, coherent and consistent.