Failed project costs taxpayers £50million

Headline news in the British press today (see here and here and here and) shows the risks in getting a project very badly wrong.

A project designed to get best value for the tax payers (the franchise to run the West Coast rail service) has finished up costing an estimated £50million and the contract still needs to be tendered out!

The 9 page executive summary of the report by the National Audit Office is enough to set the blood boiling of any Minister or senior Civil Servant or interested member of the public. It lists:

  • The Department’s objectives were insufficiently clear during the franchise competition
  • The competition lacked strong project and programme management which included the following issues:
    • There was more than one senior responsible owner in the course of the competition, nor was there a single programme manager from the outset who brought together and coordinated the policy and delivery streams (paragraph 2.3).
    • The Department delaying the issue of the invitation to tender to allow more time for policy development used up all of its contingency within the timetable (paragraph 3.3).
    • The Department’s documentation was poor and it did not submit papers to internal decision-makers in sufficient time for them to consider the information within them (paragraph 4.34).
    • Staff worked hard to meet the deadline for awarding the contract. More widely within the refranchising programme concerns were raised about resources by the Major Projects Authority. However, nobody sought to address these issues in relation to this franchise competition (paragraph 2.9).
  • There was also high staff turnover, poor management oversight, confused governance, a lack of engagement with the key bidders and poor senior management oversight. Is it any wonder this project went wrong?

The figures are staggering as the picture below shows:

 

 

 

 

 

 

 

 

 

 

 

One figure stands out: £8.9 million the total estimated cost to date of staff and advisers to run the competition prepare for the judicial review and conduct reviews since the cancellation.

The full National Audit Report is called Lessons from cancelling the Inter City West Coast franchise competition. I wonder whether lessons will be learned and whether procurement experts up and down the country will read this report.

 

Will lessons be learned?

 

 

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3 Responses to Failed project costs taxpayers £50million

  1. Pingback: Failed project costs taxpayers £50million | #PMChat

  2. Paul Slater says:

    Well done for bringing this together. In terms of what is said there is nothing new whatsoever about what has happened here that hasn’t happened before in large public sector projects whether they include significant aspects of procurement or not. Incidentally, procurement is seen within most parts of the public sector as something that happens to get a project delivered (hand it off to someone else!) and as such is almost considered an administrative activity, in much the same way as project management is viewed. Policy development and interaction with Ministers is what is seen as ‘sexy’ yet the policies are never considered and managed as projects in their own right!

    So, to answer your question as to whether lessons will be learnt. No, they won’t. Heads probably won’t roll and maybe some people who thought they were destined for the top won’t get there as soon as they thought they would but chances are everything else will continue as it has done before across government.

    • Ron Rosenhead says:

      Paul, thanks for your comments.

      I unfortunately think you are right that lessons will not be learnt. As Sir Peter Gershon said: “failure for novel reasons is still a novelty”

      Again, unfortunately you are correct; In terms of what is said there is nothing new whatsoever about what has happened here that hasn’t happened before in large public sector projects whether they include significant aspects of procurement or not. Incidentally, procurement is seen within most parts of the public sector as something that happens to get a project delivered (hand it off to someone else!) and as such is almost considered an administrative activity, in much the same way as project management is viewed.

      I have worked in in procurement where the skill level is very low and the project management skills even lower – seen as an add on to the day job.

      Thank you Paul for your contribution to this. Much appreciated

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