The National Audit Office, the independent scrutiniser of public spending in the UK, has recently published a report which considers a number of issues faced by the Department for Transport in developing rail infrastructure. As school reports go, it is not too bad, but there are lessons to be learned.
Lesson 1 – more research
Politicians and a sceptical public will need to be persuaded of the benefits of a scheme. In making the case all the benefits (which can be multiple and varied) need to be captured as if the case is not made the scheme might not be implemented. Both nationally and internationally there is a lack of definitive research on the wider economic benefits of transport schemes so it can be difficult to make the case for a scheme, other than in general (or inaccurate) terms. This is an area where more work needs to be done.
Lesson 2 – upskilling
The Department has limited programme management skills for the scale of its investment programme. It has sought to manage this issue but needs to develop its internal capability to address this shortage. The delivery vehicles also need the right skills. Securing the required skills in the future may become more difficult given the number of schemes which are planned.
Lesson 3 – separation of roles
Separation of the sponsor role from programme delivery allows the Department to oversee and challenge progress while the delivery body concentrates on delivering the programme. This does not mean that control over the scheme will be lost as a gateway review process could be adopted to give the Department control at key decision points.
Lesson 4 – governance
Different schemes adopt different governance structures and some work better than others. The Department should not be bashful about changing governance arrangements where the existing arrangements are not working.
Lesson 5 – sensible revision
The Department is often subject to pressure to start construction as quickly as possible and build momentum on a programme. This has led to the Department approving budgets where plans are immature. If initial programmes are over optimistic or incomplete it is sensible to revise the scope and programme to keep costs within budget.
Lesson 6 – better explanation
There are instances where the Department’s economic analysis had to be revised due to errors emerging or key assumptions being unrealistic. This can prejudice public confidence in a scheme. Assessing cost benefit ratios will always be uncertain but misunderstandings could be avoided by presenting cost benefit ratios as a range of figures rather than single figures, explaining the rationale for changes in the analysis during the life of the project and making clear the greatest areas of uncertainty.
Lesson 7 – less dogma
Funding choices have been based on what a government can afford and its attitude to private finance. In developing the funding structure the Department should consider the benefits which a scheme will generate, with a view to structuring the scheme to optimise the capturing of those benefits.
Lesson 8 – who will realise the benefits
Having established what the benefits could be, it is important to realise those benefits. Some benefits are more likely to be realised if they are not taken forward by the Department. Regeneration and development are not part of a transport department’s core responsibility, so delivery of such benefits should be handed over to a dedicated development corporation.
Lesson 9 – evaluation
Finally, once a scheme is complete it should be evaluated so that the actual benefits are understood. This would help in justifying future schemes and also in negotiating a realistic contribution from those who will benefit from the scheme.