Major Capital Projects follow up report published

06/03/24

The Northern Ireland Audit Office recently undertook a review of major capital projects in Northern Ireland, following on from a previous report in 2019, which then identified a number of issues of concerns and recommendations for improvement. These recommendations were revisited in this updated report, and the outcomes are concerning. This is a summary of the key points with a link to the main report below.

Link to full report: Major Capital Projects – Follow-up Report | Northern Ireland Audit Office (niauditoffice.gov.uk)

Key Facts:

• £10.6 billion of public sector capital expenditure 2019-2024.
• Three departments account for almost seven out of every £10 of public sector capital expenditure (2019-2024) – Infrastructure £3.7 billion; Health £1.8 billion; and Communities £1.6 billion.
• Delays and cost overruns have continued in the Executive’s seven flagship projects and the four high profile projects featured in our 2019 report. The combined estimated cost overrun is now £1.94 billion.
• Only one of the Executive’s flagship projects announced in 2015 has been fully completed.

In the period April 2019 to August 2023:

• Departments major capital projects portfolio consisted of 77 projects.
• It was originally estimated to cost £5.63 billion to complete and is now expected to cost £8.08 billion, a 44 per cent increase on the original business case cost estimates.
• Only 9 of the 77 projects are expected to meet both their original time and cost estimates.
• 41 of the 45 projects with estimated/actual cost overruns either did not or are not expected to meet their target completion dates.

While accepting the complexity of the majority capital projects, and the negative effective of a lack of multi-year budgeting, the NIAO reached the conclusion that departments are not achieving value for money in the delivery of major capital projects. Issues identified previously have largely persisted, and delays and cost overruns continue to occur frequently throughout the major capital projects portfolio. The following recommendation was made ‘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’.

Over the past ten years a series of reviews by the SIB, CBI and OECD have highlighted significant weaknesses in the commissioning and delivery system for major capital projects in Northern Ireland, and the need for substantial reform. These, as well as the NIAO reports, have so far failed to stimulate significant improvement, and key stakeholders have expressed frustration and disappointment with the perceived reluctance to embrace change.

Key Projects and Current Status:

Other projects such as the new Ulster University campus, the Strule Shared Education Campus, Critical Care Centre at the Royal Victoria Hospital and the Lisburn and Newry

Primary Community Care Centres have also been analysed and demonstrate the same type of concerns.

Recommendations for change include:

• Eliminating unnecessary duplication in administrative functions and institutional frameworks.
• Improving project prioritisation.
• Reducing bureaucracy by focusing more on “within budget” and “on time” delivery, rather than on process.
• Driving better deals by increasing innovation.
• Establishment of a comprehensive transformation project including the development of a clear framework to ensure accountability and delivery of major capital projects.
• Revisiting the recommendations from the previous.
• Full consideration of alternative delivery models, resourced with appropriately skilled staff, while the roles and responsibilities of all bodies involved in the commissioning and delivery must be reviewed, clarified and streamlined.
• Progress work on the creation of independent infrastructure commission for NI.