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A strong and effective centre of government is vital for the effective operation of government as a whole and for ensuring a focus on improved value for money for the taxpayer. However, there is a lack of clarity about the centre's precise role, particularly the respective responsibilities of the Cabinet Office, HM Treasury and the Prime Minister's Office (Number 10), and how they work together as a coherent centre. The centre sometimes intervenes to address issues with high-priority government programmes, but has too often failed to do so effectively or at an early enough stage. In part, this is because the centre does not have a joined-up single view of strategic risks across government, meaning it is often reactive in its response rather than able to anticipate potentially serious problems. There are gaps in key skills at the centre and across departments, such as financial management capability and contracting expertise, which are compounded because government repeatedly fails to learn lessons and share good practice from past experience. The Government announced that the roles of Cabinet Secretary and Head of the Civil Service will be combined, and there will be a new Chief Executive post at the centre of government. Implementing these changes may provide an opportunity to make progress on the role of the centre
The Committee took evidence from the Department for Transport, and the Strategic Rail Authority on the establishment of Network Rail in place of Railtrack and the subsequent review of the rail industry. The report considers the issues raised in the NAO report (HC 532, Session 2003-04) and how they have been addressed by the subsequent White Paper. There are five main conclusions: the Department will need to set strategy more effectively than was done by the SRA; the Department needs to recruit staff capable of dealing with the highest levels of the railway industry; Network Rail should develop long term financial indicators to show it is meeting objectives in a cost effective way; the Department should establish effective oversight of the risks associated with Network Rail's financial liabilities; the Government should justify the extra cost of private finance rather than conventional public funding for Network Rail.
Following on from the NAO report (HCP 595-I, session 2005-06; ISBN 0102936250) published in November 2005, the Committee's report examines the recommendations made to improve the MoD's procurement of defence equipment focusing on time, cost and performance data for 30 defence projects in the year ended March 2005. This covers the 20 largest projects where the main investment decision has been taken and the 10 largest projects still in the assessment stage. The Committee's report focuses on three main issues: options for enhancing programme and project management of defence acquisition; the impact of older projects on overall acquisition performance; and value for money from the Defence Industrial Strategy. Findings include: i) the MoD has reduced the forecast costs of its top 19 projects by some £700 million, but these cuts were needed to bring the Defence Equipment Plan under control rather than the result of better project management; ii) some of the latest capability cuts are short-term expediencies which may result in an erosion of core defence capability or in higher costs throughout the life of individual projects; and iii) despite previous assurances that it had restructured many of its older projects to address past failures, the MoD still attributes much of its historic poor performance to so called "toxic legacy" projects which continue to accumulate considerable time and cost overruns, and it is now time that such projects were put on a firm footing with realistic performance, time and cost estimates against which the MoD and industry can be judged.
The Department for Transport has approved expenditure of over £11 billion between 1998 and 2021 for the development of new and existing trunk roads and motorways by the Highways Agency, and just under £1.7 billion on major road schemes proposed and developed by local authorities in five year Local Transport Plans. Following on from a NAO report on this topic (HCP 321, session 2006-07; ISBN 9780102944600) published in March 2007, the Committee's report examines the steps taken by the Department for Transport and the Highways Agency to improve value for money and oversight of the roads programme and contracting methods and project management capability. By September 2006, the Agency's 36 completed schemes in the Targeted Programme of Improvement cost 40 per cent more than estimated initially, and for schemes still to be completed, latest forecasts indicate that final costs could be 27 per cent more than original estimates. The main causes for costs exceeding estimates are increases in construction costs, higher than forecast land prices and compensation to landowners, inflation and changes in the scope of the project. The report finds that the DfT has not been rigorous enough in its oversight of the Agency's delivery of major road schemes, allowing it too much latitude on delivery and cost plans, and has failed to monitor in-year expenditure against progress and delivery milestones. The Agency is overly reliant on consultants for project management expertise and needs to develop its in-house capability.