'Unmanageable' government wastes £19 billion
Not adding up: government projects arrive late and cost more than originally budgeted
Friday, 20, Nov 2009 12:01
By Lauren Knott
Government projects which overran cost the British public £19 billion this year, according to a report launched by the Taxpayers' Alliance (TPA) today.
The report shows no improvement in the management of state-funded capital projects, such as new hospitals or IT systems, since the organisation's last survey of expenditure back in 2007.
Overrunning meant spending on projects was up by an average of 38 per cent more than budgeted or the equivalent of £750 per household – an increase of four per cent since 2007.
A third of the projects surveyed were delivered late.
John O'Connell of the TPA said: "Too many projects are coming in late and over budget and this failure is costing the taxpayer billions, endangering essential services.
"This can mean doctors having to work in outdated hospitals or soldiers on the front line having to use inadequate equipment, despite the taxpayer having paid handsomely for new facilities or kit."
The findings will be bad news for government departments which are looking to cut spending as state borrowing reached a record high.
"The state of the public finances means that it's more important than ever to ensure value for money is achieved on capital projects," Mr O'Connell added.
Worst offenders were the NHS with its National Programme for IT, which is currently £10.4 billion over budget – or 450 per cent.
The Ministry of Justice (MoJ) comes in second highest in the inefficiency list with two projects overrunning by an average of 163 per cent.
Two hundred and forty key government projects were surveyed in total.
The parliamentary public accounts committee recently criticised the government's "comprehensively poor project management" when it reviewed a project to manage prisoners.
The ill-fated C-NOMIS project, initially envisaged by the Home Office for delivery in January 2008 for £234 million, was stopped in August 2007 because costs had trebled.
The project was left unmonitored for three years as staff in charge were not trained in project management. Senior Home Office staff were not informed about the spiraling costs.
The offender database it was due to deliver has had to be scaled back and is now due for delivery in 2011. Over £160 million of public money is still unaccounted for.
The C-NOMIS project, which was managed by the Home Office and the MoJ, was today defended by a spokesman:
"We are committed to implementing systems that maximise efficiency in the criminal justice system for the benefit of victims and witnesses," he said.
"Steps have been taken to ensure lessons learnt from these projects are implemented.
"We are committed to continuing the successful implementation of Prison-NOMIS project, which will support our commitment to ensuring that Prison and Probation Service staff have improved access to the information they need to manage offenders in custody and in the community."
The TPA said that government had become so large it is unmanageable.
The campaign body will call for spending reviews to include the use of more realistic estimates which reflect the actual costs of capital spending projects.