By Nicholas Timmins, Public Policy Editor
Public projects worth £200bn, including the Olympic Games, Crossrail, defence infrastructure and ID cards, are at risk because the government lacks the commercial skills to deliver them, the public spending watchdog warned on Thursday.
The National Audit Office said there was “an even greater risk” to many other complex government projects where the shortage of skills among the people working on them had not even been systematically assessed.
Each of the 43 schemes on the Treasury’s “major projects list” had a civil servant who was its senior responsible owner. But 44 percent of them lacked any substantial commercial experience, the NAO said.
The biggest skills gaps are in contract management, commissioning and managing advisers, risk identification and management, and plain old business acumen. And while the government tries to plug the gaps using temporary staff, consultants and specialist advisers, this is costly and can lead to a loss of knowledge when temporary staff move on.
The government has been attempting to boost its commercial skills since 1997, with repeated reports drawing attention to the shortfall. While all major departments now have a commercial director, however, the 13 that provided information showed that over a third of their spend was on temporary staff.
The government was not even making the best use of the skills it had got, the NAO said. Departments lacked information on the expertise that was available and there was no formal mechanism for allocating expertise across government departments.
The civil service culture of moving staff frequently within departments often means projects and individuals lose vital commercial experience. An important initiative has been to set up the Office of Government Commerce a decade ago to provide skills and guidance on best practice. But 14 of the 16 departmental commercial directors believe it has done little to address the skill gaps within their own departments, and the NAO judges that the OGC is having “limited impact”. That raises questions about how far its £1.5m-a-year budget is delivering value for money.
Amyas Morse, head of the NAO, said “a great deal of money” rested on whether the government had the skills needed for complex projects at a time when it was increasingly reliant on the private sector to deliver public services.
Recommendations include paying more for the right skills, in spite of public spending constraints; improving the use of skilled individuals across government; and getting the OGC to understand why departments are reluctant to take part in its initiatives. The NAO said the recent review of departments’ procurement capabilities had been useful, but the OGC lacked a performance management system to measure the success of its individual initiatives.
