The UK is currently ill-equipped to handle the upcoming surge in major infrastructure projects, according to a new report by the Public Accounts Committee (PAC).
With the country facing a severe shortage in essential skills, particularly in technical and engineering sectors, exacerbated by international competition for these skills, PAC has called on the UK Government to outline strategies to address these deficiencies and ensure that future projects are cost-effective and beneficial for taxpayers.
The PAC report highlights concerns in project management and design, especially the lack of accredited professionals in senior roles; out of 16,000 project professionals required to be accredited by the Government’s major project leadership academy, only 1,000 have achieved this status so far.
As of March 2023, the Government Major Projects Portfolio listed 244 projects, with a combined life-cycle cost projected at £805 billion. The PAC’s inquiry noted that the expected expenditure for these projects over the next five years is exceptionally high, aiming to enhance infrastructure across road, rail, and energy sectors.
Despite substantial investments, the PAC criticises government departments for not investing adequate effort to maximise project value. In 2019, only 8% of the £432 billion spent on major projects had comprehensive impact evaluation plans. Approximately two-thirds of the projects lacked any evaluation plans, which are crucial for validating project effectiveness and value.
The report acknowledges instances of effective inter-departmental collaboration but stresses the need for this practice to be more widespread to handle complex major projects efficiently.
The UK’s electrical sector will face the brunt of many of the challenges, especially when it comes to meeting the future demands of electric vehicles (EVs) and renewable energy.
National Grid ESO has outlined a £58 billion investment plan to modernise the electricity grid, aiming to accommodate the growing demand from EVs and renewable energy sources. This plan includes developing new offshore wind projects and enhancing grid flexibility to manage the variable output from renewable sources, but in order to deliver the needed infrastructure it will need to overcome the skills shortage – or risk costs spiralling out of control.
Dame Meg Hillier MP, Chair of the Committee, expressed concern over the Government’s preparedness for the projected rise in infrastructure spending. “Over the coming years, Government spending on major infrastructure projects is set to rise to unprecedented levels. Such projects present unique and novel challenges which Government must navigate if it is to secure value for public money. Without a robust market for essential skills in place, these are challenges the UK will fail to meet, as shortages push costs up in a globally competitive environment,” she said.
Dame Meg also pointed out frequent mismanagement and budget overruns in projects, attributing these issues to a lack of solid impact evaluation plans. “All too often we see projects and programmes that are poorly managed and delivered late and over budget. The failure to ensure projects have robust impact evaluation plans in place is symptomatic of the short-term mentality dominating these processes. The Government must encourage cross-departmental learning if we are to avoid repeating past mistakes,” she concluded.