UK Lacks Skills and Capacity to Deliver Major Infrastructure Projects: MPs

Undated image of HS2 workers watching as a bridge is wheeled into position over the M42 at the HS2 interchange station site near Solihull. (Jacob King/PA)

Ministers have warned that Britain lacks the skills and capacity to deliver ambitious plans for major infrastructure over the next five years.

The government needs to ensure that future projects offer value for taxpayers’ money in the long term, a report by the Public Accounts Committee (PAC) has found.

Areas of concern include skills shortages in technical and engineering disciplines, as well as project management and design.

The warning follows the committee’s report on the progress of Britain’s High Speed 2 (HS2) railway line since 2013. The cross-party group of MPs said in February that HS2, whose northern leg has been scrapped over the project’s soaring costs, offers “very poor value for money” to taxpayers.

As the government looks to develop road, rail and energy sectors, the PAC’s inquiry heard that the “projected spend over the next five years is very high.”

Despite the government pumping £805 billion into 244 projects, ministers said there was not enough time and effort to maximise the value that comes from these projects.

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“Only 8 percent of the £432 billion spend on major projects in 2019 had robust impact evaluation plans in place and around two-thirds had no plans at all,” the committee said.

Dame Meg Hillier, who chairs PAC, has warned that government spending on major infrastructure projects is set to rise to unprecedented levels in the coming years.

“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,” Dame Meg said.

The outlook for Britain’s essential skills capacity is grim, given that shortages are pushing costs up in a globally competitive environment, she added.

The committee called on the Infrastructure and Projects Authority (IPA) and the Treasury to analyse and report on risks related to shortage of skills. It noted a lack of skills in specific trades, such as welding.

Given the global competition posed by countries with massive investment projects, such as Saudi Arabia, the government risks a surge in prices for scarce skills, PAC said.

Only 1,000—out of 16,000 required—project professionals have gained accreditation through the government’s major project leadership academy at the time of PAC’s report. This moved the committee to say that Britain risks failing to build a market capacity and encountering higher prices for wanted skills.

Realising Benefits

Government departments are not robust enough in realising the benefits of big projects and are too often focused on the short-term, the 26-page document said. This can lead to missed opportunities in the projects’ long-term value.

Major projects in the government portfolio fall into several categories, which include infrastructure and construction, military capability, transformation and service delivery and Information and communication technology.

Not all of these projects report monetised benefits, according to the 2022-2023 report by the IPA. The 244 major government projects worth £805 billion of whole life cost reported in 2022-2023 benefits totalling £758 billion.

The IPA said that while government projects aim to provide “world class, innovative and life-changing benefits,” it can be difficult to pinpoint their “real or estimable market price.”

Ministers have urged the IPA and the Treasury to look into operating a review stage and estimate what value a major project has achieved once it has been operational for some time.

The IPA said that it continues to work in equipping professionals with the skills and tools they need to deliver the UK’s most complex and novel projects.

In March, the government announced a new framework to boost productivity in public project delivery, using artificial intelligence.

“Under the new framework, the upskilling of project delivery professionals in data analytics and AI will also be accelerated to help tackle issues like overspend and delays,” the Cabinet Office said.