CIPFA, the Chartered Institute for Public Finance and Accountancy, has called on government to be more outcomes-focused, in a response to a government inquiry on management of major projects today 23 May.
While acknowledging the benefits that such projects can spread across the country, CIPFA’s response outlines the need for government’s perspective to be widened beyond just financial costs. This includes bringing fresh focus on the wider social, environmental and strategic outcomes of a major project.
Alan Bermingham, CIPFA policy manager, governments, said:
“Major projects in the past have not always delivered the prosperity or value for money that was promised – so it’s no wonder that public trust in projects like Crossrail and HS2 is waning.
“A focus on outcomes rather than delivery at the lowest possible cost will do more to rebuild trust in government, and deliver greater value for communities across the country.
“But to achieve this, more must be done to bring the right skills into government to manage complex commercial arrangements and implement strong procurement practices.”
The government’s relationship with the private sector was also an area of focus, with the response suggesting a lack of transparency and spiralling costs have damaged public perception of outsourced projects.
CIPFA believes that open book accounting would be one such way of regaining public trust. The practice would provide greater transparency around suppliers’ costs and profits, while also supporting improved ongoing management of project delivery.
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Notes to Editors
The Major Projects Authority defined major projects (in the public sector) as projects that meet any of the following criteria:
- It requires HM Treasury approval.
- It could lead to a breach in departmental expenditure limits.
- It involves significant levels of unplanned spending.
- It could set an expensive precedent.
Open book accounting
- Open book accounting (OBA) involves the scrutiny of a supplier’s costs and margins through the reporting of, or accessing, accounting data.
- It is a tool used to manage and control delivery of large, high value, high risk, complex projects and contracts.
- OBA supports greater transparency allowing both parties to be clear on the supplier’s charges, costs, and planned returns.
- OBA provides a basis to be able to review performance, agree the impact of change and to bring forward ideas for efficiency improvements.
- This supports better achievement of planned outcomes and value for money for the public purse.