HS2 – How Not to Run a Government Mega-Project and How it Should Be Done

HIGH RISK, costly, complex and strategically important – these are a government ‘mega-projects’.  And the government hasn’t got a great track record, according to a report from the National Audit Office (NAO).

Looking at that track record of work auditing major projects, such as HS2, the NAO has set out the characteristics of public sector mega-projects and how to get better at delivering them.

It focuses on the challenges overseeing these projects from early stage to delivery, which can take decades.

At a time when government is making changes to the ways in which major projects are organised and overseen, and intends to publish a 10-year infrastructure strategy later in 2025, the NAO report aims to improve strategic governance and decision-making.

The Lessons Learned: Governance and Decision Making on Mega-Projects report cites the 2012 Olympic Games as an exemplar of strong leadership and shared purpose across central government that meant decisions were timely and goal focused.

How Not to Run a Government Mega-Project

HS2, on the other hand, is shown to have jumped the gun, with government allowing groundworks to start before design and planning had been completed leading to delays and inflationary cost rises. HS2 were unprepared to face foreseeable protests, planning appeals and judicial reviews.

And then government cancelled Phase 2 and is yet to come up with a plan of work for what’s left of the new rail line and its termination at London Euston Station.

Total final costs to the taxpayer are not known precisely, but thought to run to close to £80 billion. It’s “a casebook example of how not to run a major project”, as the Public Accounts Committee puts it.

Sir Geoffrey Clifton-Brown, Chair of the Committee said: “The Public Accounts Committee has seen time and time again how difficult government finds it to deliver mega-projects.

“HS2 is a case in point for the billions of pounds worth of taxpayers’ money put at risk due to failures in governance and oversight.”

“Government clearly has a long way to go to learn from and address the common issues that plague these mega-projects. Today’s NAO report should serve as an important guide for how government can strengthen governance and improve decision-making in the riskiest and most complex projects it oversees.”

How it Should Be Done

To address the risks mega-projects face, the NAO makes recommendations for HM Treasury and the new National Infrastructure and Service Transformation Authority (NISTA).

The report suggests improving how they categorise and define major projects according to their risk and strategic importance.

Governance of mega-projects should be strengthened to ensure roles and responsibilities are clearly understood.

Project gateways and business case approval processes need to ensure government has robust assurance about the affordability, value for money and feasibility of the project before it is given final approval to proceed.

The report also includes questions for project sponsors to consider as they set up governance arrangements.

Gareth Davies, Head of the NAO, said: “This report offers important insights from the National Audit Office’s work on government’s largest and riskiest projects. These lessons will assist the government as it makes changes to the way in which major projects are organised and overseen.

“Mega-projects often involve high levels of innovation, cost and risk, and can take decades to deliver and see the benefits. This means government needs stronger governance approaches for these projects.”

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