The Northern Ireland public sector’s current portfolio of major capital projects will cost £2.45 billion more to complete than was originally estimated. That is among the findings of a report published today (Tuesday 27 February) by Comptroller and Auditor General Dorinnia Carville.
This follow-up report on Major Capital Projects provides an overview of progress on 11 projects covered in a previous NI Audit Office (NIAO) report, published in December 2019, which included seven flagship infrastructure projects identified by the Northern Ireland Executive in 2015 as its highest priority projects. That 2019 report had identified cost overruns for the 11 projects of around £700 million. Based on current estimates provided by departments, the total cost overruns are now close to £1.94 billion. More than four years on, it remains the case that only one of the seven flagship projects has been completed.
Today’s report notes that delays and costs overruns have continued to persist in more recently approved projects. In the period April 2019 to August 2023, the major capital projects portfolio across Northern Ireland departments consisted of 77 projects. Originally estimated to cost £5.63 billion to complete, it is now expected to cost £8.08 billion, a 44 per cent increase on the original business case cost estimates. Only 9 of the 77 projects are expected to meet both their original time and cost estimates.
The report notes that, over the past ten years, there has been a series of reviews by bodies including the Strategic Investment Board, the Confederation of British Industry and the Organisation for Economic Co-operation and Development, as well as a 2020 report by the NI Assembly’s Public Accounts Committee. Collectively, these have highlighted significant weaknesses in the commissioning and delivery system for major capital projects in Northern Ireland, as well as the need for enhanced governance and improved staffing capacity and capability. While the report identifies some limited progress, it concludes that there is little evidence of the substantial reform that is necessary.
Commenting on the report’s findings, Dorinnia Carville commented:
“Major capital projects are inherently complex, and the reasons for delays and increased costs can, in some cases, be attributed in part to significant external factors, including the impact of the pandemic, inflation and global political factors. Even so, it remains extremely concerning that, more than four years after my Office’s last report on this issue, there is little evidence of improvement or past lessons learned being applied to new projects. Even among the flagship projects, identified as the Northern Ireland Executive’s highest priority, progress has been very limited. It is clear that departments are not achieving value for money in the delivery of these major capital projects.”
“Successful completion of capital projects is crucial for Northern Ireland in supporting our economy and ensuring the effective delivery of public services. Failure to make fundamental reforms to the way major capital projects are commissioned and delivered is a significant contributing factor in the substantial cost and time overruns identified in this report. A comprehensive transformation project must be established to overhaul the system for commissioning major capital projects and ensuring stronger accountability for how these projects are delivered.”
ENDS
Notes for Editors
1. The Comptroller and Auditor General (C&AG) is Head of the Northern Ireland Audit Office (the Audit Office). She and the NIAO are totally independent of Government. The C&AG certifies the accounts of Government Departments and a range of other public sector bodies. She has statutory authority to report to the Assembly on the economy, efficiency and effectiveness with which departments and public bodies use their resources. Her reports are published as Assembly papers.
2. The report is available on the Audit Office website at www.niauditoffice.gov.uk. The report is embargoed until 00.01 hrs on Tuesday 27 February 2024.
3. A previous report on this topic was published on 19 December 2019 and is available on the Audit Office website at www.niauditoffice.gov.uk.
4. For the purposes of this report, Major Capital Projects are defined as those estimated to cost in excess of £25 million, with a focus on major construction projects (excluding projects relating to local government and housing associations).
5. In 2015, the Northern Ireland Executive identified seven flagship infrastructure projects as its highest priority projects. Funding for these projects was allocated over a five-year period. The seven flagship projects are:
A5 road;
A6 road;
Belfast Rapid Transit;
Belfast Transport Hub;
Maternity and Children’s Hospital;
Regional and Sub-Regional Stadia; and
Northern Ireland Fire and Rescue Learning and Development Centre at Cookstown (formerly known as Desertcreat).
6.Today’s report includes case studies summarising progress / developments against each of the seven flagship projects. Information reported on individual projects is based on project overviews provided by departments on each of the flagship projects and an additional four projects which have experienced problems together with details of performance against business cases. The additional four projects were:
Critical Care Centre at the Royal Victoria Hospital;
Primary Community Care Centres at Lisburn and Newry;
Ulster University – Greater Belfast Development; and
Strule Shared Education Campus.