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Infrastructure delivery stymied by skills shortage

The UK Government and wider economy lack the necessary skills and capacity to deliver ambitious plans for major infrastructure over the next five years. In a new report, the Public Accounts Committee (PAC) calls for the Government to set out how it will address these issues and ensure future projects offer value for taxpayers’ money in the long term.

Skills shortages in technical and engineering disciplines are set to worsen as gaps in the UK’s workforce are compounded by competition from major global development projects. Project management and design are also areas of concern, and skilled professionals in senior positions in particular. Of 16,000 project professionals that need to gain accreditation from the Government’s major project leadership academy, only 1,000 had done so at the time of the PAC’s report, which warns that failure to build market capacity could result in higher prices for scarce skills.

In March 2023, the Government Major Projects Portfolio included 244 projects with an estimated total whole-life cost of £805Bn. The PAC’s inquiry heard that this scale of investment is unprecedented and projected spend over the next five years is very high as the Government looks to develop sectors including road, rail and energy.

Despite this level of investment, the PAC believes government departments are failing to devote the time and effort needed to ensure they maximise the value that comes from projects. Only 8% of the £432Bn spend on major projects in 2019 had robust impact evaluation plans in place and around two-thirds had no plans at all. This is despite high quality evaluation being important to provide evidence for what works, demonstrate value and to make the case for or against further investment. Decisions are being made in the absence of evidence, putting value for money at unnecessary risk.

The report highlights good examples of effective cross-government working, which will be fundamental to delivering complex major projects. However, the PAC believes more must be done to incentivise departments to work together if we are to see this practice become systemic across all departments.

Dame Meg Hillier MP, Chair of the Committee, said: “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.

“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.”

Andrew Baldwin, Head of Policy and Public Affairs at the Association for Project Management (APM), said: “We have been warning for some time that there is an ever-growing gap between project professionals’ demand and their supply. This is serious, as the skills shortage has impacted on the current Government’s ability to achieve its levelling up programme, will impact on the likelihood of achieving net zero by 2030, and unless addressed, will seriously undermine any attempt to implement a party manifesto post-election.

“More must now be done to support the IPA to further professionalise project and programme management within government. Getting 1,000 accreditations per year is sterling work, but the IPA must be given the resources to rapidly increase numbers.

“Beyond this, we need to encourage new entrants, either via university or by changing career, and upskill the current workforce much faster. The Government would also benefit from increasing the number of Chartered project professionals working on major infrastructure projects.”

Dr David Crosthwaite, chief economist at the Building Cost Information Service (BCIS) said:BCIS completely agrees with the proposition by the Public Accounts Committee that the civil service does not have adequate skills to act as an informed client and oversee the delivery of major infrastructure projects and programmes.

“Primarily, skills in cost management, engineering, and project and programme management are lacking and as a result the Government must resort to the use of private sector consultants, at a significant cost to cover the shortfall in expertise.

“It’s questionable whether this approach represents value for public money.”