West Coast Rail franchising and the Cabinet Office role

On Friday we gave our potted version of what went wrong with the West Coast Rail franchise process. The role of Cabinet Office in this is very interesting, but one of the few flaws in the Laidlaw Report actually is that he refers to “OGC” a couple of times when actually he means the Cabinet Office, OGC (the Office of Government Commerce) basically having disappeared early in 2011.

An initial Gateway review was carried out in April 2011 at a rail franchising programme level. But this was before things had really got going on the Wets Coast project – the review gave an Amber rating and the review summary Laidlaw published isn’t that interesting. The key document though (in the Laidlaw appendices) is the Major Projects Authority (MPA) review of the refranchising programme in March 2012.  Here’s some extracts from the “Amber/Red” rated review.

  • The programme is amongst the most complex and challenging across government, made more demanding by the shifting policy platform. The programme is significantly under resourced and the restrictions applied for recruitment and cosourcing has meant that the existing teams have been under enormous pressure. This is not sustainable.
  • The current governance does not meet best practice and is unlikely; to withstand the coming ramp up of workload, which will increase the requirement for collaborative working amongst team and the need for more timely decision making.
  • The project organisation and programme management support (such as PMO) needs to be strengthened,
  • There is an urgent need to ramp up the capacity of the delivery teams in several technical commercial and procurement disciplines. The current scheme of delegation with the Cabinet Office will hinder this and should be addressed in the submission to ERG of the ~Independent Assurance Plan.

If you’ve been following this, you will spot that this analysis was proved to be spot on, and many of the ultimate issues identified by Laidlaw were exactly as this review spotted in March. Now some of these points were picked up – for instance, an SRO was appointed (hooray!) But other issues correctly identified by the Cabinet Office were ignored.

The final review mentioned by Laidlaw was a “green” amazingly in July, this being the first review focusing purely on the West Coast project.  Laidlaw makes some veiled criticisms of this review -  a number of key officials weren’t interviewed and the SLF determination wasn’t considered (see previous posts for SLF definition). So whilst it was clearly not the main cause of the whole disaster, the Gateway / MPA process didn’t do anything to stop it. Something there for Cabinet Office to consider.

The other area in which the Cabinet Office role is questioned by Laidlaw is the issue of controls on spending generally, but more specifically on engagement of consultants. DfT did not use external financial consultants on the West Coast work in the way they had been engaged for previous franchising exercises, because of constraints on spending and use of consultants.

So, let’s finish our comments on the whole sorry tale for now – at least until more emerges of interest, which I’m sure it will.  Here are some over-arching points, not so much for DfT who have had plenty of advice from Laidlaw and NAO, but for Cabinet Office and public procurement more generally.

1. Do our public sector organisations have the capability and capacity any longer to execute complex procurement projects? If not, what are we going to do about it?

2. Are the Cabinet Office rules on engagement of consultants getting in the way of organisations actually delivering major projects successfully?

3. How can the Major Projects Authority make sure that they are engaged when they should be, and that when they identify issues, they are actually addressed before it’s too late?

4. And should the MPA be more critical – perhaps a straight “red” review would have got more action in March. Or should reviews be published – that would make it impossible for organisations to simply ignore the recommendations and continue to fail, without sanction or comment, until it’s too late.

Comments

  • Ian Heptinstall:

    Isnt the MPA like the ERG, a joint Cabinet Office/Treasury body?

    The Public Accounts Committee has recently reported that the MPA’s impact has been limited, in part because it runs on a shoestring and relies heavily on the individual departments! “….The Committee has long been concerned that warning signs of impending project failure are ignored by government”.

    It is good to see that this outsourcing project was reviewed by the MPA, but were they looking from a purely project management perspective, or did they have assess to procurement process insight too?

    One thing the MPA has done is to establish a major projects leadership academy at Oxford/Said Business School, acknowledging the fact that project management is not just applied common sense.

    Are HMG planning to do the same for procurement, acknowledging its is not just “big shopping” that anyone can do?

  • Ian Heptinstall:

    sorry about the missed typos!

  • Dave Orr:

    Fear is a great motivator, so would making these failures career ending help focus the minds of SROs and Permanent Secretaries?

    If you pay for your own audit then as the “piper” you can “call the tune”.

    Bring back the 4Ps part of the OGC for truly independent Gateway reviews as they were independently funded by the Treasury.

    In Somerset in 2005, Project ISiS (leading to controversial joint venture SW1 with IBM) were audited by 4Ps and produced a highly critical Gateway 1 review that they then point blank refused to moderate.

    Net result was that Somerset (under Strategic Director Sue Barnes – wife of Chief Constable Colin Port of Avon & Somerset Police) then engaged a consultancy (KPMG but could have been any of them) who produced anodyne reports on progress and success for the remaining Gateway reviews.

    These external reports have sufficient caveats in that they cannot be made responsible or held to account by out of pocket taxpayers if their “assurance” later fails. A Travel Insurance policy that never pays out! Just like the West Coast rail franchise contract

    Similarly, the dis-credited Audit Commission said it was all great for 7 years until finally in the face of a complete breakdown in relations and legal action they finally shut the stable door with the horse so long gone it was laughable.

    The MPA needs to independently funded and they need to be feared.

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