Welcome to the Public Accounts Committee on Thursday 26 June 2025. The Government spend substantial amounts of money on public major projects. These projects provide economic infrastructure, such as roads, railways and power stations, as well as social infrastructure, such as hospitals and schools. The Public Accounts Committee has long scrutinised the governance of major projects, particularly HS2 and the new hospital programme. Good governance in major projects involves clarity about who has authority and accountability, and emphasises the importance of outcomes, benefits and value, as well as cost. Today we will be exploring how better decisions can be made about the biggest, most innovative and high-profile projects and how they can be better governed. We will also be examining how the Office for Value for Money and the National Infrastructure and Service Transformation Authority—commonly known by its acronym, as it will be in the rest of this hearing, of NISTA—will improve the oversight and assurance of major projects and ensure clear strategic direction for infrastructure investment. To help us with that, we are delighted to have a very senior cast, particularly our Permanent secretary at the Treasury, James Bowler, who often appears before this Committee. We know how busy you are, so that is appreciated. You have been Permanent Secretary since October 2022 and prior to that you were Permanent Secretary of the Department for International Trade. David Lunn is interim director of corporate finance in the Treasury. David joined the Treasury in 2009, during the global financial crisis, and led the establishment of the UK Infrastructure Bank in 2021. Nick Donlevy is the director of public spending at HMT and held the role of deputy director for health and social care within HMT, so knows pretty well how it all works. David, although of course you and I have met each other on other matters, namely R&R, I think this is your first time before the Committee.

I have been here in other roles. It is the first time in this role.

Yes, it is the first time in this role as head of the Office for Value for Money, so welcome. You took over the Office for Value for Money in October 2024. From the NISTA, Jon Loveday, is this your first appearance?

It is my first appearance, yes.

Yes, you are particularly welcome. Nick and David, you have been before, have you not? Nick, you have not. I am sorry. Those who are regulars, great. Those who are first time, even greater. I hope that you will want to come again. Jon Loveday, director of infrastructure, enterprise and growth, has over 30 years of experience in the infrastructure sector and joined the Cabinet Office and HMT as director of infrastructure, enterprise and growth. You are very warmly welcome. Permanent Secretary, I think that you have been briefed on this and I do not mind if you want to just give us a generalised answer and perhaps follow it up with correspondence. We previously made recommendations to the IPA. There were about three of them and there have been Treasury replies on this. How will they be implemented with the formation of NISTA? I do not know whether you or Jon want to answer that.

The cleanest answer is that we are moving from an NIC and an IPA into a merged NISTA. That has no detrimental impact at all on the delivery of your former recommendations. I would pick out two of your Reports, one on major projects and one on resetting major projects. We will continue to update you, through Treasury minutes, on those Reports. Where you were updated by IPA in the past, you will be updated by NISTA in the future. All your recommendations hold, and I do not see a problem in the new structures. We will not be trying to say, “Now we can’t do it because we have new structures”. It is quite the opposite. We think that we have strengthened structures, which make us better able to deliver.

That is a perfectly good opening answer, and some of these issues may well come up in the hearing today anyway. We might reflect at the end of the hearing and, if those recommendations have not been completely covered, correspond with you. We will see how we get on.

No problem.

We do. It would be really helpful today to talk about the fact that we are implementing a fundamental reset in how we go about governance of our biggest projects. If I was to name the issues, there are a few, and you will collect quite a lot as you go around the panel. I guess that the bookend of this is whether strategy is clear and long term at the outset. You need that long-term view. We have just published an infrastructure strategy. The other end of that is whether our delivery apparatus is strong enough, and we think we have strengthened it with NISTA. On to the issues around big projects and so-called mega projects, I would point to three before the project even gets going in the construction phase and a couple as construction goes ahead. The first three are whether the objectives are clear, whether the design is mature or immature as you start construction, and whether budgets and schedules are announced too early. Those are three before you even get going and we can talk about how we will try to fix those. As you get into the actual delivery of the construction of a project, is budgeting too inflexible in the construction phase to allow for all the things that might change? Has decision making been too convoluted and is it actually blurring accountability in some phases? As we do the hearing, we can explore each of those perhaps and say what we intend to do about them. Is that a helpful start?

Yes, it is very helpful.

We have recently published, alongside the infrastructure strategy last week, the Office for Value for Money report about focusing on mega projects, so the very largest. The issues, as James has just described, are common. We recognise all those things James said and have introduced changes that will help get at those. One general point, though, that cuts across is a pressure to get going too early. That reflects all those early-stage things that James said about design, objectives and budgets. A lot of projects have felt a need to show early progress and momentum, and therefore go into delivery too early. The changes we have introduced, about publishing strategy and delivery plans, stages of development, staged funding to go through those development stages, and keeping costs and schedules at very wide ranges in those early stages when there is a lot of risk and uncertainty, are all intended to mitigate that risk of the inclination to go too early. That is intended to help with that. The only other thing I would mention is that one thing I feel with these projects, having been involved in a few over the years, is that they are really complicated and difficult things to do. They are very big and complicated. For any of the ones we might talk about, when you get into the detail, you tend to find that they are very complicated endeavours and need quite specialist skills. Being able to recruit and retain the right expertise at that early stage to lead them is key. In most cases we end up getting there, but, a bit like James’s point about governance being convoluted, it can be hard work getting through the machine to get those right skills and capabilities in place to lead a large, complex, technical endeavour. The freedoms that the Government have agreed and are being introduced for mega projects are all intended to get at those challenges.

I will give you two. The convoluted governance is real and that is driven by the wide variety of parties that tend to be involved. It is not just one Department, almost by definition. It goes beyond that. Finding ways to cut through that complexity caused by that, which I think David’s report has some thinking on, is important. To add something new, these things are by definition long term, and that means that certainly there will be change among the political cast, but also among the officials and the people working on it day to day. There are issues there. There is civil service churn and all those things. People do not necessarily hang around for the whole project and that can cause issues.

Building on the decision maker point and check, there is a desire to make sure that these projects are set up and proceeding correctly. That sometimes means that you have too many people checking other people’s work. Having a real sense of how decision makers are adding value through the process is really important. Why is somebody involved in the decision making process? That is where the NAO Report and David’s recommendations around a major decision panel, where you have just a small number of very senior people making decisions, is really critical. The other bit is about transparency. It is transparency to the public, so taking on board your Committee’s recommendation about publishing business cases, which is really important, and, within the programmes and within Government, being transparent about how things are progressing, certainly from a Treasury perspective, so that we can support Departments in managing risk and opportunity effectively through the life of the programme. We can only do that effectively if we are being transparent about how things are going, and identifying where risks are materialising and where there are opportunities to do things differently or more quickly. We need to get better at that.

The only thing I would add to the other comments is the ability to spend money early on front-end loading, so designing the work and spending up to 10% of the overall budget on a construction infrastructure project before the actual work starts onsite in a live environment. The adage here is to go slower to go much faster in the construction. That is something that, on some mega projects, has been a little bit alien and the pressure has been the opposite.

Before I say anything further, I want to draw attention to my entry in the Register of Members’ Interests as a fellow of the Royal Institution of Chartered Surveyors.

You mentioned everything about planning projects and all the expertise and decision making. One thing that was not mentioned was the public and how you take account of relationships with the public and public demands. It is particularly true of HS2. I do not see anywhere mentioned the whole role of private Bills in this, which is almost like a Christmas tree on which people can hang anything they want when they go through. That can fundamentally change costs and approach. I wondered whether that has any role at all in the new world that you are describing.

You make a really good point. We talked about changing objectives and undergoing feasibility before you say go. HS2 will almost certainly be an example we all come back to through this. I guess, on objective, was it about capacity or speed? Did it change? In terms of setting it out, the budget and schedule came really pretty early in HS2—I think in 2020—even before the legislation was changing the nature of it as it went through Parliament. The idea that David has set out, which I think is worth exploring, is that you have a high-level strategic delivery plan that you publish in Parliament, and therefore publicly, that says, “This is the aim of what we are trying to do and achieve.” That comes from the most senior levels of Parliament. That tries to get to the governance point, but also to the public point. Then you have—we have talked about “too early” quite a bit—a feasibility part, where you are not putting shovels in the ground and pouring concrete. You are saying, “We are looking at the options of how to do this.” That is funded separately; the big funding that will come for the construction is held back at this stage and you are looking at the feasibility. The idea is that, by the time you get to shovels in the ground, to use the analogy, you will have much better clarity on objective, public interface, legislation and the various options, so you are not starting building something that is about capacity but then changing it to speed halfway along. David, is that right?

Yes. The only thing I would add is that the capital P planning—the legal, statutory planning—is clearly a really important process for all projects. It is an important part of the early stages of developing a project, how it is going to be delivered and what sorts of timescales it is actually deliverable over. Clearly, planning can impact scope, and changes in scope have significant impacts on cost and time. There is legislation going through Parliament about the planning reform, which is intended to address some of the challenges that major projects have had in delivering infrastructure. To me, it is all part of that early stage. In different ways, we are all really talking about those early stages. Planning for going through statutory planning and making sure that that is addressed, that the budgets are not set beforehand when scope might change, and that the timescales for going through planning are recognised, are all parts of that getting it right at the start, for me. As we have said, publishing a strategy and delivery plan, which is strategic and about how things will be delivered, and going through incremental stages in a managed, controlled way, will help to address those planning requirements and, as Nick said, address the transparency to the public.

Clive has raised a very important point, which, if I understand it, has not quite been addressed, which is about the hybrid Bill procedure, as opposed to the normal planning procedure. That is a matter for Parliament, but, having sat on the hybrid Bill for HS2 for well over a year, I think it is a very unsatisfactory procedure. Separately to this hearing, we should consider which bits of the parliamentary procedure we need to write to, to say that they need to look at this. This is an important question arising from what you have all said. At what point is the button pressed on a mega project or a major project, having done all these inquiries, got all this information and hopefully done much better scoping, as you have all stressed? At what point does somebody press that button and say, “We are going to go ahead with this project,” and who makes that announcement?

I have a couple of points and I might ask others to come in. It is probably worth saying that we intend to recognise the very existence of mega projects to start with. We can muse about what constitutes a mega project, but that is an important step forward in and of itself, because then you recognise this enormous, long, complex, multi‑departmental project. On the point about when you press the button, in the past too often the button has been pressed too soon, with a public announcement to say not only that the Government are going ahead with project X but, “This is what it will cost and how long it will take to deliver.” The learning from that is that people have been keen to show that the commitment is real by setting out that it will be funded and all the rest of it. The danger of that is that you go ahead with too immature a design and it will change quite a bit down the line. The proposal for the future is that there is a funded and, necessarily long, feasibility section. The Treasury would fund that feasibility section where you are getting your ducks in a row and clarifying your objectives. You have set out publicly what it is you intend to do. You might even still be looking at different options. You are not saying, “This will cost £10 billion and take 10 years, and a ribbon will be cut opening it in 2035.” When you have gone through that feasibility study and the various business case processes, and you are ready to do that, you would then enter a construction phase. The construction phase would have a budget in and of itself. It would have flexibility in that budget, which is something the Treasury has not always been the champion of. We recognise that, if you can get through the feasibility and things are not changing, we can give a construction phase that flexibility. The assurance and the questions you are asking change from one of “whether” and strategy to delivery. David might help us on timescales. The feasibility study is a real and substantial phase that would not take weeks. It would be quite a substantial phase. Then you would follow up with a construction phase. This comes out pretty loud and clear from the experiences we have had to date.

To your specific point about the “pressing the button to go” decision, there is quite well-understood ground about projects going through strategic outline cases, outline business cases, and reaching a final investment decision, which is sort of the point that I think you are getting at. In our report, which has been agreed, we have said, for these mega projects that hit the way we have defined them, that should be a decision of the Prime Minister, the Chancellor of the Exchequer and the Secretary of State, to capture that cross-Government commitment that is made at the top of Government. That is the go decision and point. That follows, as James has described, all the feasibility, a strategy and the normal business case information, but with a top-of-Government decision for these really large, complex endeavours.

Just so that everybody is absolutely clear, you do your publication through Parliament. We all believe in transparency in this Committee. We like everything as transparent as possible. You then go away and do all this feasibility work. At some stage later, maybe months, even years, one of those three people who you referred to, David, will come back and make an announcement to Parliament that it is going ahead. Is that how it will work?

Basically, yes. There will be a final investment decision and then it will be announced. Then it can go into delivery. The funding decisions happen in Treasury machinery, but at a high level, yes.

We have just come through a spending review process where we set out some ambitions about what the Government’s capital and infrastructure programme is going to be. It is really important that those are a set of plans for how the Government want to spend their money over the next five and 10 years. We are funding programmes at various different stages of development, but those programmes will all have developed their business cases through those three steps of your strategic outline business case, your outline business case and your full business case. Then there are the five gateways that programmes go through in terms of those business cases being developed. Gate 3 is the point at which the final investment decision is made. Also, there is the guidance we published at the spending review, taking account of the recommendation you made about publication of business cases. That would be the point where we would expect the business case to be published, I think within four months of that. I will need to double check that, but I think that it is within four months of that decision being made, which is where we get the transparency going through the process. The key bit of the importance of having that decision taken at the highest level is that, through each of those three stages up to your investment decision, you are maturing your business case and understanding of the programme. At each point, you have a choice between the performance, cost and time of that programme. How do you want it to perform? What is the cost? When do you want it to be delivered? As things develop, you might need to make some trade-offs between those three key parameters. It is right, therefore, that, at that final investment decision, it is the most senior people in Government for mega projects who need to understand how you might have evolved your initial plans through all that work into your final proposition and final investment.

That was a really helpful answer. Permanent Secretary, the process is going to fundamentally change. It is going to fundamentally change for the Treasury, because, hitherto, the process was that the Department would go away and design these projects and come to you. You would approve the business case. You would approve and then say to it, “Go ahead and do it,” and it would be responsible for all the oversight of that project. Now the Treasury is going to have a much bigger role. Would you like to—very briefly, because we are not making much progress in this hearing yet, although this is very important stuff that we are covering—outline what that supervisory role is going to be? Do you have sufficient resources within your Department at the moment to do that, with a number of projects maybe going on simultaneously, or are you going to have to have more specialists within the Treasury to do it?

You are right. Unashamedly, the Treasury thinks it needs a greater role, coming out of these experiences. We can tell you what we think a mega project is. We think that we are doing three at the moment, so this is not everything.

Three being hospitals, HS2—

No, three being HS2, Sizewell C, and Dreadnought. We could debate it. As soon as you define something, you can debate it. To answer your question as to the Treasury’s role, it is to enforce this new approach, which, to a certain extent, has people holding off on announcements and things. In particular, the role of the Treasury would be to be around the decision-making table at the feasibility side of things, so the project side of things, and the construction side of things. We will request a seat at the board at both of those things. That is not a totally new concept and we do that. In terms of skills—we will come to this, I am sure—bringing Nick and IPA as NISTA into the Department is a big new injection of skills into the Department. It obviously existed before. We will be working to transform NISTA to deliver what we do. These will be the experts who will be advising, in particular, the Chief Secretary, but also Chancellor, of the balance between the Treasury’s core former role of budgeting, but also delivery. There is clearly a balance there, which I am sure we will come to, and they will have their expertise. We also have UKGI—UK Government Investments—which can be our shareholder on boards out there. I think that we will have the skills, although it is worth pointing out two further things. David’s team brings a formal corporate finance structure to the Treasury, which we have instituted to make sure we have the skills. That has been in other places, but we are bringing it all together. I have Jim O’Neil, the new second Permanent Secretary, coming from the Bank of America into the Treasury and bringing some of those private sector corporate finance skills into us. I am happy to explore any of those.

Unashamedly, our report gives Treasury more of a role in and more leverage over these mega projects. James Stewart’s report recently published on HS2 talks about Treasury as the ultimate financial shareholder. That is what we were trying to capture. The Treasury needs the sorts of roles and influence that James has described to protect its interests and look after its responsibility as financial shareholder.

There is lots arising from that. Let us move on a bit, and we may well come back to some of that. David, your corporate experience there is really key in how the UK does these projects compared to around the world. Are we going to become the best in class and deliver these on an internationally competitive basis? How will you ensure that we are doing that? How will you look at what others are doing around the world? Maybe, David, you have done some of this work. I do not know.

We did not look extensively at international comparisons for the work we have done recently. I think the IPA, now NISTA, and the NIC did. The NIC reported last year about international comparisons.

There are rumours—I do not think that they are necessarily true—that these mega projects, or even big projects, are more expensive in the UK than they are in some areas of the world. I do not think that that is necessarily true.

I am very happy to come in on this, Chair. The NIC did a report last year and it looked at things, controlling for certain aspects, and said that it was not necessarily the case. Others have done a number of studies that say that big projects can cost up to 10% or even 30% more in the UK, so we have been cognisant of all of that. The issues that people point to are population density and infrastructure density, but I would point to two other things about that. One is the planning system. I will not go into it, but we have a Planning and Infrastructure Bill before Parliament. It is deeply important to do proper planning, but to recognise the potential cost implications of uncertainty coming out of the planning system. There is a second thing I would point to. We have talked before about the need for an infrastructure strategy and a pipeline for delivery. Can you give investors and the supply chain the notice of what it is the UK public sector wants to do? The infrastructure strategy has the very large figure that we expect to spend £725 billion of capital over the next 10 years. That is notice to the supply chain that this is what is coming down the track. If you cannot give that long-term certainty, which we are moving to try to deliver, you also, of course, have the cost implications of everyone trying to access a supply chain at short notice and costs going up accordingly.

The National Infrastructure Commission identified previously that there was significant opportunity to improve productivity, from 20% to 40%, I think the Report suggested. The early stages of that include producing the 10-year infrastructure strategy to give clarity, so, rather than on an individual project basis, we can give the opportunity for a longer-term view. The pipeline that will be published before recess this year will give greater and further certainty to the supply chain and investors about what is going to be done and exactly when and where. As we start to integrate and roll out the 10-year infrastructure strategy properly, we will be able to look at the commercial basis on which contracts are let and what the most efficient way of doing that is. We have already adopted that type of process in the prison-building programme. We have already seen some significant improvements in terms of time, environmental benefits and other benefits through the repeatability of designs and certainty that that programme has been able to give.

You said that the Treasury was going to have a seat on the board of all these projects. How can the Treasury hold those boards to account if it is actually part of them?

It is a seat on the board. It is not chairing the board. You might have taken evidence on Sizewell, for example, and how we are structuring that. Ultimately, it comes back to the transparency point Mr Donlevy was talking about. The Treasury needs to receive up-to-date, instant information on what is going on. We have plans to report quarterly and have a seat on the board to be able to influence that. Ultimately, the Treasury has the Minister’s agreement as to whether things should go ahead and, as your Report—was it last year?—talked about, whether the project needs to be reset. It is not solely the Treasury’s domain, but the Treasury has some quite significant levers. You are probably right. We are saying that the Treasury should have more sight and engagement on this. The Treasury is not running these projects; far from it. It is our job to set up the governance framework for them and we are proposing to improve that. They are still being run by, normally, delivery bodies set up by the Departments involved. HS2 Ltd would be the most obvious one. I do not know whether that helps.

What we cannot change is that there are, ultimately, political decisions. We are not changing anything about the democratic accountability. Saying, as James has talked about, that there should be a feasibility stage at the start, with publication of the strategy and the delivery plan for a major project that defines stages it will go through, effectively funds it in those stages of development—all those cost and schedule estimates are very broad ranges at that time—and sets out how the governance is going to work, is intended to mitigate the risk of going too early. It cannot stop it completely. It can make it transparent, laying it before Parliament so that Parliament has full visibility. It is trying to mitigate that risk of the inclination to go too early.

It is a really good point. Of course politicians are not going to want to say, “We don’t know what we are going to do,” and come back. The answer is about flexibility, ranges and being clear that that is not a weakness of the system. Not thinking you have to be absolutely specific about exactly what something is going to cost and exactly when it is finished is not a weakness or not being committed to the project. It is a sensible thing. There is talk in David’s thing about using ranges. Further detail and clarification, and the thing on the triangle that Nick talked about, is to be welcomed. There is a role for a Committee such as yours here, which is pushing us to have a feasibility stage and not saying, “I need the absolute specifics. When will this project be opened and exactly how much will it cost?”

I am not an expert. For me, the immature design is a really big risk. If you are saying, “This is going to cost this and finish there,” but you do not really know exactly what you are going to build, that would be the one I would point to.

It is worth reinforcing that there are three significantly new things that have been proposed and accepted. The first of those was the 10-year infrastructure strategy, which has now been published. That identifies all the economic and social infrastructure projects that the Government intend to build over the next 10 years. The pipeline that will follow that will give real detail around which of those projects are going, at what time and how much will be spent, when it is known, over each individual year. When there is still a level of uncertainty, it will follow the NISTA guidance on cost estimating, which has a broad range at the start and will come down as the maturity develops. The third point, particularly for the mega projects, is the mega projects decision panel that the Office for Value for Money recommendation created. That is new. The Permanent Secretary of the Cabinet Office, a director general within HMT and the CEO of NISTA will sit on that panel. They will advise the Chancellor, Chief Secretary and Prime Minister on the go/no-go decision points. At that point, there will be a significant amount of assurance work done, certainly identifying the risks. Things such as the James Stewart review have been exceptionally helpful in identifying areas where risks have not been properly understood or priced. A lot of the thinking that has come out of the James Stewart review has already gone into some of the other mega projects, such as Sizewell C. That learning is already happening and being embedded.

There were four main-work civil contracts with HS2. There are 26 for Sizewell.

There is one alliance, but it is broken down into 26 packages.

That is what you told me yesterday.

Yes, sorry. It is just a nuance. It breaks it down. It is a long project that is going to take over 10 years to build. Rather than trying to put it all into huge buckets of uncertain risk, it breaks that down into 26 smaller elements, so each one can be designed and matured individually, the estimate can be matured and, importantly, the schedule can be developed.

There are two other things I would add. One is the staged approvals process that David has recommended in his review, which is that funding is only provided from the Treasury to get you to the next stage of approval. You are only able to proceed once the major projects decision panel is satisfied that the programme is in a position to be ready.

You would release the money when we are confident that the money is going to be spent well in the delivery of the programme. That is important in terms of demonstrating that the stage gates are a real decision-making process. There is clearly a choice there about slowing the programme down to get it right. This goes back to a development mantra that, I think, David, you also bring out in your report about “go slow to go fast”. You go slow at the start when you are going through your planning, because that enables you to accelerate your delivery because you have better delivery plans. Given the way accountability for money works in Government, there is quite a big change between working on the assumption you are going to get an approval at some point and actually having money in your bank account, as it were, from a programme perspective. As an official who has worked through these processes in the Treasury and elsewhere in Whitehall, having NISTA as a key part of the Treasury, working alongside the spending teams, which tend to manage the relationship between the Treasury and Departments, means that we have expertise now right at the centre of the Treasury and one voice advising the Chief Secretary. Making sure that we are in the best possible position to advise our Ministers on whether the programmes are ready to proceed is another really important element.

It is also probably worth distinguishing that we are talking about mega projects. As I say, at the moment we are doing three. When you come to HS2, for example, we have just given it its own budget.

It is a separate line.

When you are releasing budgets for these things in the future, you are releasing a budget for this mega project. It is not like, “Here is your budget, Department for Transport. Good luck managing it all.”

As you say, HS2 is going through a reset. A lot of information was published about that last week. The changes we have introduced cannot fully apply until it comes out of the reset and has a settled baseline of schedule and cost. There were some decisions about scope in all that. It needs to work through that reset. I think that the start of your question was how these risks get addressed so that things do not happen too early. That is the work of addressing challenges, whether they are about scope or delivery. That is why feasibility studies need to be funded and development work needs to be done before there is a commitment. There might be an intent for a power station, a rail line or whatever it is, but there is not a commitment to deliver it until the question earlier about when the go decision is made. That is the final investment decision. With HS2 now, it is in a reset process and therefore there is no settled funding profile for through to the end of the project. There are decisions still to be made about that. Therefore we will apply all the changes in our report, or Treasury and central Government will apply them, once the reset outcome is clear, the baseline is clear and the decision through to the end can be made about funding. It cannot be fully applied at the moment.

I am slightly surprised by that answer, because I would have thought that these new processes would have wanted to be involved. If we were starting HS2 now, we would start the new processes. Why are the new processes not involved in the reset? Let me clarify. Your answer tended to imply—and it may be that I have got it wrong; I don’t know—that you were not going to come in until the timetables and the costings were known. I would have thought that this process ought to be involved now.

Sorry, I did not mean to suggest that, so I apologise. It is a timing point. The extent of the work to do that reset has been published recently. The governance changes that the James Stewart report talks about, to have the bespoke documents, is work that is going on now. Treasury is supporting that. Those sorts of changes are being put in place.

You are on the HS2 board.

I am on the HS2 board, on behalf of Treasury, doing the sort of role that James talked about earlier. That is all going on now. Those sorts of changes that can be made now are being done, so governance changes and assurance being simplified. Those are happening. Setting a funding envelope for the whole project through to the end cannot really be done until there is a new cost and schedule baseline, which the documents published last week talk about. It is just a timing difference on the funding settlement.

We intend to apply these to HS2. We are working through that as part of the reset, and we will do so. You will see these things reflected in HS2. I think that what David is saying is that we are not doing it tomorrow.

That is very helpful, Permanent Secretary. Thank you.

To be clear, in the spending review we published the profile for HS2 for the spending review period, and the reset will be done within that profile. We then need to have decisions about what that means for the programme when the reset has been done.

Sarah, sorry to interrupt.

Can I start that off? I might ask the experts to say how we are going to do it. There is a danger of a good-news culture, as people call it, which is telling people what they want to hear and, from a Treasury point of view, particularly about costs. It is the case in HS2, but also elsewhere, that it is on budget and then, “Bang. Oh no, it isn’t.” When we talk about a convoluted assurance system, some of that is about the process being too late and too far down the track to address that. There are two things, and others might want to pick this up. One is quarterly reporting on costs. There is a separation of feasibility. We will not go back into that. There is quarterly reporting costs, so you cannot get this total break from Parliament, where it has not heard anything for a year and then it is a big shock. Secondly, there is the mid-flight thing that I would describe as how you do substance over process. Nick talked earlier about how there can be lots of busyness, but how do you actually get the right decisions taken at the right time? Does anyone want to pick that up?

The reporting and the assurance are the two key things. Assurance is a bit technical and a dry subject, but it is really important that there is sufficiently specialist and independent assurance as projects are progressing.

Some of the jargon around it is about having different lines of defence. The first line is in the management. The National Audit Office is often seen as part of the third line because it is outside the management of the project, looking at something with an independent eye. I probably should not have referred to the NAO in that context. It is bringing in external gateway reviews and having an independent view that is sufficiently expert and independent of those managing the project. Those making decisions and receiving updates have assurance they can rely on. Assurance is important. All the changes put greater clarity of accountability on the SRO and those regular reports into the centre of Government will really help with that.

I think that part of the question was around changing the culture. Significant work has been done over the last few years in terms of improving the project delivery function and profession. There are now 18,000 civil servants who identify that as their primary profession. I might be wrong, but I think that it is the second largest function across Government. As we have been doing in a previous incarnation as the Infrastructure and Projects Authority and we will now continue as NISTA, we will head that function and ensure that standards and training are very consistent. Culture varies. It varies across Departments and arm’s length bodies. We are putting all the senior responsible owners and project directors through bespoke training programmes with Oxford University, industry, Cranfield University and others.

It has. We have already put 1,376 people through the Major Projects Leadership Academy, which is a combination of Oxford University and AtkinsRéalis. We have put nearly 3,000 people through the level below that, which is the project leadership programme. We have also taken 135 directors general through an orchestrating major projects training. We also provide ministerial training. Again, it comes back to training around announcements, cost estimating and those types of really important skills. We are starting to see the benefits of that. If you take the Government’s major projects portfolio, across that, 81% of the senior responsible owners as we sit here today have either gone through the MPLA or are partway through their training, because it takes about a year to get through the programme.

Can I pick you up on that answer? It may be that you did not cover this. You talked about the people who are going through that project, which sounds excellent, I have to say. You talked about the directors, but I think a critical level in this piece is the senior responsible owners. There has been a real problem with them. First, they just happen to be Buggins’ turn within the Department. It happens to come along that they look after this project and they have no particular skills in it. Secondly, often they do not stay the course of the entire project. I wonder whether the senior responsible owners are going through that training programme as well.

Apologies, I possibly was not clear enough. It is the 81% of the senior responsible owners currently who have been through the Major Projects Leadership Academy. We are very insistent that the NISTA CEO will sign off the appointment letters for every SRO. If they do not have the requisite qualifications or experience, we insist on that or make sure that the team around them is suitably qualified.

There is the second part of my question. You cannot guarantee this. Nobody knows what is going to happen in the future, but, where possible, a senior responsible owner should be there for the entire course of the project.

I do not necessarily fully agree with that point, because I think it depends on the phase of the project. That is what we have identified certainly over some of the mega projects. You can take Thames tideway tunnel as a really good example. The leader on that initially was very good at setting the project up, the finance and getting it through planning. The current leader, the chief executive, is an excellent delivery person. At different stages of the mega projects, they may need slightly different leadership lenses. That is quite healthy, but, again, that is the bespoke nature of each of these projects. We need to look at them individually.

I reprimand myself, because one of the lessons we learned from the Elizabeth line was that you started with the civils but then there was a systems integration. This may well apply to HS2. We must move on.

To follow up on the skills and culture, is there any way in which, developing these skills and culture on one project, you can actually move people to other projects and do some cross-learning? When a new project starts, can you not learn from previous projects with the skilled people you have? Is there a plan to do that?

There is. Skills is a broad agenda within infrastructure and construction at the moment, but I will give you a real example of a private sector project. Hinkley Point C is in construction at the moment. We are going through the final stages of setting up Sizewell C, which is, broadly, a replication of Hinkley Point C. We have a shortly to be signed collaboration agreement between the owners of Hinkley and Sizewell, so we are collaborating with people, design and efficiencies to transfer, at the right times, so it is not detrimental to either project, the skills and the individuals across.

In terms of the skills that are available, how far are these programmes and the training of people extended into the private sector? Is this just a public sector thing? In the end, many of these projects will be delivered by private sector companies. It is great if the people there have the similar skills and approach, and equally going on to think about projects that are in local government maybe. Is there a reach-out to try to improve the skills there as well?

There is. Currently, we cover the departmental teams. We also cover arm’s length bodies, and we are extending that into combined authorities as well, so there is better representation coming through. On the private sector skills and training, part of the deal that we have created by publishing the 10-year infrastructure strategy and the pipeline is that it gives the supply chain the certainty to go and invest in the skills and resources that it needs. That is what we are trying to do off the back of that, but that will come through later. There is a separate skills mission board that Mark Reynolds of Mace and the Deputy Prime Minister are chairing. I think that the first meeting is today.

That is also the thinking on the long-term funding commitments as part of the strategy, so the 10-year commitments on hospital and schools maintenance. It is all about giving private sector contractors foresight, so they can put their plans in place and get everything in place that you need to do that efficiently.

This is a bit of a segue, Chair; excuse me. I wanted to bring to the Committee’s attention, because I know that you have been focusing on it for so many years, how much of the investment strategy is not about big, new, shiny projects, but also about maintenance and keeping assets. I think that £10 billion of the commitment is in health, school and justice maintenance. That was a very conscious decision in this spending review to make sure that everything was not on the new and shiny. It was also on the keeping the overall asset base up to a standard that allows the best delivery of public services, which we did very consciously.

I was not going to ask this question at this stage, but you raised it.

Sorry, I do not know why I decided to. I was so pleased with that outcome.

I would like to ask something we were discussing before you all came into the room, and this is whole-life costs of a project. You can do a project in different ways, and we were talking before you came in about HS2. You can either put the whole track on cinders, or put it on concrete. There is a vast difference in cost, but, actually, at whole-life cost, in terms of maintenance, one may equate to the other. I do not know which of you wants to answer. At what stage in these big projects will you consider the whole-life cost?

You should be considering the whole-life cost throughout the whole stage of the business case. That comes back to that triangle I talked about earlier of the performance, cost and time. That is a really good example of where you could make some trade-offs with your performance, with a much better track bed that will last longer and require less maintenance over a period, but will cost more in terms of upfront investment and probably take longer to deliver than something that would be made of cinders, which could be laid down quickly and more cheaply, but in the long run would not last as long. Those are exactly the sets of choices that should be made through probably the second phase, when you are thinking about the planning of the project and how you might want to scope it out. That is where a tool such as the Green Book will help you understand what the different options are for your delivery and how they then compare against each of the five cases. From that perspective, they both would help deliver the strategic case, for example, but one would be much better as an economic case in terms of the whole-life cost, whereas the other might be easier in the short term as a financial case, but from a longer-term financial perspective would be more difficult. That is where you would start to bring those out for decision makers. That would enable you to then perform the analysis, so that, ultimately, Ministers can make the decision about where they want the programme to sit on that triangle.

Thank you very much. That is very helpful, Nick.

I want to speak a little bit about the infrastructure strategy. Since this Report was published, the infrastructure strategy has been released, to great fanfare. Mr Loveday, you talked a little bit earlier about the importance of the pipeline, which is being released slightly after the infrastructure strategy. I think that we are expecting it next month. I do not know whether that is your expectation.

In July, yes.

That will provide investor certainty and, picking up on something Mr Bowler said earlier on, less pressure on suppliers, so you do not have lots of things going on all at the same time requiring the same contractors. Are there other elements to the infrastructure strategy that you think are going to improve project delivery, Mr Loveday?

The whole premise of producing the strategy is there to improve project delivery. We have not been able to do that as successfully previously, because it tended to be on a very short-term basis. Previously, the National Infrastructure Commission would do a five-yearly assessment of infrastructure needs and Government would respond to that with, “This is what we are going to do.” With the infrastructure strategy, we have been able to bring the Treasury thinking, the NIC thinking and the IPA delivery thinking together into, “Here is what we are actually going to do and what we are going to fund over the 10-year period.” It is the first step in enabling a far clearer picture, where everything is far more visible and organisations and people can be held to account much more clearly because everything is very clear. The 10-year infrastructure strategy clearly identifies, for example, the number of schools that will be built in particular regions over the 10 years. As the pipeline evolves, it will identify which of those schools are going and when. I should probably point out that the pipeline will be updated on a six-monthly basis as and when the detail on those projects becomes available. When it is released in July, it will not have everything in there because we do not know everything yet. Some Departments have not finished their prioritisation programmes and analysis following the spending review process.

Mr Donlevy, what is your view? Is the infrastructure strategy going to resolve some of those root-cause problems that we have with getting infrastructure built?

Yes, for lots of the reasons that we have explored. One of the other really important bits is the interaction with the spending review. It followed the spending review. The spending review set Departments capital budgets for five years. That gives Departments a very significant amount of certainty. The infrastructure strategy then sets some assumptions about spending for the next five years, so we have 10-year budgets. One of the big criticisms has been that we have not had that financial certainty. That is a really important change. The Chancellor has also committed to reviewing the spending review every two years and setting budgets for at least three years over a forecast period. The infrastructure strategy will also be refreshed alongside that. We will have a continuing process of setting detailed plans for an extended period of time, having those plans reviewed and updated—that is a better phrase than “reset”—every two years. We are doing the finances and the infrastructure strategy in a symbiotic process, which also means we have those two things moving forward together. That is a really important innovation that we have taken forward as part of this process.

Will this change mean that the Treasury can maintain a focus on long-term value for money as opposed to having to balance the books in the short term?

Yes, I think so. The Treasury is the Department that is leading the Prime Minister’s growth mission and the Chancellor is the leader of that growth mission. A really important part of what the Chancellor has wanted us to do through the spending review and the infrastructure strategy is to make sure we are seeing the benefit that the infrastructure has to long-term growth. That is as important in our decision making as the management of the day-to-day finances. Those two things are integral together. Seeing them together means we are taking it forward in a better way.

I would just point out a couple of other parts of the infrastructure strategy, which we thought were important as we were developing it and do go to value. The first is the strategy. Previously, the work of the NIC has focused on economic infrastructure. This strategy looks at social infrastructure as well. It talks about hospitals, schools and prisons. In that context, there is a part of it that talks about something we call the social infrastructure roadmap. That is about better identifying asset condition data across the estate. It is about thinking about whether there are learnings that one part of the estate can make from the other and thinking more effectively around contractual form and contract type through that process. Like I say, we think that is an important part of it. The other important thing is around spatial planning. Every area has a local spatial plan at the moment, but there is a big theme and a big role for NISTA around joining up those local spatial plans and making sure that the sectoral plans—the water plan, the energy plan, the electricity plan—form together as part of a more cohesive whole so that, when you are thinking about individual parts of infrastructure, you are thinking about the piece more generally. That should go towards value because you get better value by integrating rather than doing things on a piecemeal basis.

How will you change the way you are working with individual Departments? You have talked about schools and hospitals. There is a role for the Department for Education and Department of Health and Social Care there. How will you change the way that you are working with those Departments and others to ensure that the spend on both maintenance and new capital projects is more effective?

In the social infrastructure context, that is the social infrastructure roadmap. This is about creating a new role for NISTA to bring together the best learning across those individual Departments. Generally speaking, people think the Department for Education is in a very good place when it comes to understanding where the problems are and bringing back learning more generally across the piece. Like I say, it is also thinking about best practice and bringing it together. There is a learning stream across the piece.

You have said the Department for Education is in a very good place. That is not because the condition of its assets is good, which is not what we are hearing, but because it has a good understanding of where the assets are that particularly need attention. By implication, you did not say the Department of Health and Social Care was good.

I did not say it was bad.

You say there is shared learning. How are you facilitating that?

That is where NISTA will come in. It will make sure that those conversations happen. As part of developing the infrastructure strategy, we have had lots of those cross-government conversations. There is an enthusiasm to do that. People want to be clear that, if they have good practice, they are not going to be prevented from continuing to utilise that good practice. There is a genuine willingness and awareness that they can learn things from elsewhere. There is a keenness to do it.

Mr Loveday, will one of the roles of NISTA be to facilitate some of those cross-government conversations?

Absolutely, yes. Standardisation is one of the things that we are looking at doing. We have produced a data standard and we will be looking at asset condition as part of the rollout of the 10-year infrastructure strategy. It is different in different sectors. In education, it is very well understood. If we take the water sector, the condition of underground assets is very poorly understood. We have a huge range across various sectors. We need to standardise that. That will take quite some time to do, particularly in sectors where the assets are hidden or underground.

Do you have a timeline for that, particularly with these underground assets?

We do not. We have only just agreed to do the roadmap. NISTA is still fairly new. We can come back with a proposed timeline, but we have not done that work yet.

Before we leave the 10-year infrastructure plan—this may be your domain or David’s domain; I’m not sure—the whole point of having a pipeline is to ensure you have the right skills, particularly those shortage skills such as tunnelling, where you go from one project to another. Hopefully, the tunnelling people do not go abroad. Maybe we should bring in the Permanent Secretary; I don’t know. How will you decide on competing priorities? You might get the Department of Health saying, “I desperately need these new hospitals,” but you might get the Department for Energy saying, “I desperately need this new nuclear power station.” How are you going to decide on those competing priorities?

Part of it is the spatial planning piece, but having the infrastructure strategy and having the pipeline now enables us to identify those issues. We can see a potential hotspot on the east coast of England at the moment with Sizewell C, “Great Grid Upgrade” from National Grid, Universal Studios, Lower Thames Crossing and two reservoirs for Anglian Water. I could go on. We are bringing together a number of those organisations. They are talking actively around skills and they are investing jointly in some training facilities. Again, one of the benefits that we see from this is being able to develop local skills and local jobs because we can see at least 10 years ahead of us, so we know what that capacity needs to be. There is certainly demand. I fully expect that one of the things we will look at post the publication of the pipeline is whether we could be more specific and granular about the skill requirements that are needed. That is something that we are actively considering.

Could I add one very small point on the pipeline? It would be wrong to think of the pipeline as a decision tool. The pipeline is not the place where decisions get taken. It reflects the decisions that have been taken elsewhere through the spending review.

If it is not a decision tool—there is no point having a pipeline unless we are co-ordinating all the required skills—who is making those decisions?

That would happen through the spending review process. It would happen through the expertise that NISTA is now in a position to input into the spending review process. Like I say, the pipeline reflects those decisions, as they have been taken. The hope is that there will then be a positive feedback effect. As the industry sees the flow of projects coming down the line, it will be able to think about its apprenticeship programmes, its training programmes, et cetera.

NISTA played a really important role in the spending review in helping us understand the overall deliverability of the different programmes that were put forward by Departments both from an individual perspective and by helping us step back and ask whether the portfolio of programmes is deliverable with the skills base and the market that we have at the moment, and then think about how we need to grow the skills base and the market so we can deliver Government’s ambitions for the future.

How far does this link into the Government’s stated intention in public procurement to make sure that as much as possible is done with British firms? One of the problems in the past has been that British companies are often not in place to do things because they say they have not been able to invest. A classic one is light rail. We import all our light rail units from abroad because there is no consistency of long-term investment that British companies could see to put in place the development.

The big test is, “Does this give the private sector the confidence to invest?” The confidence will come from the fact that what we say is what we do and that everything does not get revised and changed. We have made exactly the right start by setting out not just departmental budgets but a strategy for 10 years and a pipeline that goes, “This is what it will all mean.” There is going to need to be a lot of engagement with the sector to say, “This is what we intend. Can you do it?” As we have seen with house building, it is about having the confidence that it will be there when we do it. Success will be companies investing to set up in this country the ability to deliver on all of that. It is a really good baseline, a really good start. The sophistication comes from lots of conversations with those companies setting all this out. DBT and others have the expertise in some of that. Do you want to say anything, Jon?

There is also the industrial strategy that has recently been published, which identifies some of those opportunity areas. We will not always have all the skills in this country, particularly some of the specialist nuclear skills. We are reliant on a global supply chain for critical components, minerals and those sorts of things. We have done an awful lot of collaboration with industry through the generation of the infrastructure strategy and the pipeline. We have had significant encouragement on the direction of travel. This will enable and unlock the potential to develop further skills and employment opportunities.

This is a new way forward. The area I am particularly interested in is housing. I have heard frustration from the construction industry in the past is that we know we are going to be short of skills—as things stand, we are not going to have enough skills to build 1.5 million homes—and, therefore, we should be building more homes through modern methods of construction. Those companies are not being set up. Where they have been, some of them have failed because they have not had that certainty about long-term demand coming through.

We cannot provide all of the answer to that, but, in our purview, this really does provide long-term certainty. Nick will correct me. The spending review includes a 10-year affordable home budget. House builders can see what the Government are going to spend—it is very large—in the next decade. To the point, that sets the skeleton. It is then for MHCLG to engage very actively with the industry on how that is going to be delivered. We will be highly encouraging of that because value for money will come from being able to do units cheaper by using economies of scale and all the rest of it. We will be keen to push that.

There is a new housing bank as well. There is a lot of firepower going into that area as well as the affordable housing programme. There is a lot there.

Can I ask you about the Green Book, please? It is Nick or possibly David I want to talk to. The spending review says you are going to introduce place-based business cases to bring together the projects needed to achieve the objectives of a particular place. How are the changes to the Green Book going to ensure that projects are effective place-based interventions?

We have made a number of changes to the Green Book, the most important of which is the place-based business case that you identify. The key objective of the place-based business case is to bring together all in one place the different projects and programmes that will make a substantial difference to that particular place and, importantly, where those programmes are greater than the sum of their parts. The academics we talked to through the Green Book review talked about the complementarities between the different programmes. In a particular area, particularly areas of social disadvantage, you are looking at the improvements that you are making in terms of the social infrastructure or the transport infrastructure and what impact those might have in relation to the education infrastructure. It is about how you bring those together and how they come together to be more than the sum of their parts. That is about the strategic objective that you want to deliver in terms of supporting the regeneration of a particular area or economic growth in a particular area. It also looks at cost-benefit ratios. When you put those things together, they complement each other. If you look at them together, do you have a higher benefit-cost ratio than if you look at them independently? That is particularly important for a number of individual projects or programmes. They would not necessarily be the mega projects. For mega projects, HS2, for example, will have a very important transport impact in a particular area, but the benefits of HS2 in combination with some of the other investments that you might make alongside it in a particular area would then further enhance the benefits you will get from that suite of investments. You would not necessarily see that, if you were bringing it out on an individual basis. That is the theory. There is some work that we need to do, particularly with individual places, to work up how we are going to take this piece of work forward. We are doing that jointly with MHCLG through a panel chaired by one of the Second Permanent Secretaries of the Treasury with relevant senior officials in MHCLG. We are hoping to work with mayoral combined authorities in particular to look at how we can develop this practice into something that really supports decision makers to make better decisions.

My experience of the Green Book is from being a council leader in Stirling before being elected. An observation that I and the senior officers had was that the Green Book approaches to a £20 million project and a £2 billion project seem very similar. It does not seem to be weighted. It is harder for smaller organisations to put the resource in to do the Green Book analysis. If a council is doing something next to HS2, how are you going to ensure it is able to resource that and feed into the Green Book analysis for the bigger project with the bigger resources?

There are a couple of things there. First, this is about the simplification of the Green Book. The Green Book has evolved over many years. One of the commitments that we made in the Green Book review alongside the spending review was to do a radical simplification of the Green Book to make it much easier for practitioners to use. That will involve bringing it up to date. Some of the language is quite antiquated; it is very convoluted. There is a lot that we could do to simplify it, which will enable people to use it more effectively. We also want to be clear on how you tailor the use of the Green Book to the particular projects and programme that you are taking forward. You should not take exactly the same approach to a £20 million programme as to a £2 billion programme. There is a set of principles that are really important, but you need to make sure you tailor it. Quite a lot of that comes with what we can do to improve the capability of the users of the Green Book. There is quite a long-running training programme called better business cases, which we run across the public sector for practitioners to learn how to use the business case and to share best practice. We are looking to see how we can extend that and support local areas to improve capability. That is also particularly important because we want to support local councils to have the capability in-house rather than rely on external consultants, which is what they often do. That is where you often see the ratcheting up of the amount of work that needs to be done rather than thinking about what is necessary to support decision makers in that particular area and what is absolutely necessary for them to take the best decision.

Chair, I hope you will forgive me for carrying on a little bit on smaller projects. I know we are talking about big projects. One of the reasons that councils tend not to have that as an internal resource is that they do not need it all the time. They buy it in. There is an economic reason that they buy it in. When it comes to the economic assessment, a lot of times we are doing the same calculations using the same data and we are coming up with the same answers in isolation. A shared resource for the economic assessments required would certainly be helpful. Could some consideration be given to looking at the Green Book process and asking, “What stuff can we help people provide?” There is learning that can be done between organisations, but there is also data that you have when you get all this back. You know there is a commonality to it. What are you going to do to support councils and other organisations not to duplicate the same work? Could you provide a shared calculator or shared resource to make that easier?

That is a really good point. Can I take that away and come back to you on that? That is something that we should take away as the work goes forward.

You make a really good point. There are a couple of things that I will say on this. The accusation was that if the objective is to regenerate a place generally, it is not helpful to look at a transport project and then entirely separately to look at a housing project, neither of which in isolation will amount to the thing you would are trying to do. This step forward is to look at them together and say, “If you did these things together, it would have a really rather transformative effect on a place. You should show that benefit. There are no arbitrary thresholds.” That is really quite a big step forward. Secondly, as we look at how we do some of these things, the governance really matters. I would point to Lord Vallance’s chairing of the Oxford-Cambridge approach at the moment. Is that a railway project with East West Rail? Is it a housing project with Cambridge, Oxford and a potential new town? Is it a business project that is generating growth, labs and all of that? The answer is that it is all those things. We need to take—the dreaded word—a holistic view. I have never used that word, sorry. I withdraw that word. Taking a whole view is very sensible. Appointing Lord Vallance to have a ministerial oversight board that has all those people looking at it is such a step forward in doing that kind of thing.

Permanent Secretary, can I just come in? That is a really interesting answer that you have given to my colleague Chris. There is an area in here that worries me, which is the creation of these new strategic mayors. At least for a start, the new ones are not going to have the infrastructure to deal with these very big infrastructure projects. They may in time build up that infrastructure, but they will not have it to begin with. How will you support them? Where there is a really big project, such as a big road or something that affects more than one of them, how will you encourage them to work together?

I know there is quite a lot in train on this in MHCLG. It is a long-standing issue. When you set up a mayor, they have 10 people. How are they supposed to do a complex appraisal or what-have-you? I know MHCLG is highly alive to that and has been thinking about that. The answer lies in two forms. The first is about what direct support it can give to capacity building in that institution. The second is the kind of approach that has been taken on the Ox-Cam arc. That is not all on two particular nodes. Government can work with local government, mayors and others, and look at the whole picture together. I do not know the details of the capacity building that they are down to do, but I know that is very much in MHCLG’s purview.

We talk about mayoralties and the way that we are interacting with those, but we do not have those in Scotland, where I am from. Can I get an assurance that the changes in the Green Book are not predicated on the way that we deal with things in England? You have differences in devolution. I am the one on this Committee who is always banging on about devolution and the need to ensure we are respecting and understanding the processes in all four corners of the nation. This is also about the change process. My city region deal is a 10-year project. When you have to make a change, the Green Book process to make the change can sometimes compound the problem that you are trying to solve. Often, you are making the change because inflation and other pressures are making the project unaffordable. The time that it takes to do the change can compound that problem, if it takes 18 months to change it. Those are my two points, one on devolution and one on the change process.

On devolution, we have not done this just to fit the England constructs. Place-based business cases should be able to operate in different parts of the United Kingdom and within the devolved nations, both from a devolved nation perspective and in particular local areas of devolved nations. It is a very fair challenge and we should keep asking ourselves this. It is a United Kingdom process. In relation to the changes, sometimes programmes need to be adjusted because they have become more expensive or something has changed. This comes back to how we make the Green Book more user-friendly and easier to navigate, and help decision makers understand what further analysis is required to enable you to make a decision about that particular change rather than feeling like you have to do the whole process again. That is about the simplification of the Green Book, being clear about how it should be used and when it should be used, and the continuing skills and confidence of those who are using it.

If I can put your mind at ease, the kinds of areas that you are talking about in place basing are devolved. It will be transport, housing or skills. There is not a world where the Treasury comes in and says, “Scottish Government, you didn’t follow paragraph 62, so you can’t do that.” The decision making is for the Scottish Government. There are areas that are not devolved in the UK, which would be different.

I am not sure whether Chris will be pleased or not about that answer, but there we are.

The best way into this is that the missions approach to Government is helpful for all of this agenda because, by definition, the five missions that Government have look for a clarity of objective—defined as growth, clean energy, health, education and safe streets—and a joined-up approach. In the various structures, from ministerial cabinet committees to the boards that are set up and the official versions of that, a number of Departments are around the table. The one I am closest to is about how we can enhance growth. This is all to the good. The infrastructure strategy does set out by mission how it expects to benefit those missions. You are prioritising your objectives and what have you. When it comes to the exact arrangements for governance, you will have to bespoke them for the mega projects. The Oxford-Cambridge arc that I talked about is a really good example, asking Lord Vallance to chair it and the Ministers who do that. I might be wrong, but that is a particular arrangement for a project that works rather than part of an ongoing growth board that looks at other things. It is sensible both in setting the objective and in that joined-up approach to governance. Particularly for the very large projects, you will still want to specify the particular bodies. David was very much involved in the Olympics. You had a particular body that did the delivery side of the Olympics. We would like to replicate that for the very large projects. For the smaller projects, yes, the other side of looking at these missions is the whole delivery side of things. You are looking at how all of that is going. On growth, you would expect the Chancellor and others to be pushing to see how the things that have been announced are being delivered.

This Committee has looked at this quite a bit. There are accounting officer structures and things. There is a variance of answers. On the particular issue of accounting officers, in “Managing Public Money” we have published six different models of how to make sure you are not just going down one stream of one Department. The real answer lies in setting up governance that has all the people around the table so that, going back to my example, you are not just looking at Oxford and Cambridge as a transport project. It is not perfect. It is not really a major project per se, but, if I think about the kinds of things that you would look at—we face these quite often in looking at cross-cutting government issues—the more that mainly other Departments can do on prevention, be it alcohol or drugs, the better it is for the health service. We try to set up the institutions that look at that and work them through the spending reviews when we have them. That very much is what the missions boards are about. Health would be a good example. The other one would be safer streets. It is not just the Home Office that can, in and of itself, through the police, deliver safer streets. Those boards spend a lot of time looking at what each Department does and whatever.

The five missions that the Government have set up have very clear governance structures that they are pursuing. That is not ad hoc. If you set up particularly a massive project, it will necessarily be bespoke. You might want it to have its own governance structure rather than saying that it should be item 4 on an existing bit of structure.

For the missions, they all sit down very regularly and talk about those things. That covers the vast majority of what the Government are trying to achieve. Indeed, it is a prioritising mechanism. If you are not in those missions, you do not stop doing it, but they do it. There is a role for a number of bits of Government to do that. There is a role, certainly, for the Treasury. We try to look at things cross-cuttingly in the spending review—I do not know whether you want to say anything about that, Nick—and in how we set up projects and appraisals. We are trying to look at the benefits across that, hence the changes to the Green Book. There is also a role particularly for CDL and the Cabinet Office to look across the piece. I am happy to explore any of those.

I am going to take a break in a second, but I just want to ask Jon and David this question. On HS2 and Euston, I am concerned that Euston does not get just lumped in with HS2. It is really complex. It could potentially give huge regeneration benefits to that part of London, which desperately needs it. What sort of governance structures or other structures will you implement to make sure that we do get really good governance for Euston? It is predicated on £6 billion coming in from the private sector, which is probably undeliverable. There are big problems with Euston. I would like to be assured that it will not be lumped in with HS2 as a whole.

I am happy to start. The intention is not that Euston is going to be part of HS2. It is going to have a separate governance arrangement around it. There is the potential for it to become a mega project. That decision will not be taken today but over the next few months as the options further progress. The intention is that it will be separate. There is very close integration because of the links with Old Oak Common, the tunnels and all the other things that are reliant on each other, but it is totally separate.

As Jon said, the HS2 organisation now and the project structure is all around delivering phase 1. The work in the Department for Transport is looking at delivery models, governance and all that for Euston as a large and complicated project in its own right. As Jon said, it may be big enough and complicated enough to be treated as a mega project. That is work in progress, but it is not going to get taken into the existing HS2 governance structure. That is clear. The focus of that is on delivering phase 1. On the funding, as you say, that is part of the work that is going on around what is publicly funded. There is the existing station works, the new parts of the station for HS2 and the wider regeneration. James mentioned the Olympics. There are some parallels with the development corporation and the delivery models that we had for the wider regeneration of Stratford on the back of the Olympics. It is not just about putting it into HS2 phase 1 delivery.

You are absolutely right. It is incredibly complicated. You have the HS2 station; you have the need to redevelop the existing Network Rail station; you have the tube station on the site as well; and you have broader property development around all that. You want to make best value from the opportunity that these new transport developments produce. The short answer is that at the moment there are lots of people thinking about the best governance around it and how to bring in not just HS2 but Network Rail, TfL, GLA, MHCLG and the many different parties involved. There is a need for governance around the HS2 station and wider governance around the site as a whole. I think it will end up with a solution that is probably not a million miles away from Oxford-Cambridge, where you bring different parties together, but that work is still ongoing.

DfT has said there is a separate delivery company for HS2.

There is a delivery company for the Euston HS2 station, which DfT is working on. There are people who are also thinking about the broader governance for the site as a whole.

I brought it in because it sort of aligns with Sarah’s question on co-operation in different parts of big projects. Funnily enough, it is interesting that you should say it could become a mega project. As I was thinking about this and reading up this morning, I wondered whether it was getting sufficiently big and complicated to warrant that. That was an interesting reply. Jon, you are going to be in the firing line next because we want to examine quite in some detail your role and the role of NISTA. Sitting suspended. On resuming—

I want to turn to ask you about the National Infrastructure and Service Transformation Authority, or NISTA, as we have been referring to it. I know we have referred to it earlier on, but, just to give a very clear statement here, how is NISTA going to improve the delivery of Government’s major projects?

It will do that in a few ways. Bringing together the National Infrastructure Commission and the Infrastructure and Projects Authority as part of Treasury means NISTA is greater than the sum of its parts. One of the important things is to recognise it has a much broader remit in terms of sectors. Previously, the NIC was focused very much on economic infrastructure and utilities, whereas the Infrastructure and Projects Authority looked across defence transformation projects as well as social projects. We now have strategy, delivery, the decision making and the money side all in one place, which is a much easier process to follow. NISTA has been set up to look initially at six interim or initial objectives. One is to overcome barriers to delivery. Again, bringing the various parts together is going to enable us not only to intervene and support individual projects but to help develop and further the system. The 10-year infrastructure strategy is a very good and early example of that. That has managed to be published just a few weeks after the formation of NISTA. NISTA is also tasked with enhancing and simplifying assurance. We have already talked a little bit about how we are going to change the assurance process for mega projects and reinforce it for other major projects that remain on the Government’s major projects portfolio. As I have mentioned, we are the head of function and profession for project delivery. That gives us a broad reach. We have an objective around publishing the pipeline, which is due to be published in a few weeks’ time. We also have spatial planning. The one thing that has not been mentioned today is the area of expertise for private finance and PPP models going forward.

You have talked about bringing everything together, but what new powers and authority will NISTA have to drive improvements? How will you ensure that you are not just moving things into a central pot but you are getting the additional powers that you need to do things?

One noticeable change has been direct access to Ministers. The advice that we are giving is joined up and it is being given directly by a number of my colleagues directly to Ministers. We have worked very closely with the Chief Secretary and the Treasury team on the 10-year infrastructure strategy and the pipeline. A number of our experts were involved in the spending review and were giving advice directly to the relevant Ministers. Treasury/NISTA will have a more powerful voice on mega projects. We will have the potential for a position on the boards prior to the final business case, as well as in delivery. We already have representation on the HS2 board, through David, and the Sizewell C board, through me. Those are two early examples.

I want to talk about resources. How are you going to ensure that NISTA has the necessary resources and capacity to deliver its scope?

It is a very good question. It is very early days. The list of expectations on NISTA is very long, but we have those six initial objectives and we are confident we can resource those. Through our role as head of function, we also have access to the 18,000 other professionals that exist across Government. The reach is much broader than just the 200 or so people in NISTA.

Given where you are in the creation of NISTA, what is the confidence that you are expressing based on?

Some of that is based on the planning that has been done. NISTA is not a new idea. It was announced in manifesto before the election last year. The concept was known and understood. Since the result of the election, there has been a working party for developing the role of NISTA and what it should look like. It is still at a relatively early stage. Next month we will have a facilitated workshop to get under the skin of how we operate collectively together.

I am now the Permanent Secretary of NISTA too, although it has joint reporting into the Cabinet Office. The Treasury has about 2,000 people. NISTA has over 200. It is quite a substantial increase in the Treasury’s size. These people existed in other places, but they have come together in NISTA. I envisage some efficiency in bringing the organisations together. We want NISTA to be focused and agile. I am confident we have the resources we need to do a really great job.

Permanent Secretary, just to clarify what you have just said, will all the members, including Jon, be Treasury employees? They will be TUPE‑ed over from where they were before.

Yes. We are in the process of doing that.

The NIC was an independent body sitting outside of Government and the IPA was part of Cabinet Office with a dotted line into Treasury. I genuinely believe that the power is better being inside because that advice is joined up and it is going directly into the decision makers. Under the previous regime, the advice was not necessarily always aligned. Here, it is bringing the strategy, the delivery and the financial controls into one place.

We are retaining the expert advisory council that the NIC had. Sir John Armitt as the chair and the expert councillors are also transferring across. The slight change in their role is that now their advice goes directly into the CEO of NISTA and the Chief Secretary. There is still a very strong voice from industry experts. Certainly, many NIC and IPA staff have come with very long CVs from the commercial world.

It is a direct channel in. It is very early days, but it is proving quite fruitful. Again, hopefully the 10-year infrastructure strategy is a good example.

There are a few more probing questions from me as to how HMT and NISTA are going to work together. How will you strengthen the gateway and business case process to give better assurance about project affordability and value for money at the outset? David was on about assurance earlier on. I might also ask about not only the outset but during the course of a big project or a mega project, where the assurances might change.

We now have a distinction between mega projects and major projects. We have a new governance arrangement with the new decision-making panel. We have a single point of decision-making panel for those mega projects. That will be informed by independent assurance. It is very early days. None of those panels has yet sat. That work still has to be developed.

It is very important at the start of a project, but you have already corrected me on the need to change sometimes as the project goes along, particularly in a mega project such as HS2, as we have discussed. How will you manage that process? You are the people who are going to have to manage the whole project.

We are not delivering the projects, but we will be taking on board the Office for Value for Money recommendations. When there are significant changes planned or suggested certainly on the mega projects, that will be reported and placed before Parliament as part of the delivery plan.

The responsibility that we talked about in our report around assurance is about making sure it is suitably independent and qualified and that decision makers can rely on it. You are really looking to the SRO of that project to take ownership of ensuring that appropriate assurance is in place. NISTA has the important role that Jon has been describing in supporting that, but the starting point for both the NAO work on mega projects and what we have said about how those changes are put into effect is that they are all unique. To state the obvious, there are enormous differences between HS2, Sizewell and Dreadnought, the three that we mentioned earlier. They are very different endeavours. The assurance has to be tailored to the type of project it is and the stage it is at, as you are saying. It is the SRO who is in place who needs to make sure that is happening and that it evolves as the project evolves, but NISTA has a really important role in supporting that, in good practice and in enabling it to happen.

David, one of the advantages of this Committee is that we see projects all the way through and we see a lot of projects. One of the problems with Crossrail/Elizabeth line was—I referred to this earlier—that the civils part of the project stayed there too long and they were not preparing for all the systems integration. How will you ensure or how will the system ensure—this might be your bag, Jon—that the project moves and the planning moves ahead of what is really necessary on the ground?

NISTA has the really important role. The Office for Value for Money is short term and time-limited. We have introduced these changes, but it is NISTA working with SROs. The changes that have been agreed require projects to put in tailored governance, assurance and regular reporting—we have talked about updates—back into the centre of Government on governance and assurance arrangements, specifically that they evolve as the project progresses. It is an obligation on projects as they go forward.

The Treasury person on the board will be important in that context.

Yes, that is right.

In practice, that will often be NISTA.

Yes, Treasury has a lever inside. That is right.

There is the intention to produce and publish the strategy and delivery plans for mega projects and to publish the business cases for major projects. A lot of this information will become far more public and far more visible. As NISTA, we have a role in getting to those approval points and stage gates to ensure those projects are right and are mature for the stage gate that they are going into.

Jon, another thing that worries me is whether the introduction of the concept of mega projects will take away from the proper supervision of major projects. All the problems that we have discussed this morning apply to the major projects, maybe less, but they still apply. How will your organisation have the bandwidth to be able to keep across all these major projects?

That is a role that we have had previously. There are over 200 projects on the Government’s major projects portfolio. We tier those. We prioritise and we review that prioritisation quarterly. We change and move our resources around, depending on the needs of the particular projects. One of the advantages of NISTA is going to be our ability to impact the system. Yes, we can impact on individual projects—a lot of the focus may be on some of the larger projects—but quite often the broader challenges are in the system. How are we addressing our school-building programme? How does that link to our hospital-building programme and our prisons? They are using the same designers and the same supply chain. There are efficiencies and issues that can be unlocked by having a social infrastructure roadmap, for example.

As a point of clarification, within Government spending on infrastructure we are going to get more and more spend on IT projects. Does NISTA have a role in this? It is a very different way of procuring by Government; procuring a physical project, which is what we have been talking about more or less all morning, is very different from procuring an IT project.

It is. Again, via the team in the Infrastructure and Projects Authority that has come across, NISTA does have an experienced team in transformation and digital projects as well. We are also investing. We have invested in a data scientist team within NISTA that is looking at the adoption of AI into project delivery. We have some good early examples of how we are introducing that.

I am really concerned that Government as a whole are not working fast enough on their IT infrastructure to be able to accommodate AI, which itself is moving very, very quickly. Will you be working very closely with DESNZ, which is the Department leading on this?

DSIT.

Sorry?

You said DESNZ.

Thank you, Permanent Secretary. We all need a bit of correction every now and again. Okay, how will you be working with DSIT?

Again, if projects fit the Government major projects portfolio criteria, then they will come on, regardless of whether it is a defence, infrastructure or technology programme. They will get the relevant support that the tiering requires. There is a broader piece of activity for NISTA to do around the introduction of AI and technology in project delivery, and how we can use those tools to improve delivery going forward.

Thank you. I am sure this committee will want to return to that before too long.

Do you want to hear a bit more about this? DSIT has quite a major role to play in and of itself, not just being the recipient.

Either you or Nick, I do not mind, but this is so important. I am not sure that I have yet heard that Government are working at sufficient pace on this.

I will just say a little bit. This was a major theme through the spending review, very much driven by the Chief Secretary, to try to improve digital spending. We invested about £1.9 billion in total over the spending review period in improving the digital centre of Government across both RDEL and CDEL. There was really close working between the digital spending team in my part of the Treasury, the Government Digital Service in DSIT, and the Cabinet Office, to do a couple of things. It is to make sure, first, that we are addressing some of our legacy IT risks; secondly, that we are investing in those IT, digital and technology programmes that will deliver significant savings over the spending review period; and, thirdly, that we are investing in those programmes that will significantly improve the way in which Government are interacting with the citizen. It is particularly trying to make our interactions easier. That is being overseen by the digital IMG, the Chief Secretary, CDL and the DSIT Secretary of State lead to really drive oversight of delivery of that work through the spending review. Actually, this is a really good example of where having NISTA as part of the Treasury could be really beneficial in terms of looking at how we are delivering that, because the Chief Secretary then has one set of people in his organisation who are focused on supporting him and driving delivery of a key priority for Government. Looking at it from my perspective on how much money we are spending, and making sure we are getting good benefit realisation for that money, from a NISTA perspective that money is being used effectively and we are delivering it effectively. It is also bringing together the financial information I will get through my spending team about, “Are we spending the money we are expected to spend as quickly as we are expecting to spend it, and delivering the things we are getting?” alongside the insight that NISTA brings about, ”Are they delivering the programme outcomes? Are they working with the market effectively to make sure we are leveraging that as effectively as possible to secure best value, and also to make sure we are delivering progress?” Having that in one organisation is potentially very powerful in enabling the Chief Secretary to provide that ministerial leadership to drive delivery.

The idea that anyone in the public or private sector could deeply, clearly tell you they know exactly their path over the next 10 years, with technology that is changing all the time, is wrong. You are absolutely right to say that we should all be very focused on this.

The other thing is that we had a briefing from DWP about a particular matter yesterday. It was talking about the lack of communication in electronic systems between it and, say, the Department for Health. It is not only the work in the individual Departments that needs to be done; it needs to be IT compatibility across Departments.

That is something that the IMG is trying to drive, particularly through DSIT, so that we have common systems that are able to talk to each other, and that we have the right data sharing. Fraud is a really good example of where data sharing between Departments helps us better identify fraud.

Thank you very much. That is very helpful.

Mr Loveday, we have done inquiries on infrastructure before in this committee and in the past. We have been speaking to the Infrastructure and Projects Authority about its data collection. I am interested in how that data collection can be used across different projects to aid the costing mechanism and to identify effective early warning indicators for project delivery. How will NISTA be using that and building on that work?

The intention is that NISTA will continue to publish updates and will continue to collect quarterly data on project performance. It is fair to say there is more work for us to do in terms of the standardisation of that data across projects and across Departments. We have recently published a data standard, but that is very much a minimum viable product. We do need to do some more work to really look further into project controls and to get a better set of indicators, because the data is there but it is just very difficult to get to. I could perhaps just give one example where we are really leading the way with using some AI technology and a tool called Scout. When our teams and independent teams go in to do assurance on a major project, they are normally faced with a huge amount of reading to do. We have now deployed an AI tool that can complement that reading and identify specific lines of inquiry and questions that the members should be focusing on through the week or two weeks they have to do the assurance review. It is the first of a number of innovations that we hope to bring.

I have just a little bit more about developing those project controls and standards. How long do you think it is going to take you before you have those in place?

I would need to come back to you, because we have not done that work yet. We have just produced a minimum viable product data standard. That gives us the basic information. We still have the information driven through the assurance reviews, which gives us a view annually, or at stage gates, on the performance of individual projects. What we do not have is the ability to look further than that on a monthly basis or as projects are evolving.

We had another committee hearing in May 2021. As a result of that, the Government major projects portfolio started publishing summary business cases following final approval and evaluations. What difference do you think publishing that those business cases and evaluations can make to project governance that is overseen by NISTA?

It goes some way. It demonstrates a level of accountability and visibility of what the intention is. Now the world has moved on, the more important documents are the 10-year infrastructure strategy and the pipeline, and those will become far more relevant as the annual NISTA updates on the performance against the 10-year infrastructure strategy.

I appreciate we have the infrastructure strategy and we have the 10-year pipeline. I suppose this is my question. When we have evaluated in the past why previous infrastructure strategies or approaches have not worked, and we have come up as a committee with recommendations, are you saying that you do not think that some of that evaluation from the past is going to be useful in terms of guiding your work in NISTA? Now we have the strategy, is that all we need?

It is not all we need. The lessons learned and the evaluation is incredibly helpful. Again, we have had the recent James Stewart review that has been incredibly insightful. That has brought 90 recommendations, which are currently being adopted. There is lots of work to do in this space, but what we have is a little bit of a reset with the 10-year infrastructure strategy. We are looking forward and basing a lot of our work off that.

Just to be clear, alongside the spending review we published guidance for Departments on how they need to publish their business cases. We did set an expectation that all business cases are published four months after they have received their final sign-off. We are taking that recommendation really seriously. We think that is an important part of improving transparency, as I said earlier. We are able to set out the parameters and expectations on which a programme is being delivered, which is an important part of improving transparency and accountability for Government. That is definitely being taken forward. In terms of evaluation, we are also making sure that all major programmes have an evaluation strategy that is being overseen by the evaluation taskforce in the Cabinet Office. This is about making sure that we evaluate whether the programmes are going to have the impact that they said they were going to have, which is more focused on the outcomes that the programme is supposed to deliver, rather than the actual delivery of the programme itself. Another important recommendation you made was about the evaluation registry that we wanted to set up, which we have now done. That is another important part of us being more transparent about the information we have on the impact that investments on projects and programmes are having, and whether they are delivering their outcomes. We have taken all those recommendations on board.

I am really pleased to hear that you are taking this business case process seriously, because it is something this Committee has been pressing on for a long time.

Jon, can I just pick up and develop your point on AI for a minute? AI is obviously very exciting and is a major project in itself for Government going forward, but where we are in the development of AI needs a degree of enthusiasm, balanced with a degree of cynicism, just to make sure that it is developing the way it should. I am curious as to how you are approaching AI in NISTA with that curiosity and that cynicism that is necessary at this point in the AI journey.

Yes, it is very early days. The example I gave around the Scout tool is a good one, but it is very, very new. We are working on a number of major projects that are introducing AI into design, into looking at scheduling, and into looking at potential areas of risk. One of the roles of NISTA going forward is to convene a lot of this experimentation and research that is going on across the industry. We are hosting a number of small events for cross-government teams to look at some of the tools that are being developed at the moment. It is too early to say we have a clear strategy for AI in project delivery, because it is an emerging technology.

AI will reduce the need for certain resources, but there is a need for a resource to evaluate and use the AI, to check that it is interacting with the Departments properly. Do you have the resource to do that? At the stage you are at with NISTA, it is an exciting time to be looking at AI and also evaluating it. You are going to be useful for that.

It is too early for us to say. It is a broader role for DSIT, I would say, in that space.

I might come in just to help. AI can, should and will be transformative. The danger does not come from that alone, but if people just say the words “AI” and assert that that delivers major change and major efficiency. The obvious question would be: how? It is probably worth highlighting some work that the Office for Value for Money has done on efficiency, which is not particularly a major project issue, but Departments have set what they expect to deliver on efficiency through the spending review. Almost all of them, rightly, have pointed to digital and AI transformation. To your point, it will be as much for the Treasury’s core function spending teams, et al, to be working with Departments, with the help of the likes of DSIT, on how to deliver some of the points you are making. NISTA will obviously have a particular focus on major project delivery with AI.

What we have done on that—which hopefully goes to this question—is that, with the spending review, there was a supplementary document publishing all the Departments’ plans of how they will deliver their efficiencies, a big part of which, as James said, is about digital and AI opportunities. We worked with them to see that they had real plans of how they were going to do it, not just aspirations and ideas, and that those are grounded in delivery plans, resources and recognition of how they will actually be delivered. As has been said, DSIT is key in supporting that across Government.

I am sorry to prolong this section of the hearing, and I brought it in, but it is just so important. Of course, you cannot operate AI unless you have the correct infrastructure to do it. I just wonder, Permanent Secretary, whether you would encourage DSIT to have a catalogue, if you like, of every single Department’s legacy equipment, so that you know where you need to concentrate your resources to actually upgrade the equipment so that it can be AI-enabled. What if you have old equipment or analogue equipment? The Department of Health apparently even has fax machines still working. This level of equipment is not compatible with AI. If AI is moving at such a pace and we do not have the right equipment, it comes back to planning and sequencing properly, does it not?

Nick talked about legacy IT, which we are only too aware of, and the step forward the spending review delivers in that. In fairness to DSIT, the very existence of DSIT sits almost as a central Department to push through these things in the public sector and, indeed, in the wider economy. Different parts of the Treasury are very enthusiastic about both of those things. It is doing quite a lot on this. It is horses for courses. DWP has a massive IT thing, and this is about the extent to which it can help its customers. For the Treasury, which is more of a policy than an operational Department, it is about how all of my colleagues can spend most of their time on the most value‑added issues. Both of those can happen. By the way, if we want to throw in another one, IT used to be capital spending mainly—you bought kit and you bought hardware—and now it is more resource spending and software. I am exposing my knowledge here. There are changes all over the place.

Can I just throw in another one? This whole matter is being given added urgency because legacy equipment is much more liable to cyber-attacks.

I totally agree. Obviously the watchword with cyber is “when, not if”. Obviously, we have our National Cyber Security Centre, which is not a panacea, but is also very, very helpful. I totally agree.

When we started the work, we were building on the work the NAO had done and published last year. We developed that and took it forward. There is a distinction. It is a combination of things; it is not just one thing. We were trying to capture strategic importance. We talked earlier about how these things tend to be impactful across Government, or across the economy and society. There are cross-cutting impacts. Some of it is about length of time to deliver. If they are going to take more than one Parliament that creates its own challenges. Cost is clearly an important factor. We used a fairly arbitrary threshold, but £10 billion narrows down the population quite a lot as a whole-life cost. One of the distinguishing features that we used, which we might want to come back to, is that they are not scalable. They are single projects with all those features: strategically important, long term, and highly expensive. Where something is scalable—so it has lots of small, individual projects—there is more choice over time of, “Keep doing all those,” whereas with the projects we are talking about you cannot do part. You either do all of it or you do not. That informed a lot of our thinking, because it meant that, once you have decided to do it, you have to do the whole thing. The benefit for Government is in getting it done as quickly and efficiently as possible, because, if it gets delayed, you have no choice; you keep going, but it just costs more. You cannot break it into parts. Not being scalable is quite an important part of the definition, if that helps.

What we have tried to do is get at the factors that Government can control, which are about the governance and the funding. Again, having been involved in some of these things over a long time, they are inherently difficult and complex. What we have said is not a silver bullet that is going to make them all suddenly go swimmingly well and deliver very precisely to original time and cost. We are trying to get at some of the obstacles that have been in the way that have made a hard task even harder. It is about addressing the complexity of governance, approval and decision making, which we have talked about. It is about addressing some of the funding issues that arise, and value for money issues that arise. If we just fund them on an annual basis, like the rest of Government is funded, that can create its own problems for a very long-term, very large‑scale endeavour. We talked earlier about the strategy and delivery plans. Putting all that in the public domain at the start, managing expectations and reflecting a cross-government view about what we want to achieve, how it is going to be delivered and how it is going to progress through those development stages really helps with addressing those risks of starting too early that we talked about earlier. It is dealing with some specific obstacles, trying to knock out things that can get in the way, and letting the teams who have been put in place to deliver them have the best chance of success.

Can I thank our witnesses today very, very much? It has been an absolutely fascinating session. What we have from today’s hearing is a suite of architects’ plans. Now we have the plans, what will be really interesting is to see how you use them. I have no doubt we will ask you to come back in an appropriate time to tell us how you are getting on with all of that. Thank you very much indeed. An uncorrected transcript of this hearing will be published on the Committee’s website in the coming days. The Committee will carefully consider the very large amount of evidence that you have given us today, for which we are very grateful. We will, of course, produce a report, probably with recommendations, in due course.