Scrutiny of major capital projects is improving but difficult spending decisions ahead

An Audit Scotland report published today, Management of the Scottish Government’s capital investment programme, looks at how well the government is running its programme of capital projects. It also follows up a 2008 Audit Scotland report on major capital projects.

The report says the government has improved its scrutiny of its programme in recent years. However, improvements have been slow in the information about the status and performance of individual projects, which would help with management of the programme.

The report looks at the performance against planned time and cost of 55 projects completed between 2007 and 2010. Information about whether those projects were on time and within budget is not always available. Where information is available, it shows that cost estimating has improved in recent years. Many projects still run late, although delays tend to be at the early stages before contracts are signed and are less likely to affect costs.

Auditor General for Scotland Robert Black said:

“Major capital projects such as new hospitals, colleges, roads and railways make a difference to how people live their lives. With Scotland’s capital budget dropping by a third in coming years, there are difficult choices ahead about where and how to invest public money.

“The Scottish Government has improved its leadership and oversight of the capital investment programme in recent years. It now needs to set out a clear view for investment in future years, backed with good information about long-term needs, affordability and constraints. This would strengthen debate about spending decisions, priorities and planning.”

Planned capital investment will drop from £3.3 billion a year to £2.1 billion between 2010/11 and 2014/15 and is unlikely to return to current levels for at least another decade. The Scottish Government’s existing ten-year investment plan is less than three years old but may already be out of date due to the recent recession and subsequent budget reductions.