The Scottish Government and the Parliament should be given better information before the key decisions are made about whether major public construction projects should go ahead, according to Audit Scotland.
Their report published today, Review of major capital projects in Scotland, is the first systematic review of major public sector capital projects in Scotland. The Scottish Government is currently spending about £4.7bn, or about £1,000 per person in Scotland, on projects such as roads, railways, prisons and hospitals, a figure that is to rise to £10.5bn over the next three years.
The report says that those involved in decision making must be able to properly scrutinise and challenge proposals for major projects. This means clearer and more accurate information about costs, value for money and timescales.
Robert Black, Auditor General for Scotland, said: “Current and planned major capital works in Scotland make up a large programme by any standards, and it requires the Scottish Government to make very important choices about which projects should go ahead. Good decisions can only be made if there is accurate and robust information about the likely costs, benefits and timescales of projects.”
Audit Scotland has found that only around two-fifths of projects were completed within the costs which were being estimated when the projects were approved. But at the stage when contracts for work are awarded, information about costs and timescales was more accurate.
Black added: “It is good news that projects mostly come in close to the costs and deadlines that are set when contracts are being awarded. But there needs to be improvement in the information that is available at the earlier stage when important choices are being made about which projects should be committed.”
The report says a more strategic approach to managing the programme of capital projects could improve value for money and more should be done to assess and show the benefits to the public, and recommends the Scottish Government should report in public on the performance of projects, particularly any reasons for changes to costs and timing and what lessons can be learned from completed projects.
The Cabinet Secretary for Finance and Sustainable Growth John Swinney said that the report vindicates the Government's decision to establish the Scottish Futures Trust (SFT).
He said: “The Audit Scotland report highlights the importance of efficient and effective planning of our capital investment programme of some £35 billion over the next 10 years. The Government believes that this is essential, which is why we are establishing the SFT.
“The need to co-ordinate our capital investment more strategically was at the heart of our drive to set up the SFT.
“We already know from the work done on the SFT business case that a new organisation with a remit across the public sector can support the delivery of the vital infrastructure we need at better value for taxpayers. Today's report shows that to be the case and when the Futures Trust company is set up this summer it will begin delivering exactly that - releasing up to £150 million a year for increased investment.
“The SFT will enable greater partnership, improved preparation and handling of projects, and better value finance - an approach that Audit Scotland's report endorses. Where private finance is involved all of this will be achieved while stripping out the excessive profits of the outdated and discredited PFI and replacing it with the non-profit distributing model.
“The Audit Scotland report is based on a timely review of projects started under the previous administration. We welcome the useful contribution it makes to the important issue of the planning and delivery of infrastructure investment and we will study it closely.”
Commenting on the report, Alex Johnstone MSP, the Conservative Shadow Minister for Transport, said: “These depressing figures vindicate the warnings we continually made during the latter years of the Lib-Lab Executive about a lack of clear prioritisation of major transport projects. Too many projects were granted for political reasons, leading to over stretch and thus an overrun on both cost and schedule times.
“The current SNP Government cannot sit back and relax in the face of the numerous errors made by Labour and the Lib Dems – it must issue a priority list as a matter of urgency, to avoid falling in the same trap as the last administration
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