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HS2 is going ahead – here are the lessons it needs to learn

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After much debate, the decision has been made for the UK’s second high-speed rail network, HS2, to go ahead. While politicians remain split as to whether the project should proceed or not, the government is following the recommendations of Oakervee review into the project, which concludes that HS2 should go ahead, albeit with a rehashed governance structure, adjusted budget and delivery date.

“I believe the recommendations help offer it a way forward, a means of increasing scrutiny and oversight, protecting the interests of passengers and taxpayers, and rebuilding confidence in an important piece of critical national infrastructure which will do much to rebalance the economy,” said Douglas Oakervee, chair of the review.

Large projects such as HS2 are hugely difficult to manage effectively, requiring careful planning at its early phases, solid governance, and detailed risk management. Here are some of the main takeaways.

More time for early-stage planning

The biggest problems with infrastructure projects arise from the conflict between the need to genuinely make improvements that will benefit the economy – which requires long term thinking – and politics, with members of parliament having half an eye on the next election. It means that the crucial early stages are often rushed. For example, Graham Atkins et al. wrote in What’s Wrong With Infrastructure Decision Making: “This ‘front-end’ decision making typically involves less than one-third of the total time spent on project development. However, it has a disproportionate impact on outcomes, as most early ‘shaping decisions’ occur during this phase.”

Better benchmarking

In assessing cost estimates for HS2, the Oakervee review recommends that HS2 Ltd and the Department for Transport (DfT) need to deploy benchmarking more consistently. “The DfT, with the support of the IPA, should build on the useful multi-project benchmark which the DfT has developed. Any benchmarking should be UK-specific where relevant, but look to include and learn from international examples as well. As part of this benchmarking work, there is a need to monitor prices on the market to check that cost estimates align with current market prices.”

A governance structure that outlasts its project managers

One of the areas highlighted by the Oakervee review is that of accountability. With HS2 originally kicking off in 2009, it will be almost 30 years from the start of the project to its completion. No single project manager is likely to stay on for the entirety of that project, so the governance must be robust enough to remain stable as personnel changes. Governance could be strengthened by applying milestones to the project to improve accountability over its lifespan. The management team would then be targeted to meet that milestone during their period in office, rather than aiming for a completion date they will likely not be around to meet.

Detailed risk analysis must reach the top

Ministers and senior civil servants often do not understand project risk. Risk is difficult to quantify on large infrastructure projects due to the complexity of the variables involved, but it often arrives to senior decision-makers in simplified form. As a result, the risk is not accurately communicated. “Failure to understand risk will inevitably lead to failure to communicate risk,” writes Atkins et al. “In the political sphere, poor communication restricts the ability of Parliament and the public to scrutinise government’s decisions and can intensify other decision-making problems.”

Clear accountability for systems integration

One lesson learned from Crossrail is that it is crucial to have a single point of accountability for systems integration. More time and consideration should be put into the systems and how they will integrate at the outset of large, complex projects. The DfT’s Lessons from Transport on the Sponsorship of Major Projects reinforces this message: “Sponsors should ensure that the delivery organisation has established a single organisation with clear accountability for managing systems integration, that it has sufficient capability and capacity in relation to the complexity of the challenge, and that it is empowered to direct suppliers in relation to integration decisions.”

Benefits-led decision making

Benefits should be at the front of the project team’s mind when making decisions on potential issues. In the case of any potential delays, cost increases or scope chances, the impacts on project benefits should be assessed first and foremost. Wider benefits are less tangible or aren’t under direct control of the project. More communication between other departments will be necessary to fully realise all of the benefits.

Improve behaviours

The DfT’s report cites managing behaviours over processes as one of the biggest reasons why large projects fail. More joined-up thinking and communication between the management team can make a world of difference to the efficiency of the project. For example, people often have a vested interest in the project going ahead, so tend to skew towards the positive in delivery confidence assessments. It’s this tendency which often results in underestimates in the cost and time needed for delivery. More objective views need to be collated in order to assess projects more objectively.

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  1. Sarah Parris
    Sarah Parris 20 February 2020, 09:09 AM

    Totally agree with the need for more benefits led decisions. When I led the benefits mgt function on HS2 (2014-15) we were boxed in by DfT who all our output had to go to for approval, and they were not benefits experts. We were also silo'd internally so again all our output to other departments had to go up the chain before it was shared with other teams. IF they had the appetite. What we saw was also controlled in the other direction. So stronger governance does not I hope, mean more of this sort of behaviour!

  2. Andrew Wells
    Andrew Wells 21 February 2020, 11:49 AM

    The Oakervee report was a pretty good document given the constraints of the terms of reference and the timescale of reporting. I think the conclusions outlined above were well put but we need to understand the details of what is a massively complex project to see how they can be addressed. I think APM should look to develop these points with the assistance of the membership to provide a clear a decisive view.