The NAO published its latest report on Crossrail on 9 July. The report highlights a number of positives: Crossrail Ltd and the sponsors are controlling costs and improving performance. The project is now hitting 90 per cent of the (revised) milestones.
However, the Benefits section (Section 4) makes interesting reading. Return on investment has been revised from £1.97 to £1.37 (for every £1 spent). The 2021 report highlights two further things about benefits management: 1) More clarity is needed around how the benefits are going to be realised; and 2) changes to working life as a result of Covid-19 and lockdown could remove the benefits originally forecast.
Will no major projects make the cut?
The return ratio is based on a 60 years’ recovery plan. If we insist that return periods should only be for the foreseeable future, will no major projects ever be viable?
Perhaps project leadership and the sponsors simply haven’t engaged with stakeholders to discover what the benefits are and worked out how much they add up to.
For example, four for-profit organisations have contributed towards the cost: Heathrow Airport Ltd, City of London Corporation, Berkeley Homes, and Canary Wharf Group. Each will know what rate of return they are expecting from their contribution, and what other investments – changes – they have had to plan and make, and at what cost, to their own businesses in order to optimise the benefits and return on their investment.
Below are three steps to achieve benefits:
1. Planning benefits from infrastructure
As well as the four for-profit organisations, many hundreds or even thousands of others also stand to benefit, including landowners, employers, services and leisure facility operators and transport hubs.
What is expected in the way of benefits, and sharing their plans with others, will help others to estimate the benefits to themselves. It needn’t even cost very much to share this, but it could highlight a lot of the potential benefits from such a high-profile project.
The NAO 2021 report says that some London boroughs are planning to make optimum use of the new stations and new routes from existing stations.
Is Crossrail facilitating the sharing of these plans? Have the London boroughs calculated how much the benefit is worth? Over what period? There might be five times or even 10 times the benefits so far identified.
2. Realising benefits from infrastructure
Benefits don’t happen by themselves. Dis-benefits do, in the same way that risks often turn to issues if they aren’t managed. But for the £18.9bn cost of the Crossrail project, the benefits won’t be realised without some planning and some work to ensure they are realised.
The four for-profit organisations that are putting their own money in won’t be leaving benefits realisation to chance. They have made plans to change their operations to take advantage of the new transport and passenger flows. This is in addition to the construction of new stations that they are building.
Other organisations may not have the awareness or skills in their leadership teams to conceive of the plans and changes needed. But a rising tide floats many boats, and it may be to the advantage of the most astute organisations to help their neighbours to improve the quality of the neighbourhoods too – there’s a lot that the astute organisations may be more than happy to share.
With the focus on planning to realise benefits, the returns may be many times what would be achieved through failure to plan.
3. Counting the benefits realised
If benefits are going to be realised across numerous different organisations, how will the Department for Transport and Transport for London ever be able to show that benefits were realised?
This is a logical third step in the process of benefits planning for major infrastructure.
As well as seeking engagement from stakeholders, and providing an environment for sharing (which will both enable stakeholders to understand the benefits to themselves, and understand what they should do to realise those benefits), what’s needed is a platform for reporting the benefits realised.
Surely this is additional work for no return? But people (and organisations) are motivated to do a good job. In supplier tenders for government responses, suppliers develop and implement detailed social value responses, even where the response will gain them zero points at evaluation.
Help to realise wider benefits
The work on Crossrail is largely finished. It is unlikely that there will be substantial changes to the technical operations of the line, and the route has already been built.
NAO 2021 reports that more needs to be done to plan for and deliver the wider benefits. Which means there is still work to do on the project to:
- understand its stakeholders;
- help more of them to understand the likely benefits to themselves;
- support them to plan benefits and plan to realise the benefits;
- understand what that means in any late-stage changes in Crossrail delivery, such as planned timetable changes instead of waiting for a request; or different passenger flows at stations;
- record and report the planned benefits, and report realisation of those benefits, which drives continued work on realising the benefits.
You may also be interested in
- The Benefits and Value Specific Interest Group
- A guide to using a benefits management framework
- Learning more about benefits management on APM Learning (🔒)