Drawing a line under the past?

The Assembly’s Public Accounts Committee published its first report today – on the “very significant overspend and late delivery” on the upgrade to the Belfast to Bangor railway line, was budgeted at £15million for completion by December 2001, final cost £34million in September 2002 – press release here – and the full report is here [Don’t they know how to use links from the index? – Ed]. But with the NI Audit Office report already in the public domain, 20th March this year – pdf file here – and the PAC recommendations focussing on future practice, the question now is does the PAC actually have any teeth?The extracted recommendations of the PAC

Recommendation 1
7. In future, where legitimate, evidence-based concerns regarding the accuracy of cost estimates are highlighted to senior management, the Committee recommends that the Department exerts a more robust challenge, insists on independent validation of key cost estimates, and does not accept unsupported assertions from Translink.

Recommendation 2
13. The Committee recommends that the C&AG review the implementation of the Gateway Review process in DRD and its sponsored bodies and report back to the Committee.

Recommendation 3
16. The Committee recommends that, in future, all economic appraisals clearly stipulate the timescale for undertaking the associated post project evaluation, that these are undertaken promptly and that this is centrally monitored and the results disseminated by the Department. The Committee requests that the Treasury Officer of Accounts reissues guidance on this matter.

Recommendation 4
22. The Committee recommends that the Department seeks further assurance that the new procedures introduced in Translink following the Currie and Brown report, are in place and operating effectively.

Recommendation 5
24. The Department should issue a copy of the Internal Audit Review report on the operation of its own new oversight controls to the Committee.

Recommendation 6
29. The Committee recommends that, where there are major capital overspends such as the Belfast-Bangor project, there is a need for greater budgetary transparency so that the public and elected representatives can more clearly identify from where the additional money is sourced, and what other projects are losing out as a consequence. The Committee further recommends that the Department of Finance and Personnel ensures that this is the case.

Recommendation 7
31. The Committee recommends that if there is no significant improvement in Translink’s and NITHCo’s performance the Department should undertake a fundamental review of the structures.

Recommendation 8
35. The Committee never wants to see a case again where a major contract is entered into without a proper contract variation procedure in operation. The Committee would like the Department of Finance and Personnel to ensure that public bodies are alert to this.

Recommendation 9
42. The Committee recommends that the Department of Finance and Personnel makes it clear throughout the public sector that in future situations where a public body is terminating the appointment of a consultant in this way, it ensures that full rights of redress are retained and does not succumb to the expediency of washing its hands of a problem rather than effectively dealing with the issue.

Recommendation 10
45. The Committee was told that Translink has improved its contract management and purchasing procedures. However, the Committee would like a specific explanation of how they propose to ensure that this kind of costly confusion cannot recur.

Recommendation 11
51. The Committee recommends that future Departmental representatives on Translink project boards are alert to any recurrence of additional works being added to the project after the economic appraisal and that the Department of Finance and Personnel revisits the investment appraisal guidelines to ensure that this is absolutely clear.

Recommendation 12
56. The Committee recommends that Translink establishes a formal action plan for this project with key milestones set to ensure that it is implemented without further delay and that progress is formally monitored and recorded at monthly review meetings with the Department.

Recommendation 13
58. The Committee recommends that in future, all management decisions are fully documented and comprehensive, clear and accurate minutes are maintained of all Board business.

Recommendation 14
64. To ensure that potential issues of fraud are addressed appropriately in future, the Committee recommends that the Department assures itself Translink has a Fraud Response Plan in place in line with those adopted by central Government Departments and that this plan is operating effectively.

Recommendation 15
67. In future, all exceptional payments of this kind to individuals anywhere in the public sector should require not just Departmental approval, but DFP approval. The Committee wants to see such payments made transparent in the accounts and would like the C&AG to draw these to the Committee’s attention as a matter of course.

Recommendation 16
69. The Committee understands that the normal practice within the public sector is that retirement functions for staff held in high standing are funded by donations from their colleagues. The Committee recommends that Translink and every other public sector body conforms to this practice.

Recommendation 17
73. Where highly respected individuals are prepared to give time to public boards, the Committee expects Accounting Officers to ensure that their contribution is effectively deployed. In this particular case however, the Committee insists on an assurance from the Chairperson of the Northern Ireland Transport Holding Company that her Board is completely satisfied that it currently receives all of the information relevant to its important oversight role.

From the NIAO summary

The Comptroller and Auditor General’s Report showed:

Part 1: There was a very significant overspend on the project:

The project was approved with a budget of some £15 million and was scheduled for completion by December 2001. However the project experienced a number of difficulties, resulting in a very significant overspend and late delivery.
The final cost of the project was almost £34 million and it was completed nine months later than planned in September 2002.

Part 2: The overspend was the result of failures in several key areas:

There were serious deficiencies in the economic appraisal which under-estimated the cost of the project. The Department accepted Translink’s assurances on the accuracy of these estimates and allowed the project to proceed even when it became apparent that projected costs were well in excess of the budget. [added emphasis]
Maunsell Rail, Translink’s lead engineering consultants, did not specify the contract properly and failed to deliver track designs. These failures contributed to multi-million pound claims from the construction contractor (Mowlem Rail). Translink’s ability to control these cost increases was severely prejudiced by omissions in the tender documentation prepared by Maunsell and the absence of effective contract variation procedures.
Translink terminated Maunsell’s appointment by agreement in November 2001. Even though much of the increased cost resulted from Maunsell’s failures, no damages can be recovered because the Termination Agreement effectively waived Translink’s right to claim. It is difficult to be exact about the quantum of any loss to the public purse. However we estimate the potential loss is in the region of £8 million to £13 million.
In addition to the increased cost of the project, there is uncertainty as to whether it has delivered all of its intended benefits. The original specification of a 90 mph speed limit was reduced to 70 mph and other works on bridges and sea defences were removed from the contract to reduce costs.

Part 3: Action is required to improve future performance:

Many of the problems which arose on the project could have been avoided or their effects lessened if Translink had managed the project properly. Translink had no procedures for project management or the management of consultants and there were shortcomings in procurement practices.
Translink’s documented record was very poor; key decisions were not recorded and documents were destroyed by a senior official.
There were indications of excessive generosity to Translink staff and the Board failed to provide effective oversight on decisions which put public funds at risk.
Translink has made progress with plans to improve project management but implementation in some areas has been slow.
The Department stated that significant lessons have been learned and that action has been taken to improve its control of Translink capital projects.

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  • Sean Og

    DSD were also strongly critisised for benefit errors and the CSA’s inability to collect Child Maintenance. Apparrently outstanding debt to the CSA doubled in the past year.

    Reading the reports of Margaret Ritchie’s appearance in front of the DSD committee yesterday (BBC) you have to wonder if she has the will to sort these problems out.

    She comes across as the Minister for DSD staff rather than a Minister for Social Development. She appears to be more concerned about the jobs of Civil Servants working in her Department rather than the thousand of single parents who aren’t getting the Child Maintenance they need and are entitled to or the thousands getting the wrong social secirity benefit rates.

    It looks to me like Margaret has been house trained by the civil servants faster than any other Minister.

    Sir Humpry would be proud of them!

    http://news.bbc.co.uk/1/hi/northern_ireland/6274740.stm

  • Rubicon

    The NIAO Report is damning and the Dept responses during the PAC hearings hardly give confidence. Essentially, a overspend of over 100% was allowed and the persons responsible – far from being penalised – were rewarded with retirement parties. What we get appears to be an assurance that there is now “an intesity of management” (whatever that means!) and improved procurement practise (when anything would be an improvement over this fiasco).

    Most worrying is that overspends of over 40% are “built in” and expected because “engineers tend to be over optimistic”. How can ANY procurement involve competitive tendering with such a large “optimism factor”? A bidder with accurate cost estimates will be in danger of being passed over in favour of a company that deliberately undercosts their project estimates.

    It seems to me that the only ‘improvement’ here is to pretend competitive tendering is occurring and limiting overspends to around 40%!

    Yes – it’s progress – but not as we might expent.

  • Armstrong

    “It looks to me like Margaret has been house trained by the civil servants faster than any other Minister.”

    She has. A poor start as a Minister for the woman. A light weight totally out of her depth. She simply reads what ever script the civil servants put in front of her.

    In that report she comes across as a Trade Unionist rather than a Minister. (The link doesn’t work by the way)
    If she sorted out the appalling sickness levels in DSD she could improve efficiency. But the civil servants won’t tell her to do that!

    Margaret’s answer to problem seems to be “Give me more money”. Does she not realise that she is in Government now rather than on Down District Council?

  • On the Bangor line. It’s shameful that this money has been spent and no appreciable improvement in service has been delivered. I was intrigued as well to discover that the reason the new trains, which were so lauded when they arrived, smell like shit literally because the vents from the toilets emit in the inside of the train.

    It is also disgraceful that the Londonderry line, between NI’s two major cities is so dilapidated and runs on one track for most of the way. This is where the 30 odd million should have been spent.

  • Cruimh

    I so agree Ziz – so much for the green option of train travel. But money is needed for far more important things such as staff bonuses, junkets abroad, allowances, unnecessary ‘improvements’to roads (good little earner for those in the right place),funding schemes for terrorists and other wasters to ‘help the community’, translators for languages nobody actually needs etc etc .

  • The Pict

    [Don’t they know how to use links from the index? – Ed]

    Maybe it is not part of their remit?

  • jone

    Ritchie’s performance yesterday was risible.

    Simply running to the TV camera’s and saying ‘we haven’t got enough money I’m going to half to sack everybody unless the Treasury ponies up’ just looks incredibly weak.

    You’re a Minister. You’re in charge. Come up with a plan. Fight your corner in Executive. Don’t just stand around gurning.

  • martin walker

    all thismoney and no link to the airport

  • Pete Baker

    *With noted exceptions*

    Try to keep to the actual topic.