Most Scottish council projects over time and over budget

13 Mar 13
Auditors have criticised Scottish councils’ management of major capital projects after finding most schemes were late and cost ‘significantly’ more than first estimated.

By Richard Johnstone | 14 March 2013

Auditors have criticised Scottish councils’ management of major capital projects after finding most schemes were late and cost ‘significantly’ more than first estimated.

An analysis of 63 local government projects completed since 2009 found that information about whether they were built to cost was ‘not always available’. Where information was provided, few were completed within the initial cost estimate, according to Major capital investment in councils, published today.

In the 35 programmes where both initial and final costs were known, just 13 were built within the first estimate and one exceeded it by just 1%. Costs of the remaining 21 were ‘significantly higher’ – between 5% and 189% more than the estimate. These developments had a combined outturn cost of £344m, £89m more than the initial estimate.

The report also found it was ‘impossible’ to tell in some cases if the scheme had been delivered on time and to budget. In almost one in five cases, the estimated cost had not been available when the project was approved.

Similarly, 20 of the 63 projects could not provide a time estimate at the initial approval stage.

The majority that did have a confirmed completion date were delayed, the Accounts Commission report added. Of those examined, 79% took at least two months longer to complete than estimated at initial approval, with only 19% completed on time.

Seventeen months was the average delay. Councils reported that in three-quarters of schemes, changes to the project’s scope were a factor in delays. Town halls also reported that unforeseen delays or extra costs from third parties, such as utility providers, affected half of schemes.

The report noted that Scottish local authorities had invested £23bn in schools, social housing, sports and leisure centres since 2000/01 from their capital budgets. There are currently 203 projects under way, with a combined value of just over £5bn.

Although it found that some councils had improved their oversight of construction programmes, there was still a long way to go.

For example, few authorities had established processes for developing and using business cases for new projects, which meant vital information on aims, cost, time, scope and risk might not be clear when the developments were approved. This made it more difficult to hold decision-makers to account if problems arose, the report concluded.

Accounts Commission chair John Baillie urged councillors to examine the commission’s good practice guide on how to improve planning and control of capital spending, which was published today.

He added: ‘With continued pressures on public finances, it is important that councillors and officers have effective plans and controls in place over their capital investments to ensure the money is well spent. There are many complex challenges in delivering these projects and I strongly encourage councils to use our good practice guide.’

The president of the Convention of Scottish Local Authorities, David O’Neill, said the report showed councils had responded to ‘a real drive’ to increase capital investment to help stimulate economic recovery.


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