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Biggest UK Government Project Failures

Matthew Hayhow

By Matthew Hayhow Web Journalist, Updated 17 May 2017

It’s often bewildering when a government project screws up spectacularly. When you consider the amount of planning done by experts and implementation by skilled workers, you would think that disasters would be rarer than they are. But things go wrong – people bicker, budgets escalate and products and services are defective or don’t get finished at all. Frequently, the reason is poor planning, or workers not sticking to the plan, which leads to bad communication, unrealistic timelines and the overlooking of important details. But, as any office motivational poster will tell you, you won’t learn anything if you don’t confront failure. Here are seven of the biggest UK government project failures and why they happened.

A guide to the biggest UK government project failures.


7. Department for Transport Shared Services Centre

An IT scheme designed to integrate the Department for Transport’s human resources and financial services, and also save the taxpayer £57 million? If this sounds too be true, it’s because that’s what it turned out to be. Far from saving money, the scheme ended up costing £81 million due to management ineptitude described by the Public Accounts Committee as an exhibition of “stupendous incompetence”.

The plan was to cut administration expenses by basing payroll, finance and personal services in a single site in Swansea. However, the Commons Public Accounts Committee found that the project had been rushed and was doomed to make losses. The department tried to rush things through in order to adhere to overly optimistic deadlines, and was criticised for lack of opposition to such actions. As a result, the computer system was insufficiently tested, resulting in a dubious set-up when it was switched on. DVLA workers were even greeted by messages from the computer system in German. Eight months after the deadline, only two of its seven agencies were using the new system. Despite this, no one involved has yet to be dismissed or property held to account.

6. Common Agricultural Policy Delivery Programme

An IT scheme designed to allocate subsidies to farms was originally forecast to cost £155 million, but the programme has ended up costing more like £215 million. The scheme has delayed payments to farmers and incurred increasing penalties from the European Commission.

According to a Public Accounts Committee report, the three key bodies trusted to deliver the programme could not work together effectively. It found that there was a lack of consistent priorities and changes in leadership, which caused havoc and delay. Its focus on developing a digital front-end was “inappropriate for farmers” due to the frequently poor broadband in rural areas.

5. Libra System for Magistrates

The initial bid for the Libra project to provide a national system for 385 magistrates was £146 million from Fujitsu. However, before a final deal was even signed, Fujitsu raised the price to £184 million after the company’s board said it wasn’t able to support the charging basis on which the bid was submitted. They had not taken all the costs into account and “made some inappropriate… revenue assumptions”, according to the National Audit Office. Ten months later, Fujitsu asked for a higher price yet again, as their forecasts showed a deficit of £39 million over the life of the deal.

Ernst and Young advised the Lord Chancellor’s Department that Fujitsu’s financial model was unreliable. However, at this point the project was too important to let the supplier default. 18 months into the contract, the deal was renegotiated, increasing payments to Fujitsu to £319 million. Even so, Fujitsu still faced losses of up to £200 million. The next quote proposed by Fujitsu for £389 million was rejected by the department. The department ended up signing a contract with STL instead to provide Libra’s core software. However, Fujitsu still received most of the money, gaining tens of million pounds, despite not being contracted to deliver the software.

4. Edinburgh Trams

As any taxi driver in Edinburgh can and will tell you, the Edinburgh trams project was a complete mess. The system eventually cost more than £776 million, nearly double the initial estimated cost, plus more than £200 million in interest on a 30-year loan taken out by the council to cover the funding shortfall. The project ended up taking 7 years from initial construction to completion, twice as long as expected.

The project was halted repeatedly by internal squabbles. In 2007, the SNP attempted to ditch the project, a decision that was overturned by the other parties in Scottish parliament. In 2010, an argument between the project’s arms-length company and its main contractor nearly caused it to be cancelled indefinitely. Meanwhile, the interferences caused by construction not only made the once beautiful streets of Edinburgh an eyesore, but produced disruption and financial ruin to local business. But hey, at least now you can get around Edinburgh slightly slower than if you took the bus.

3. Scottish Parliament Building

The Scottish Parliament Building has been controversial for a host of things, including its location, architect and design – it’s described by one particularly glorious TripAdvisor review as a “grotesque brutalist mess” – but the reason a public enquiry was made into its construction was because of constant delays and its escalating cost. Initially scheduled to inaugurate in 2001, its doors finally opened three years later with an estimated cost of £414million, much higher than its original estimate of £10-40 million. The inquiry found incompetence in the management of the entire project, including fulfilment of cost and the way major design changes were added.

The cost hasn’t stopped there. Figures have revealed that the building’s average repair bill has reached £141,000 per month, five times the figure during the building’s first year. This means that since 2004, maintenance costs have set taxpayers back by £11 million, which of course is higher than some of the initial estimates for the cost of constructing the building itself.

2. NHS National Program for IT

In September 2013, an NHS patient record system that would have been the world’s largest non-military IT system was abandoned, in what could be the most catastrophic IT failure ever seen by the government. The failed centralised e-record system cost the taxpayer over £10 billion, £3.6 billion more than ministers had anticipated.

From the outset, the project was plagued by delays. The delivery of core systems was stalled due to fears that some software was not fit for purpose. After seven years, only 13 acute trusts out of 169 received the full patient administration systems they were agreed under the National Programme. The new systems also caused chaos for many users; a newly-installed IT system lost Barts NHS Trust thousands of patient records, delaying the treatment of urgent cases, costing millions in additional staff and warranting an internal investigation. The Milton Keynes Foundation Trust wrote a cautionary letter to the times about the inefficacy of their system, and warning others not to use it. 

1. Defence Information Infrastructure

The Ministry of Defence’s secure military network was built to help British troops operate more effectively around the world. The MoD gave parliament a figure of £2.3 billion, but a report by MPs has shown that they knew that the project would cost at least £5.8 billion. The true figure has since risen to at least £7.1 billion. By 2008, the programme was running at least 18 months late, had provided only 29,000 of a contracted 63,000 terminals, and had supplied none of the contracted Secret capability.

According to the then chairman of the PAC, Edward Leigh, there was no suitable pilot carried out for such a multifaceted programme. The condition of the Department’s buildings where the system was to be installed was badly miscalculated due to insufficient research.

These disasters could all have been adverted by better planning and listening to expert advice. If your business needs project management advice, fill in the form on the right and the experts at Software Advisory Service can provide impartial, non-chargeable advice to help you avoid the next major catastrophe.