As part of the government’s work to reduce costs and deliver the effective, modern infrastructure the UK needs, the Treasury has today set out clear guidance for public infrastructure providers on how project risks should be estimated and how to better manage contingency funds.
This follows the successful launch in October of a joint report between government and the Industry Risk Group, and will help infrastructure organisations make the most of their budgets, drawing on lessons learned from the Olympics and other major projects.
It shows project teams how to get earlier sight of key risks, improving the management of their contingency funds with lower delivery costs as a result.
The new guidance brings best practice from the public and private sector to public sector project management, so that government can lead from the front, and has been piloted by big projects such as Crossrail to great success.
The guidance, published as a supplement to the Treasury’s Green Book, is intended for the public sector, however it is expected that industry will adopt much of this as a model for good risk management.
Commercial Secretary to the Treasury, Lord Deighton said:
If we want a modern, competitive economy we have to invest in our infrastructure and we have to make sure we get the best deal for the public when we do so.
We have learned from world leading projects like the Olympics and Crossrail that better planning reduces costs and makes projects more efficient. Under the new guidance project leaders will be encouraged to manage their funds much more actively, and focus on getting the biggest bang for their buck.
The government is leading the way on how we manage risk and cost our projects so that we make sure the UK has the infrastructure we need to compete in the global race.
Photo by jtweed on Flickr. Used under Creative Commons.