NAO urges better oversight of mega-projects

The National Audit Office (NAO) is calling for stronger governance of government mega-projects to improve decision-making, control costs and avoid delays.

A new NAO report highlights that mega-projects — which are large, costly and strategically important — often face significant risks and uncertainty. The report comes as the government plans to introduce a 10-year infrastructure strategy later in 2025 and make changes to how major projects are organised and overseen.

The NAO defines mega-projects as those that are particularly costly, innovative, risky, complex and strategically significant. These projects often span Parliaments, involve multiple government departments and stakeholders, and can take decades to deliver. Examples include large infrastructure projects like HS2.

The report recommends that HM Treasury and the new National Infrastructure and Service Transformation Authority (NISTA) strengthen the governance of mega-projects to ensure accountability is clear and roles are properly defined. It also calls for improved processes to assess the affordability, value for money and feasibility of projects before they are approved.

Gareth Davies, head of the NAO, said: “This report offers important insights from the National Audit Office’s work on government’s largest and riskiest projects. These lessons will assist the government as it makes changes to the way in which major projects are organised and overseen.

“Mega-projects often involve high levels of innovation, cost and risk, and can take decades to deliver and see the benefits. This means government needs stronger governance approaches for these projects.”

Sir Geoffrey Clifton-Brown, chair of the Committee of Public Accounts, also commented on the report’s findings: “The Public Accounts Committee has seen time and time again how difficult government finds it to deliver mega-projects. HS2 is a case in point for the billions of pounds worth of taxpayers’ money put at risk due to failures in governance and oversight.

“Government clearly has a long way to go to learn from and address the common issues that plague these mega-projects. Today’s NAO report should serve as an important guide for how government can strengthen governance and improve decision-making in the riskiest and most complex projects it oversees.”

The NAO highlights that differing views on key issues have caused delays, pauses and even resets on some mega-projects. Without a shared vision and strong leadership, projects risk being approved too early, before costs and timelines are properly understood.

To address these challenges, the NAO makes several recommendations for HM Treasury and NISTA, including:

• Improving how mega-projects are categorised based on their risk and strategic importance.
• Strengthening governance structures to ensure accountability and clear roles.
• Improving project gateway and business case approval processes to ensure affordability, value for money and feasibility are properly assessed before projects get final approval.

The report also includes a list of key questions for project sponsors to consider when setting up governance structures.

The full report is available on the NAO website.