Project overruns 'costing billions'

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Publicly-funded programmes are running up bills one-third higher, on average, than their original projections, the TaxPayers' Alliance said.

Its analysis of more than 300 projects from the past two years found that the net overrun came to £23 billion above initial estimates.

This was the equivalent of £900 for every household, the group calculated.

Having looked at 305 schemes, including roads, hospitals, science facilities, IT systems, art galleries and defence systems, it said the biggest overruns were the NHS National Programme for IT by £10 billion, the 2012 Olympics by £6.95 billion and the Astute Class Submarine by £1.1 billion.

The TaxPayers' Alliance said its figures were probably an under-estimate because departments often disguised overruns by scaling back orders and moving funds around.

As well as simply failing to work out the proper costs in advance or setting prices in stone, it said many overruns were caused by lack of know-how among officials and politicians.

In a report of its findings, the organisation said: "Politicians and civil servants lack management experience and subject knowledge and change posts too frequently.

"Most politicians and senior civil servants have no experience of managing large projects employing thousands of people. They are also unlikely to have any in-depth knowledge of the processes necessary to build, for example, a large hospital or aircraft.

"Finally, ministers are rarely in place to oversee a project from beginning to end, so they have an incentive to underestimate costs, knowing that they will not be in the same position when the project is finally delivered."