The first budget of the current Labour government, in October 2024, specified economic growth as a key objective for the next five years. To achieve this, the government has argued that investment in infrastructure will be necessary. Investment in infrastructure is a positive goal as it can be a key driver for economic growth by improving productivity, reducing transport and energy costs, and attracting private investment. Well-maintained roads, efficient public transport and modern digital networks enhance connectivity, which can create jobs and increase economic output while delivering long-term value for taxpayers.
In this vein the chancellor of the exchequer allocated £1.5 billion for building new surgical hubs, £2 billion for improving NHS digital services, £500 million for the affordable homes programme and £1.4 billion for rebuilding schools.[1] If executed correctly, these projects may have economic benefits in the long-term. However, as this paper shows, this should be met with caution given the consistently poor decisions, delays and inflated costs seen within many government projects which suggests that there are systematic flaws.
The 2023-24 report by the Infrastructure and Project Authority outlines 227 major projects being undertaken by the government with a total whole life cost of £834 billion.[2] Of this, £374 billion will go towards infrastructure and construction, £298 billion towards military capability, £135 billion towards government transformation and service delivery, and £26 billion on ICT infrastructure.[3] Compared to five years ago, the total whole life cost of government projects has risen by £386 billion, an 86 per cent increase.[4] A total of 21 different government departments, as well as a range of quangos, are responsible for funding and managing these projects.
Yet, the government has a poor track record of delivering major projects. In 2013, the number of major projects judged at least “probable of successful delivery” by the Infrastructure and Projects Authority was at 48 per cent. This fell to 17 per cent five years later in 2018 and in the latest report, for 2024, it had fallen again to 11 per cent.[5] Managing the costs of major projects has also not been a strength of government. Research in 2009 showed cost overruns totaling £19 billion across 240 capital projects.[6]
Timing and cost overruns of important projects remain a substantial issue for government and taxpayers. Projects gain approval based on estimates of the cost, timing and outcomes for that project. When these estimates are flawed it results in billions of pounds more than expected being used to complete a project, often months or years after the scheduled timeframe. This impacts the outcomes of the project, as the original benefits of it are diluted by enhanced costs and delays meaning the real return on investment is lower than the original estimate, which if reflected at the time may have meant the project didn’t get approval.
This report explores why major government projects are often over budget and delivered late. It then examines four ongoing major projects which are experiencing overruns which will illustrate the substantial costs and delays caused by flawed forecasting.
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Key findings
- The total overrun of the Lower Thames Crossing, Houses of Parliament renovation, NHS digitalisation and rail passenger services is 3,372 days or over nine years, at a cost of over £6.2 billion or £220 per household.[7]
- The Infrastructure and Projects Authority has a total of 227 projects listed in its 2022-23 report.[8]
- Of these, 163 are listed as amber, meaning they will be completed but with significant issues, and 27 are listed as red, meaning the delivery of a successful project is unlikely. Some projects are not included in the assessment due to various exemptions. This means that almost 84 per cent of all major projects are running with significant issues.
- The planning application and subsequent response to questions for the Lower Thames Crossing is 360,000 pages long. If printed on A4 paper it would weigh almost two tonnes.[9]
- The overbudget cost of the Rail Passenger Services programme could pay for 37 days of free travel in London for all five million London Underground passengers who use the service daily.[10],[11],[12]
- The 533-day delay to the Rail Passenger Services Programme is enough time to travel the full route of the Trans-Siberian Express 76 times.
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[1] HM Treasury, What you need to know from the Budget, 1 November 2024, www.gov.uk/government/news/what-you-need
to-know-from-the-budget, (accessed 12 November 2024).
[2] Infrastructure and Projects Authority, Annual Report on Major Projects 2023-24, 2025, p.3.
[3] Ibid, p.4.
[4] Infrastructure and Projects Authority, Annual Report on Major Projects 2019-20, 9 July 2020, p.1.
[5] Infrastructure and Projects Authority, Annual Report on Major Projects 2023-24, 2025, p.12.
[6] O’Connell, J., Out of Control: How the Government overspends on capital projects, TaxPayers’ Alliance, 20 November 2009.
[7] Office for National Statistic, Families and households in the UK: 2023, 8 May 2024, p.2.
[8] Infrastructure and Projects Authority, Annual Report on Major Projects 2023-24, 2025, p.12.
[9] Paper Center, Paper sizes,
www.papercenter.eu/papersizes/#:~:text=A%2Dseries%20paper%20weights,even%20200%20and%20240%20grams,
(accessed 23 January 2025).
[10] Transport for London, Caps and Travelcard prices, tfl.gov.uk/fares/find-fares/tube-and-rail-fares/caps-and-travelcard-prices?intcmp=54720, (accessed 26 March 2025).
[11] Taken as the maximum daily fare for Zone 1 to 6 travel.
[12] Transport for London, What we Do, tfl.gov.uk/corporate/about-tfl/what-we-do, (accessed 22 October 2024).