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IMF Country Report No. 22/287
UNITED KINGDOM
TECHNICAL ASSISTANCE REPORT – PUBLIC INVESTMENT MANAGEMENT ASSESSMENT
September 2022
This Technical Assistance Paper on the United Kingdom was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed in April 2022.
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Title page
FISCAL AFFAIRS DEPARTMENT
United Kingdom
Public Investment Management Assessment
Carolina Renteria, Michelle Stone, Tjeerd Tim, Ed Hearne, Carlos Mulas Granados
Technical Report
August 2022
Contents
ABBREVIATIONS AND ACRONYNMS
PREFACE
EXECUTIVE SUMMARY
I. TRENDS IN PUBLIC INVESTMENT
A. Public Investment and Stock of Capital
B. Provision and Composition of Public Investment
II. EFFICIENCY OF PUBLIC INVESTMENT IN THE UNITED KINGDOM
III. PUBLIC INVESTMENT MANAGEMENT INSTITUTIONS
A. The PIMA Framework
B. Overall Assessment
C. Investment Planning
D. Investment Allocation
E. Investment Implementation
F. Cross Cutting Issues
BOXES
3.1. The National Infrastructure Commission and National Infrastructure Strategy
3.2. Levelling Up
3.3. Scope of Infrastructure Plans
3.4. The Government Major Projects Portfolio
3.5. Management of Existing PPP (PFI) Contracts in the UK
3.6. Types of Private Involvement in Infrastructure in the UK
3.7. Securing Private Investment and Private Funding in Infrastructure Provision
3.8. Spending Reviews and Budget Process
3.9. Incentivizing Maintenance of Public Assets
3.10. The Treasury Approvals Process
3.11. National Infrastructure Pipelines
3.12. Market-led Proposals
3.13. Infrastructure and Construction Pipeline and Modern Methods of Construction
3.14. The Construction Sector Playbook
3.15. GMPP Quarterly Reporting
3.16. Government Functional Standard for Project Delivery
3.17. The Government Project Delivery Profession
3.18. Red/Amber/Green Status and Project Adjustment
3.19. International Examples of Major Project Challenge Models
3.20. Improving Asset Information to Help Public and Private Sector Planning
FIGURES
1. PIMA Results for the UK on Design/Effectiveness Compared with Peers
1.1. Public Investment and Capital Stock in the UK
1.2. Public Capital and Public Private Partnerships
1.3. Public Investment at the Regional Level
1.4. Composition of Public Investment (2019)
2.1. Global Measures of Public Infrastructure Access
2.2. Global Measures of Perceived Quality of Infrastructure
2.3. Relative Perceived Quality of Transport and Communication Infrastructure
2.4. The Efficiency Gap-Hybrid Indicator
3.1. PIMA Framework
3.2. PIMA Scores for the United Kingdom
3.3. Debt Sustainability and Affordability
3.4. Trends in Public Sector Gross Investment
3.5. Business Case Development Framework
3.6. Rate of Publication of In-Scope Tender Notices
3.7. UK Project Delivery Career Pathways
TABLES
1. Summary Assessment
2. Summary Recommendations
3.1. Major Changes to UK’s Fiscal Rules, 1998–2021
3.2. Devolved Powers in Northern Ireland, Scotland, and Wales
3.3. Local Government Capital Expenditurel
3.4. CDEL and Multi-year Programme Settlements
3.5. Summary of Information Available in PESA Reports
3.6. Implementation of NAO Recommendations from Public Investment-Related Reports
3.7. Devolution of Competence for Economic Infrastructure
ANNEXES
1. PIMA Action Plan
2. Detailed UK PIMA Scores
3. PIMA Questionnaire
Abbreviations and Acronynms
| ALB | Arm’s Length Bodies |
| CA | Contracting Authority |
| CBG | Consolidated Budget Guidance |
| CDEL | Capital Departmental Expenditure Limits |
| CfD | Contracts for Difference |
| COFOG | Classification of Functions of Government |
| C-PIMA | Climate-PIMA |
| BEIS | Department for Business, Energy and Industrial Strategy |
| DfT | Department for Transport |
| DLUHC | Department for Levelling Up, Housing and Communities |
| EIB | European Investment Bank |
| EU | European Union |
| Eurostat | Statistical Agency of the European Union |
| FAD | Fiscal Affairs Department |
| FReM | Financial Reporting Manual |
| GMPP | Government Major Projects Portfolio |
| HMT | Her Majesty’s Treasury |
| IPA | Infrastructure and Projects Authority |
| MMC | Modern Methods of Construction |
| MPM | Managing Public Money |
| MTFF | Medium Term Fiscal Framework |
| NAO | National Audit Office |
| NIA | National Infrastructure Assessment |
| NIC | National Infrastructure Commission |
| NIS | National Infrastructure Strategy |
| OBR | Office for Budget Responsibility |
| OECD | Organization for Economic Cooperation and Development |
| OSCAR | Online System for Central Accounting and Reporting |
| PC | Public Corporations |
| PESA | Public Expenditure Statistical Analyses |
| PFI | Private Finance Initiative |
| PF2 | Successor Framework to the Private Finance Initiative |
| PIMA | Public Investment Management Assessment |
| PPP | Public-Private Partnerships |
| RAB | Regulated Asset Base |
| SR | Spending Review |
| SRO | Senior Responsible Owner |
| TAP | Treasury Approvals Process |
| UK | United Kingdom |
| UKIB | UK Infrastructure Bank |
| UKGI | UK Government Investments |
| WGA | Whole of Government Accounts |
Preface
At the request of the Chancellor of the Exchequer, a team from the IMF’s Fiscal Affairs Department (FAD) undertook a Public Investment Management Assessment during April 4 to 19, 2022. The mission team was led by Ms. Carolina Renteria and included Ms. Michelle Stone and Mr. Tjeerd Tim (FAD), Mr. Carlos Mulas Granados (European Department) and Mr. Ed Hearne (FAD short term expert). This report builds upon the analysis in the September 2021 Climate Public Investment Management Assessment and draws on information gathered in that exercise.
The team met representatives from HM Treasury including Ms. Cat Little (Director General Public Spending), Mr. Phillip Duffy (Director General Growth and Productivity), Mr. Conrad Smewing (Director Public Spending), Mr. Marcus Mason (Deputy Director General Expenditure Policy (Capital), Ms. Johanna Harston (Deputy Director General Expenditure Policy); Mr. Tom Josephs (Director Fiscal), Ms. Ruth Curtice (Deputy Director Fiscal Statistics and Policy); Ms. Joanna Key (Director Infrastructure and Growth), Mr. Jonny Medland (Deputy Director Infrastructure, Digital and Culture) and Mr. Joe Taylor (Deputy Director Climate Policy). The team also met with staff from the Balance Sheet Analysis; Climate Change Policy; Devolution; Efficiency and Cabinet Office; Exchequer Funds and Accounts; Environment, Energy and Agriculture; Fiscal Statistics and Policy; Fiscal Strategy; General Expenditure Policy; Government Financial Reporting; Growth and Productivity; Health and Social Care; Infrastructure, Digital and Culture; Housing, Planning and Cities; Local Government and Reform; Public Value Unit; Home and Legal; Project Speed and Transport teams.
From other Departments and Agencies, the team met with the Infrastructure and Projects Authority (Ms. Helen Campbell, Director Strategy Performance and Assurance, Ms. Fiona Spencer, Director Capacity and Capability, Mr. David Clinton, Deputy Director Strategy); the Department for Levelling Up, Housing and Communities (Mr. Chris Gray, Deputy Director Levelling Up Taskforce and Zainab Agha, Deputy Director Devolution Strategy and staff); Government Commercial Function (Mr. Matthew Browne, Deputy Director Construction Major Projects and staff); the Department for Transport staff; the Ministry of Justice (Mr. Robin Seaton, Deputy Director and SRO Prisons Programme, Mr. Matt Shelley, Deputy Director Finance Strategy and Planning and staff); UK Government Investments (Ms. Lucie Lambert and Mr. Jamie Carter); and the Office for Government Property (Ms. Angela Harrowing and team).
The team also met with the Welsh Government, Mr. Andrew Jeffreys, Director, Mr. Steve Davies, Deputy Director Infrastructure Strategy & Assurance and staff; the South Yorkshire Mayoral Combined Authority, Mr. David Smith, Chief Executive and Directors; and representatives from the infrastructure sector including from: Confederation of British Industry, Global Infrastructure Investor Association, Mace and The Infrastructure Group. The team also met with the Institute for Fiscal Studies (Mr. Carl Emmerson and Mr. Ben Zaranko), the National Audit Office (Mr. James Osborne, Mr. Matthew Rees and Ms. Emma Wilson); and the UK Office for Budget Responsibility (Mr. Richard Hughes and staff).
The team would like to thank the UK government for their cooperation and their participation in constructive discussions. The mission would especially like to thank Ms. Handan Wieshmann, Ms. Halema Begum and Mr. Rory Allan for their excellent support in organizing the mission.
