The IPA’s plans to improve the quality of government’s cost estimates of major projects have taken too long to implement. We have examined many projects Delivering value from government investment in major projects 7 where early cost estimates have proved to bear little resemblance to what a project will ultimately cost, and there is optimism bias in nearly every project we look at. Funding packages are often agreed, and projects approved before projects have reached sufficient maturity. High Speed 2 is a prime example of a budget being set well before plans were sufficiently mature. The IPA says that departments should be using ranges of potential costs until a project is sufficiently mature to finalise a funding package. Lack of cost-estimation capability in government means that departments end up too reliant on suppliers to determine what a project will cost. The IPA has produced cost-estimation guidance and developed a cost-benchmarking hub to provide better data to improve cost estimation. However, the IPA does not expect departments to populate it with their project cost data until later this year and currently does not intend that the benchmarking hub also includes information on the value and benefits that projects produce. Recommendation 5: Alongside their response to this report, the Infrastructure Projects Authority and HM Treasury should write to the Committee setting out how they plan to incentivise departments to populate the IPA’s benchmarking hub with accurate and consistent information on the actual costs and benefits of their projects.