The Ministry of Justice (MoJ) has promised to launch a “formal lessons learned exercise” after writing off £45.8m on abandoned building projects for new courts.
The figure was contained in a National Audit Office (NAO) report ahead of a hearing this week of the justice select committee into the MoJ’s operations.
Sir Alan Beith, chairman of the committee, asked MoJ officials about the money which the department “seemed to have lost” at a hearing yesterday morning.
Craig Watkins, director of finance and planning at the MoJ, said the projects were initiated “many years ago” prior to the creation of Her Majesty’s Courts and Tribunals Service (HMCTS) and the MoJ.
“They were initiated at a time when the financial context was very different and also the operational needs of the courts’ service at that point was different from what we now think it will be going forward,” Mr Watkins said.
He said the MoJ had “absolutely done the right thing” in terms of the HMCTS board “rigorously reviewing” all the projects they had and “making the decision that these were no longer value for money for the taxpayer”.
Mr Watkins went on: “That does mean that there is a loss on these projects in terms of some of the work that was done on those projects, but it is the right thing to do to stop them before they go any further.”
He said that at the time the projects were initiated, decisions were able to taken by agencies, effectively without the oversight of the department, allowing them to make “major commitments”.
Mr Watkins said that this was now different, there had been a “sea change” and any decision of a kind similar to the construction projects had to go up through the governance structure and be approved by the executive team and the “assurance directorate”.
He added that, as a result of its “change work”, the MoJ was aiming to anticipate, wherever possible, the operational needs of the future and where court projects were really needed.
In its 2013-14 report for the justice committee, the NAO said that during the year management at the MoJ had reviewed sites acquired to accommodate future court building projects and found that a “small number” no longer represented value for money.
Of the £45.8 losses, the report said the ministry had identified in its accounts £23.5m relating to preliminary work on new courts and £22.3m for two leases of land no longer required.