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Heathrow Expansion programme SRO reappointment letter

Updated 20 February 2024

Sender

Permanent Secretary

Department for Transport
33 Horseferry Road
SW1P 4DR

Chief Executive

Infrastructure and Projects Authority
1 Horse Guards Road
London
SW1A 2HQ

Recipient

Caroline Low

Letter

4 March 2019

Subject: Reappointment as Senior Responsible Owner (SRO) for the Heathrow Expansion Programme

We are writing to confirm the continuation of your role as Senior Responsible Owner (SRO) for the Heathrow Expansion Programme (previously known as the Airport Capacity Programme), directly accountable to the Director General (International Security and Environment Group, or nominated alternative), and with governance arrangements that include the Heathrow Expansion Board (HEB), within the Ministerial policy responsibility of the Secretary of State. This role and the additional responsibility for Aviation and Maritime Analysis is expected to be full time with acknowledgment that you are 90% FTE.

As SRO you have personal responsibility within DfT for enabling the delivery of the Heathrow Expansion Programme and will be held accountable for the delivery of its objectives and policy intent; for securing and protecting its vision, for ensuring that it is governed responsibly, reported honestly, escalated appropriately and for influencing constructively the context, culture and operating environment of the programme.

Following designation of the Airports National Policy Statement (NPS) in June 2018, the focus of the programme has shifted to enabling development and delivery of an application for Development Consent in 2020 that maximises the benefits and mitigates the negative impacts of expansion at Heathrow Airport. This includes working with Aviation Directorate colleagues on ongoing policy issues (such as carbon, slots and domestic connectivity), legal defence and continuing to make the case for the Northwest Runway scheme.

In addition to your internal accountabilities, you should also be aware that SROs will be held personally accountable to Parliamentary Select Committees. You will be expected to account for and to explain the decisions and actions you have taken to deliver the programme (or specific milestones). In your case this means that you will continue to be held personally accountable and could be called by Select Committees to give evidence about delivery of the Programme.

It is important to be clear that your accountability relates only to the Government’s role in implementation: it will remain for the Minister to account for the relevant policy decisions and development, for Heathrow Airport Limited (HAL) to bring forward a detailed application for Development Consent, to authorise construction of the scheme, and for a completely separate team in DfT to deal with decision-making on any applications for Development Consent.

Detailed SRO roles and responsibilities are attached at Annex 1. You should follow the guidance in that document. You should also make sure you understand the guidance Giving Evidence to Select Committees - Guidance for Civil Servants. You should also make yourself aware of the Infrastructure and Projects Authority (IPA) guidance on management of major projects.

Tenure of position

This letter is valid until an application for Development Consent, which is expected in 2020, however we note that the IPA commenced a Project Initiation Routemap exercise in autumn 2018, during which roles and responsibilities, including those of the SRO will be reviewed. If relevant, a further letter will be issued reflecting any updates at that point if required.

We recognise that you have been the SRO for the Programme for the past three years and may seek a new challenge in the near future. As it is vital to ensure that the appropriate leadership is in place, the Department will consider succession planning as part of standard HR good practice.

Objectives and Performance Criteria of the Heathrow Expansion Programme

The Programme’s intent is to deliver increased airport capacity in the South East through a new Northwest Runway at Heathrow Airport by 2030. This is consistent with the decision of the Secretary of State to designate the NPS, which was approved by the Cabinet Economic Affairs (Airports) Sub-Committee in June 2018. Proposed changes to the Programme scope which impact on this intent or the objectives set out below must be authorised by the Director General (International, Security and Environment Group) and the Heathrow Expansion Board (HEB), and may be subject to further levels of approval including Ministers.

The Government’s role in expansion is that of an enabler through the development of relevant public policy areas rather than itself delivering expansion. HAL will be responsible for undertaking all planning, financing, build and operational related activities (subject to the outcome of any application for Development Consent).

The Programme has developed a set of programme objectives that set out what the Programme is aiming to achieve. These have been agreed with Ministers and form the basis of the Programme’s updated business case. The objectives represent the overall expectations that the Government has with regards to this Programme.

The objectives, against which successful delivery will be assessed, are:

• address the shortage of airport capacity in the South East by enabling private sector delivery of an expanded three-runway Heathrow airport
• minimise and mitigate the environmental impacts of expansion, and ensure Heathrow acts as a good neighbour to local communities
• ensure Heathrow airport is able to meet ambitious sustainable journey targets, and is fully integrated with local and national transport networks
• enhance Heathrow airport as a globally strategic hub that benefits passengers and trade across the whole of the UK
• seize the opportunities that Heathrow expansion presents for driving economic growth, skills and employment across the UK

In addition, the Secretary of State and HAL have agreed a shared vision and strategic objectives for the Programme as set out in the Relationship Framework Document. It is recognised that DfT and HAL have different motivations and incentives related to expansion.

Your high level personal objectives and performance criteria are:

• ensuring arrangements are in place to defend legal challenges
• enabling the development and delivery of an application for Development Consent, by developing policies and managing key dependencies, in particular those relating to Airspace Modernisation, the M25, and modal shift through innovation and proposed rail schemes by Summer 2020
• leading an inclusive, motivated and effective team as well as ensuring the well­ being of all staff
• working with HAL to bring forward proposals that aim to keep airport charges close to 2016 levels in real terms, whilst delivering a financeable scheme that is in the best interests of the consumer
• continuing to make the case for the Heathrow Northwest Runway scheme and wider airspace modernisation

Programme delivery:

• ensuring a smooth transition from delivery of the NPS to the next phase of the programme where delivery increasingly shifts to HAL
• agreeing any delegations to the Programme Deputy Director by early 2019
• completing an IPA Project Initiation Routemap for the programme by early 2019
• succession planning (Spring 2019)
• ensuring coordination and integrated senior governance across DfT in relation to rail access, airspace modernisation and management of the M25 works. Escalation of issues to the Board Investment and Commercial Committee (BICC) and the Executive Committee (ExCo) when a whole Department view is required
• championing good programme/project management practice including effective and efficient deployment of resources, financial management controls and developing and agreeing management information to report against benefits delivery

Stakeholders:

• maintaining a strong relationship with HAL in accordance with the Relationship Framework Document and other stakeholders ie. CAA, airlines, communities, local authorities and other interested parties
• ensuring coordination with other Government Departments, for example in relation to carbon, air quality, planning and logistic hubs

The Department will continue to support you in your role as SRO for the programme and commit to give you the necessary time at BICC and ExCo to consider any issues requiring escalation and cross Department coordination.

Extent and limit of accountability

Finance and Controls

HMT spending controls will apply on the basis set out within your department’s delegated authority letter. Where the programme exceeds the delegated authority set by HMT, the Treasury Approval Point process will apply and the details of each approval process must be agreed with your HMT spending team. You should consult departmental finance colleagues on how to go about this.

You should also note that where expenditure is considered novel, contentious, repercussive or likely to result in costs to other parts of the public sector, HMT approval will be required, regardless of whether the programme expenditure exceeds the delegated authority set by HMT. If in doubt about whether approval is required you should, in the first instance, consult departmental finance colleagues before raising with the relevant HMT spending team.

The overall budget for the programme for 2015/16 to 2020/21 is broken down as follows:

The current approved programme expenditure figure is £4m, which provides cover during FY 2018/19. Agreement for future funding will follow the business as usual business planning cycle.

We recognise that there is a high degree of uncertainty around the potential budget demands of the programme and the table above is a snapshot at Q2 2018/19. Programme spend relates to legal advisers, financial consultancy, transport consultancy and other fees.

	2015/16	2016/17	2017/18	2018/19	2019/20	2020/21
Budgeted FTEs	31.0	60.0	73.9	72.6	73.8	73.8
Actual FTEs	29.6	49.3	59.8	-	-	-
Forecast FTEs	-	-	-	60.4	72.8	72.8
Budgeted Pay costs in £m	2.2	4	4.7	4.3	4.6	4.6
Actual Pay costs in £m	2.1	3.3	3.9	-	-	-
Forecast Pay costs in £m	-	-	-	3.8	4.1	4.2

You should operate at all times within the rules set out in Managing public money. In addition, you must be mindful of, and act in accordance with, the specific Treasury delegated limits and Cabinet Office controls relevant to the Airport Capacity Programme. Information on these controls can be found here: Cabinet Office controls.

Delegated departmental/project authority

You are authorised to approve expenditure of up to £8.3m (programme and resource budget) during 2018/19.

You are authorised to agree project rescheduling within agreed tolerances, but rescheduling beyond that must be agreed with the Heathrow Expansion Board (HEB).

You are also responsible for recommending to the Director General (International, Security and Environment Group) and the HEB the need to either pause or terminate the programme where necessary and in a timely manner.

Where issues arise which you are unable to resolve, you are responsible for escalating these issues to the Director General (International, Security and Environment Group) and the HEB, BICC and ExCo.

Programme Status

The Programme Status at the date of your appointment is reflected in the most recent quarterly return on the programme to the Infrastructure and Projects Authority. This is the agreed position as you continue formal ownership of the programme.

Major Projects Leadership Academy (MPLA)

As SRO of a GMPP project, you will be required to enrol on the MPLA. Discussions are on-going with the IPA Leadership and Capabilities team to find a cohort that fits in with residential requirements.

To widen experience and understanding of the role, SROs are expected to become accredited Major Project reviewers and to lead or participate in such reviews for other Government departments, the wider public sector or other areas of the Department for Transport as appropriate. We note that at present you are not a registered Assurance.

Reviewer and encourage you to sign up. Guidance is available online1 however, the Project Delivery Centre of Excellence in DfT can offer individual advice if you prefer.

We would like to take this opportunity to wish you success in your continued role as SRO.

Yours sincerely,

Bernadette Kelly CB

Permanent Secretary

[SIGNED]

Department for Transport

Matthew Vickerstaff

Interim Chief Executive

Infrastructure and Projects Authority

[SIGNED]

I confirm that I accept continuation of the appointment including my personal accountability for implementation of the project as detailed in the letter above.

Name of SRO: Caroline Low

Signature of SRO: [SIGNED]

Date: 6 March 2019

Annex 1: SRO Role and Responsibilities

The Role of the Senior Responsible Owner (SRO)

You are personally accountable for ensuring the ongoing delivery of the Heathrow Expansion Programme. You are responsible for securing the resources necessary for the success of the project and for the ensuring that the related implementation and transition activities realise the agreed objectives and benefits.

You will be personally accountable to Parliamentary Select Committees and be expected to explain the decisions and actions you have taken. This could include where a Minister has intervened to change the project during the implementation phase in a way which has implications for the cost and/or timeline of implementation. You will be able to disclose your advice about any such changes.

You must ensure the effectiveness of the governance, assurance and project management arrangements and maintain them throughout the life of the programme. You should adopt best practice and be prepared to justify any deviation from it, in line with guidance published by the Cabinet Office (Efficiency and Reform Group 19).

An SRO will:

• be a visible, engaged and active project leader, not a figurehead

• deliver the agreed outcomes and benefits

• create an open, honest and positive culture committed to delivering at pace

• challenge senior officers and Ministers when appropriate and escalate quickly

• provide appropriate support, steer and strategic focus to the Project Director (once appointed) and ensure that they have a clear and current letter of appointment

• have sufficient time, experience and the right skills to carry the full responsibilities of the role

Specific SRO accountabilities:

• ensure that the Programme is set up for success

• ensure that the project is set-up to make an unambiguous and demonstrable link to strategic policy

• translate this policy intent into clear deliverables which are established and agreed with senior stakeholders

• carry out a robust and commercially viable options appraisal, which balances risk with opportunity, as part of initial project feasibility

• establish a firm business case for the project during the initiation/definition phase and ensure that any planned change continues to be aligned with the business

• identify and secure the necessary investment for the business case (this includes both budget and operational resource)

• design and implement robust, appropriate and transparent project governance; Build strong and effective relationships with key stakeholders, justifying their trust and retaining their confidence, and obtain their commitment to benefits realisation

• ensure that the Programme meets its objectives and delivers the projected benefits

You own the Business Case, Delivery Plan, and Impact Assessment(s) and you are therefore responsible for establishing and maintaining them, refreshing and renewing them as appropriate from initiation and definition through the programme’s lifecycle, and for ensuring that the aims of the programme continue to be aligned with Off’s broader business objectives:

• gain agreement to the project objectives and benefits amongst stakeholders, including Ministers where appropriate

• understand the broader government perspective and its impact on the project

• ensure the strategic fit of the project objectives and benefits

• agree a clear and simple approach to performance management and monitor delivery of the objectives and benefits, taking appropriate action where necessary to ensure their successful delivery

• develop the Programme organisation structure and plan

• ensure that there is a coherent organisation structure and appropriately detailed project plan

• build the right team, securing necessary resources and skills and providing clear lines of accountability

• provide appropriate support, steer and strategic focus to the Project Director

• monitor and take control of progress

• monitor and control the progress of the project at a strategic level, being honest and frank about project progress, risks and issues

• ensure that any changes to agreed project benefits are flagged appropriately

• within project governance and that the business case is updated accordingly (throughout project life-cycle)

• ensure that the integrity of the project is maintained and speak truth to power - including to Parliamentary Select Committees

• communicate effectively with senior stakeholders regarding project progress and provide clear, appropriate and delivery-focused decisions and advice to the Project Director

• ensure problem resolution and referral processes are appropriate and effective

• identify, understand and drive the successful mitigation of project risks

• escalate serious issues quickly and with confidence to senior management and/or Ministers

• develop strong and effective engagement between the project team and its stakeholders and sponsors

• ensure that communication processes are effective and that the project’s objectives and deliverables continue to be consistent with the organisation’s strategic direction

• ensure that the project or programme is subject to review at appropriate stages

• ensure that your programme has an Integrated Assurance and Approval Plan (IAAP) that sets out all appropriate assurance and approval activities proportionate to its size, risk and novelty

Recognise the value of robust project review and ensure it occurs at key points

in the project lifecycle, particularly at the pre-initiation (feasibility) and initiation stages:

• make certain that any recommendations or concerns from reviews are met or addressed in a timely manner

• in the event of a “red” or “amber-red” review or a red or amber-red quarterly GMPP review rating, ensure that the Permanent Secretary has been made aware of the situation and has been briefed accordingly

• ensure that your programme is conducting regular evaluation and “lessons learned” exercises, both in their delivery and in respect of outcomes achieved. Lessons should be recorded and shared across the Department

Manage formal project closure

• formally close the project or programme and ensure that the lessons learned are documented within the final evaluation report and disseminated to key stakeholders

• ensure that the post implementation review takes place and that the output is communicated to the appropriate stakeholders

• ensure a plan for both long term benefits realisation and on-going sustainability is agreed with key stakeholders as part of the process of moving the project to “business as usual”