Research Finds Major Skills Gaps in Public Investment Scrutiny Across Local Authorities

A University of Birmingham study examining business cases and economic appraisal found substantial gaps in specialist skills and available resources.

The findings come as local and regional authorities take on greater responsibilities for managing development projects and public investment.

What did the research reveal?

The research, conducted by Alice Pugh of the University of Birmingham's City-REDI, surveyed 88 officers working across 57 UK strategic authorities.

Some 62% of respondents reported having little or no dedicated appraisal expertise within their organisations.

More than three-quarters said they had never held a Better Business Cases Green Book appraisal qualification.

The findings suggest that some organisations face challenges when evaluating whether proposed investment projects represent an effective use of public resources.

The study's sample does not establish that 62% of all UK councils lack appropriate expertise. It reflects the experiences of the officers surveyed.

Why does investment appraisal matter?

Local and regional authorities are responsible for, or involved in, decisions concerning transport, regeneration, infrastructure and public services.

Before major spending is approved, authorities may need to assess the financial costs, expected benefits, alternatives and risks associated with a project.

A strong business case helps decision-makers understand whether an investment is affordable, deliverable and likely to provide value for money.

Weak appraisal capacity can make the decision-making process more difficult, particularly where projects involve large sums or complex economic assumptions.

Are councils relying on external consultants?

The research identifies reliance on consultants as another significant issue.

External specialists can provide expertise that councils do not have internally.

However, the study warns that excessive dependence on outside advice may weaken the ability of public bodies to independently scrutinise commissioned work.

Without sufficient internal expertise, authorities may struggle to challenge assumptions, assess financial models or build long-term institutional knowledge.

The research does not establish that any particular investment was improper or that money was misspent.

What improvements are recommended?

The study calls for better access to specialist training, shared expertise across authorities, improved evidence and clearer guidance on investment appraisal.

It also recommends strengthening internal assurance capabilities so public bodies can more effectively evaluate consultant-produced assessments.

As greater spending powers move towards local and regional government, accountability arrangements will become increasingly important.

The central question is whether the expertise available to public authorities is keeping pace with the financial responsibilities they are being asked to manage.

Keep Updated UK will continue examining public procurement, consultancy spending and the scrutiny of major local government investments.