Introduction
Portfolio planning in the UK Government can be a complete nightmare due to shifting political priorities, finite public resources (like most countries, this is getting worse every year), and increasingly complex delivery landscapes. While the frameworks supporting public project and programme management are well-established, they sit uneasily alongside the fast-changing environment in which government operates. Frequent ministerial changes and annual budget constraints hinder long-term planning and obstruct adaptive decision-making. This blog explores how agility i.e. the capacity to respond coherently and quickly to change, is not only valuable but necessary in government portfolio planning. It also outlines how agility can be practically achieved, even within existing structural constraints.
Political Volatility and the Case for Adaptive Planning
Political leadership in the UK changes frequently. Ministers in key departments often last fewer than two years (imagine if your Department Head changed that frequently, alongside all their priorities and ideas). Shifts in Prime Ministers, departmental reshuffles, or fiscal policy occur even more rapidly (In the UK, this is often twice per year). These changes introduce volatility into portfolios originally designed for longer-term delivery. Rigid planning approaches become outdated quickly, creating a backlog of misaligned or stalled initiatives. I work with teams at the 'bottom' of this pile and let me tell you, it's almost impossible to create a Product Roadmap for 6-12 months when government funding can be cut within days or weeks.
Agility offers a constructive response. In government terms, this means structuring portfolios to allow adjustments in direction while maintaining coherence and continuity. Rolling planning models are one such approach (I'd love to think that the UK Government has one large Obeya in 10 Downing Street). By revalidating delivery plans quarterly, teams can absorb change without dismantling entire portfolios. This model allows long-term strategy to persist while operational delivery adjusts based on new ministerial priorities or political signals.
Annual Budget Cycles
The financial architecture of central government is rooted in annuality. Departments receive funding allocations for a single financial year, with limited rights to carry unspent funds forward i.e. this structure incentivises in-year spending rather than cross-year optimisation. This leads us to focus on balancing the books rather than measuring the value. Sadly, the emphasis on annual spending targets frequently outweighs consideration of strategic alignment or incremental value. Treasury (The UK Government's funding centre) guidance reinforces this focus through scrutiny on variance between planned and actual spend. Delivery teams learn to equate success with hitting financial forecasts, not delivering measurable public outcomes.
Agile portfolio management reframes this challenge. It focuses on incremental value delivery rather than annual milestones. This model works when delivery is organised into time-boxed segments, each contributing to broader objectives. Regular delivery evidence can strengthen the case for sustained investment, even across years. It also de-risks spending decisions by showing early impact. Where flexibility exists, departments should seek delegated budget freedoms under HM Treasury's Managing Public Money guidance. Clear benefits realisation reporting and stronger financial forecasting can help secure such freedoms. They also lay the groundwork for future moves toward outcome-based budgeting, where funding follows delivery impact rather than fixed timelines.
The Constraint of Hypothecated Funding
Many government portfolios operate with hypothecated funds. These are ring-fenced allocations, tied to specific outcomes, policy areas or types of expenditure such as capital versus resource. While intended to ensure accountability, hypothecation reduces agility. It creates scenarios where one pot is underspent while another is exhausted, even when reallocating would maximise public value. Without mincing my words, this is perhaps the most frustrating aspect of working within the government domain. Delivery Managers cannot shift capital underspend to fill a resource shortfall without formal approvals. Similarly, ring-fenced funds for one programme cannot be redirected to another, even if emerging delivery risks or strategic opportunities suggest this would be more beneficial.
Agile portfolio planning requires more flexibility in financial architecture. This does not mean abandoning fiscal control. Instead, it calls for pre-approved reallocation mechanisms and broader delegation to responsible governance boards. Cross-programme contingencies, departmental-level flexible funds, and improved financial monitoring can support this shift - this is Project & Portfolio Management 101. Where portfolios are funded through Spending Review settlements, it's not just early engagement with finance leads and Treasury sponsors that we need to do, but effective impact measurement at a product level i.e. we need to know which products are delivering for us. It's definitely painful turning off a juggernaut £100mpa system, but it's more painful still dealing with it a decade later. My opinion is that Spending Reviews should let the Product Managers speak and the Project Managers listen.
Embedding Agile Mindsets in Government Portfolio Planning
Agility is not only procedural. It is cultural. It requires decision-makers to value iteration, responsiveness and learning. It also requires structural conditions that support rapid re-planning, honest feedback, and shared ownership of delivery challenges.
The following approaches support agility in government portfolios:
Strategic Reviews
These should go beyond performance reporting. They should assess continued strategic alignment and provide a forum to pause, pivot or scale based on real-world developments. This rhythm aligns well with agile delivery models and fosters sustained political engagement. There is a opportunity here for Evidence-Based Management at a government level.Empowered Portfolio Boards
Portfolio boards should operate as centres of strategic judgement, not gatekeepers. They need the remit and capability to adjust scope, reallocate funding and make real-time trade-offs between competing priorities.Integrated Portfolio Offices (PMOs)
Mature PMOs provide insight and challenge. They maintain portfolio-level risk views, track dependencies, and offer evidence for informed decisions. Their value lies not in control, but in enhancing adaptability across interdependent programmes i.e. they are a supporting function and not a managerial one.Value-Led Metrics
Success should be measured by delivery outcomes and benefits, not compliance with spend or timeline projections. Moving from input/output metrics to results-focused indicators encourages learning and reinforces purpose over process.
Conclusion
UK Government portfolios face significant structural challenges. Political cycles, annual financial constraints and rigid funding mechanisms all exert pressure on planning and delivery. However, agility offers a disciplined and practical response. It enables coherent progress in the face of disruption. Strategic portfolio planning is not simply about long-range forecasting. It is about building resilient systems that maintain strategic direction while remaining responsive in execution. This is not easy. But it is possible, and it is necessary. Through improved financial freedoms, modular planning, empowered governance and a focus on value, public sector portfolios can become more responsive and more effective.
As expectations of government delivery increase, the need to plan adaptively will only grow. Agility is not about speed alone. It is about coherence, intentionality and the capacity to act with purpose in times of change.
Even though the industry seems to believe Agile is dead, let's invest now to fix a broken system.
The best time to plant a tree was 20 years ago, the second best time is now.
- Chinese Proverb
References
HM Treasury. Managing Public Money.
https://www.gov.uk/government/publications/managing-public-moneyCabinet Office. Government Functional Standard GovS 002: Project Delivery.
https://www.gov.uk/government/publications/project-delivery-functional-standardHM Treasury. The Green Book: Appraisal and Evaluation in Central Government.
https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-governmentInfrastructure and Projects Authority. P3M3: Portfolio, Programme and Project Management Maturity Model.
https://www.gov.uk/government/publications/p3m3-assessment-toolHM Treasury. Spending Review 2021 Documents.
https://www.gov.uk/government/publications/spending-review-2021-documents