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Garden Bridge: Funding

Volume 656: debated on Friday 15 March 2019

Motion made, and Question proposed, That this House do now adjourn.—(Rebecca Harris.)

It has been a busy week for us all at work, with the intractable impasse of Brexit preoccupying most, but life goes on outside this unsolvable Rubik’s cube. I want to draw attention to a scandalous misconduct issue: the £50 million-plus spent on a flower-strewn bridge across the Thames on which zero construction ever occurred. At least £30 million of that comes from the coffers of the Department for Transport. I am pleased to have a Transport Minister before us today, but this ill-fated project is a huge, multidimensional issue that is cross-departmental in nature. I hope that he can share some insights into how this represents best value and best practice and how we can learn lessons so that we do not have a repetition of what has been a catalogue of errors.

My hon. Friend speaks about not having a repetition, but while this is possibly the largest example of public money being wasted on something that was never going to go ahead, public money has been wasted on other infrastructure projects, well after the time that it was obvious to anyone that they would not go ahead. Does she share my hope that we can stop this waste of public money in future?

I am grateful to my hon. Friend, who, until his elevation to the Front Bench, was a fellow member of the Public Administration and Constitutional Affairs Committee, where we address these things all the time. He is bang on the money, as ever, and I will come to some of those points.

Certain words are associated with certain terms: Profumo—“scandal”; Suez—“crisis”; Grenfell—“tragedy”; Dunblane—“massacre”; and Clapham Common—“rail disaster”. That one was for the Rail Minister. The word “fiasco” should, I think, for ever more be associated with Garden Bridge. The Observer claimed last month that the project was scandalously mismanaged and would cost the taxpayer £43 million for nothing.

This is the biggest uninvestigated scandal by a long chalk. It is two to three times the size of the Kids Company scandal, which our Committee did investigate, and which was turned into a London theatrical musical. It is unlike Kids Company, however, in that there is nothing to show for it, and it is unlike Profumo and those other scandals in that it is a genuine scandal of which many people have never heard. We will never see anything about it in certain outlets. The now departed from here Chancellor George Osborne’s fingerprints are all over it, and it has been rendered invisible in the Evening Standard recently, since it all went wrong. I think the paper was quite cheerleading about it before, under its former editor. That editor is now editor of the “Today” programme, so we will never hear about it on the radio first thing in the morning over our cornflakes either.

Many of the so-called great and good are implicated in this whole affair. The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) is among them. The national treasure Joanna Lumley, who had some success with the Ghurka issue, had less success in this instance. The project had been brewing since at least 2003. The Labour Mayor at the time, Ken Livingstone, flatly refused to do anything about it. His successor, the ex-Tooting MP and current post-holder Sadiq Khan, commissioned the report undertaken by my right hon. Friend the Member for Barking (Dame Margaret Hodge), which eviscerated the affair. After the evidence appeared, the plug was pulled. The indomitable Will Hurst of Architects’ Journal pondered:

“How was the Garden Bridge Trust able to spend £46m on a non-existent bridge?”

In fact, the figures after the final winding-up costs exceed that.

A brand-new report published by Dan Anderson of Fourth Street, a consultancy specialising in heritage lottery funding, has called the project an extraordinary waste of public money—more than £53 million in total, over 80% of which came from the public purse. The London Assembly member Tom Copley demanded to know exactly why the additional funds were not vetoed by officials when it was so obvious that the project was flailing, a point made a moment ago by my hon. Friend the Member for Ipswich (Sandy Martin). As I said earlier, there was £30 million from the Department for Transport. Our northern colleagues—indeed, anyone outside the M25—expressed indignation about the fact that so much was spent on the bridge when, in a climate of austerity, transport upgrades and initiatives have not gone ahead. This is not just a London issue; it is wider than that.

In terms of cost, the garden bridge dwarfs previous scandals. I have already mentioned Kids Company. The cash for honours scandal resulted in an £18 million loss. Arms to Iraq cost £4 million, and the parliamentary expenses scandal £2.5 million. Only the Northern Ireland renewable heat initiative cost more. However, there has been an astonishing lack of repercussions in this case.

The Minister may have a sense of déjà vu. In 2016, he was in a similar slot, responding to a debate on this matter initiated by my hon. Friend the Member for Vauxhall (Kate Hoey). However, a lot has changed since then. We have now seen the final bill. On 13 February, just over a month ago, the cost to the taxpayer was revealed to be £53.3 million. A further £5.5 million of winding-up costs was to be paid by the Department for Transport, via Transport for London. In 2018, the legal opinion of Jason Coppel QC, an expert in public and procurement law, referred to a “probable” violation of obligations by trustees, including Joanna Lumley and Paul Morrell, the former chief construction adviser to the Government. There is a sniff of “mates’ rates” here. The project should not have been given the green light by the Government despite all the warnings.

This is a sorry end to a supposedly pioneering project, and a far cry from the 2013 national infrastructure plan. At the time, Danny Alexander said that a £30 million fund to kick-start the project would be supplemented by private income. The Minister himself said that the bridge would be magnificent and that people would come from all over the world to see it. I think that it was supposed to be the second biggest tourist attraction in Europe. My parliamentary neighbour, my hon. Friend the Member for Ealing North (Stephen Pound), was also a big fan, and the computer-generated image excited many people.

Today’s debate is particularly urgent, because the Garden Bridge Trust—the charity responsible for the project—will wind itself up imminently. We now have an itemised bill, in which £21.4 million for building contractors is the biggest expense. Again, this was in 2016, when the funding was not in place and the planning permissions were not there; none of that had been sorted, yet this huge contract was signed off—£10 million to designers and architects, £400,000 on a gala fundraiser, £1.3 million on geotechnical marine surveys of the Thames, £161,000 for the website. So there are huge question marks around the robustness of the business case for this ill-fated bridge to nowhere, and there are questions about the Department for Transport’s own criteria set by the Treasury, which we need to make sure are followed through properly next time. A lot of questions about due process, openness, transparency and accountability have dogged the project since inception and those involved need to be held to account.

We know that the Transport Minister, the Chancellor and Chief Secretary at the time have all moved on, but the Mayor of London from then, the project’s chief midwife, is still active in politics. Until recently, he was Foreign Secretary, and just this week he had a tasteless outburst on the airwaves about money being blown on a historical child abuse inquiry, which has upset families. That seems rich given the cumulative price tag of all his pet projects—not just the unbuilt bridge, but the unused water cannon, the unfeasibly hot buses, the £20,000 on going to Afghanistan to avoid the Heathrow vote.

This episode also raises questions about the role and performance of the Charity Commission. There are question marks over Transport for London as well. It has experienced unprecedented cuts to operational funding over the last five years, with its budget reducing by £700 million a year. It has become one of the few transport authorities in the world that do not receive a direct Government grant for their operational running costs. I would like the Minister to address that.

This is a national scandal. It seems that the usual channels of civil servants and the traffic lights system, by which are warnings when things are going wrong, were bypassed here. It feels like this was a vanity project masquerading as a transport scheme. The fact that it was part of a national infrastructure plan makes it sound more like a regeneration scheme than anything to do with transport. The Hodge report suggests that the sequencing of all the decisions was in tune with electoral cycles rather than anything else. This waste of money on something only tangentially to do with traffic should be seen against the background of austerity, too.

There are implications for other big concerns and projects such as Carillion and HS2, which goes through my seat. There are question marks over the Thomas Heatherwick partnership, which is perceived as greatly favoured in a lot of these contracts nowadays. I am thinking of the Olympic stadium and the new Routemaster buses—the “cauldron on wheels” buses as they have been called. We need to look at the public sector’s use of poorly regulated charities to deliver capital projects, because there is real lack of accountability.

So since the last debate in 2016 there has been a huge volume of new evidence. I would like to know from the Minister whether we can have a fresh inquiry with fresh eyes now that the final bill has come in. There seems to be a merry-go-round involving Arup and others, with people who are trustees also regulating the companies involved and the same companies being awarded contracts.

This floral tribute and unbuilt bridge was meant to pay for itself. Fantastic promises were made, but the local group Thames Central Open Spaces, which I have met, was ringing alarm bells from back in 2014, and it had some success in getting the land listed as an asset of community value.

I ask the Transport Minister why the business case was never really made. Some £60 million of public money was agreed. This is something that I will not lay at the door of his boss whose name rhymes with “failing”, because fortunately that particular Secretary of State did have the foresight to pull the plug on some of this money, but there is a feeling that favoured providers were being fattened up. There seems to be a circular route whereby if we want to, we can set up a charitable arm’s length trust with its opaque governance structures and give all the jobs to our mates and so forth. The regulation is very shady; there is no clear accountability structure here. TfL says it is the Government, and the National Audit Office can only narrowly investigate bits of the Department for Transport and cannot investigate TfL. The GLA has no teeth to investigate TfL. The Public Accounts Committee is now saying that it has done its bit and that this is one for the London Assembly. We are all being led a merry dance, or perhaps led up the garden path. This is a masterclass in buck-passing.

We should be aware that other big projects are going to be funded through this same structure, including the Crystal Palace park and, I think, the national holocaust memorial. Those are great, laudable projects, but we need to ensure that accountability procedures are in place. I mentioned HS2. The garden bridge did not even have the advantage of shaving time off the journey to Birmingham. People saw it as having no direction or purpose.

Was this a complex web of corruption, lies, deception and cover-up, or was it a comedy of errors involving negligence mixed with a touch of arrogance and hubris stemming from a fragmentation of confused responsibilities? Whether this was a cock-up or a conspiracy, lessons must be learned in relation to oversight, because a £40 million-plus mistake is a big mistake to make. This should not be taken lightly. Will Hurst from the Architects Journal has said that

“heads should roll over the Garden Bridge but the odds are they won’t”.

There are wider questions about TfL. As I have said, its resource grant has been massively cut. There are also issues about the mishandling of Crossrail, which is now running over budget and over time. It will come through my seat, and my constituents want to know whether it is ever going to happen.

Throughout the garden bridge project, there were constant shortfalls between stated income and real balances. The unforgivable thing was the £24.1 million construction project that was committed to before ownership of the land, funds or permissions were in place. This all happened the wrong way round. Cart before horse; the sequencing was all completely wrong.

I have a couple of questions for the Minister. The National Audit Office report made a series of recommendations about the Department for Transport’s decision-making processes. Have any consequences flowed from that report? Why were DFT officials ignored when they said that there was too much funding for pre-construction activities? We need to see a chain of command between DFT and TfL, because it is not clear what was going on in terms of oversight responsibilities.

We live in an age of freedom of information, social media, public inquiries, televised hearings and investigative journalism, so these kinds of rigged procurement processes involving dodgy competitive tendering and taking things off the books will be noticed now. It is not good enough to have cabals, cliques and the old pals act. I am grateful to Tom Copley, Will Hurst, Peter Walker, Thames Central Open Spaces and Dan Anderson for helping me to illuminate this murky garden bridge fiasco. I have learned a new term this week—“spaffed up the wall”. I learned it from our former Foreign Secretary. Politicians are usually seen as being in it for themselves, incompetent or out of touch, but here it looks as though all three were applicable. I look forward to the Minister’s response, and I hope that we can ensure that these things never happen again.

I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate. I have to say that I think she has seen a lavish amount of conspiracy in this issue. She made comparisons with Suez and various other things which were, frankly, a little overblown. I have written down terms such as “rigged processes” and “mates’ rates”. Those are quite strong accusations, and I will comment more on them later, but I think it is important that we do not lose perspective.

I recognise, as did the Secretary of State and my ministerial colleagues at the Department for Transport, that the garden bridge is a subject that has always divided public opinion. I also remember that debate of about three years ago where strongly held views were expressed, both for and against, by people sitting next to each other on the Opposition Benches. This is a disagreement between neighbours as much as anything else. I do not think we can regard it as a political matter. It was a project that could have added a significant extra dimension to our already magnificent capital city.

Let me start at the beginning by explaining why the Government decided to support this iconic and novel project. The previous Mayor of London was approached, some years ago, with an idea for a completely new type of bridge: a footbridge, but one that was also a park; a place where people could cross the river as part of their journey or stop and enjoy their surroundings and the magnificent river views that this city presents. The then Mayor and Ministers considered that it could be an innovative and iconic project, but they did not believe that it should be wholly taxpayer funded. However, they did agree to help with some funding to kickstart the project and stimulate private sector funding. The Chancellor therefore announced in the 2013 autumn statement that the Government would provide £30 million towards the project as long as the Mayor contributed a similar amount and as long as a satisfactory business case showed that it would deliver value for money for the taxpayer.

The Garden Bridge Trust and Transport for London produced a business case in early 2014, and the Department for Transport analysed it carefully in the same way that it does for any other transport project. While the project was highly unusual and had a wide range of potential cost-benefit ratios, our analysis showed that there was a reasonable chance that it would offer value for money for the taxpayer. The hon. Lady asked whether the process was followed, and it was, but it was tough to cost and quantify the potential benefits.

In the light of the analysis, the Department agreed to release the £30 million pledged by the Chancellor but, importantly, we attached a number of conditions to it, including a cap of around £8 million on the amount of Government money that could be spent on pre-construction activity. That condition was designed to limit taxpayer exposure in the event that the project did not proceed. We also included a requirement for TfL to draw up a detailed funding agreement with the trust to govern how the money would be used. Over time, and in response to requests from the trust, the cap on the Government’s exposure was increased in stages to £13.5 million as circumstances changed and it became clear that more money was needed to get the project to the point at which construction could start.

Does the Minister think that the £3 million a year running costs being financed by events on the bridge was a good model? Does he agree that that would have been doing things the wrong way around?

This was a very individual project, and it could have been a captivating addition to London’s already captivating centre. I could immediately see why organisers would consider such a venue as location for events, so I could see how those income streams could be developed. However, it is a challenge to decide how to use the initiative and ideas that come from campaigners, architects and designers and the good will of the charitable sector, with Government support in a public-private partnership, to deliver significant public good.

I am sorry that the project has not materialised, but we cannot say that an approach that brings people together should never again be used, because I can foresee circumstances in which it could, and possibly should, happen again. The hon. Lady mentioned certain projects, and although I am not particularly familiar with the detail of the Crystal Palace proposal, I am absolutely certain that initiatives that come from the creativity of community involvement, by bringing people together and using the Government as a means of leverage, either financial other through ministerial engagement, are part of what the future can look like. We should not rule that out, but if public money is involved, we should make sure that we learn the lessons, to which I shall come later in my speech.

In 2016, the Garden Bridge Trust asked the Government to underwrite the project’s potential cancellation costs. Let me be clear: that was not a request for additional funding; instead, it was a request to be able to use some of the £30 million that we had already committed, to pay the project’s cancellation costs, should that be necessary. The trust said that without such an underwriting guarantee, the project could not continue. After careful consideration, in late May 2016, the Department agreed to provide a time-limited underwriting guarantee but, again, with various conditions attached, including a requirement for the trust to provide more regular reports to the Department on the status of the project and the steps the trust was taking to address risks.

Over the summer of that year, as a result of further delays to the construction timetable, the trust asked whether the underwriting guarantee could be extended beyond the end of September 2016. Again, after consideration, the Department agreed that it could, but in such a way that the risks would be more fairly shared between the Government and the bridge’s private sector backers. To be precise, the Government agreed to underwrite up to £9 million-worth of cancellation costs, and it was intended that the private sector would be required to underwrite any additional cancellation costs above that amount.

The Government continued their support for the project and wished it well, but they always made it clear to the trust that it should not just be public money at risk should the project fail. Unfortunately, the garden bridge trustees took the difficult decision in August 2017 that, without the necessary guarantees from the current Mayor of London, the project could not continue and the formal decision was taken to close the project. Since then, the trustees have been negotiating with their creditors to close down the trust in an orderly fashion.

Transport for London has been working with the trust to satisfy the Department and itself that every £1 of public money spent on cancellation costs is absolutely necessary to support the project’s claims. I understand there are many concerns about the project, and I will talk about some of them. The Garden Bridge Trust was set up in 2014 to manage the construction of the bridge, and the experienced group of trustees was wholly responsible for the development and fundraising. The Department for Transport and Transport for London spoke to the trust on a regular basis about progress and concerns.

I understand that the hon. Lady and other hon. Members have expressed concerns about how the trust was being run, how public money was being spent and how much transparency there was on the project, but it would be wrong to say that nobody has scrutinised the project. There have been several reports and investigations into the project. The London Assembly has reviewed the procurement process. The National Audit Office has reviewed the project and reported on the Department’s grant control measures in 2016. The Charity Commission has looked at how the trust was run as a charity and reported in 2017.

The Minister is detailing all the different reports, but we need one now that we have the final winding-up costs and the final bill. Those reports are historical. This looks like another white elephant, and I did not mention the cable car, which is another one. This is a whitewash of a white elephant.

I have mentioned investigations by the London Assembly, the National Audit Office and the Charity Commission, which clearly were not whitewashes. These are independent bodies. The hon. Lady has mentioned mates’ rates and closed groups, but the head of the Garden Bridge Trust was a former Labour Minister, now Labour peer, who was dealing with a Conservative Mayor of London. I do not view this as some closed, chummy, “old school tie” thing, which is what the hon. Lady is suggesting. I do not think the facts are remotely like that.

There has never been any secret about the investigations, and the fact that they have taken place demonstrates the robust scrutiny that has applied to this project to ensure that it was run properly and that we got the best value for taxpayers’ money. It is because of those inquiries that I do not think it necessary to have a new inquiry.

The Department for Transport continues to scrutinise the use of public money in spending decisions robustly. Clear safeguards were included in the garden bridge project on how and when the money could be spent to limit expenditure should the project fail. The hon. Lady asks about lessons learned, which are important for anyone who has responsibility for public finances. It is quite a difficult question, because this is such an individual project, but there is the principle of control of money. The Department has, for example, changed the way it handles rail development projects by introducing the rail network enhancements pipeline—the RNEP process—to ensure that projects cannot proceed to the next level of development until it is clear what the funding implications are. There is always, then, this iterative process of review and of lessons being learned from experience and new developments. Of course we learn lessons.

There are also processes for sharing good practice. There is a transport efficiency project whereby different parts of the Department share best practice to see whether lessons can be learned in the development of rail that could be applied to road, and vice versa. I would caution the hon. Lady, therefore, about saying that no lessons have been learned. Learning lessons is an existing part of standard DFT procedure and—I would hope—of every other Department and public body.

As the hon. Lady may be aware, the sum spent on cancellation liabilities will be significantly less than the £9 million made available, meaning that more of the funding originally allocated can be returned to the Department to be spent on other transport projects.

In conclusion, I understand the concerns raised by the hon. Lady and others who have spoken today and previously and I recognise it is unfortunate that public money has been spent without the project coming to fruition, but despite people’s best efforts projects sometimes do not achieve their potential. The decision to support the project was taken with the view that it would be successful. It did not fail to capture the public imagination. It might have polarised it, but some clearly saw how it could enhance an already magnificent cityscape.

My Department will continue to scrutinise funding decisions and make sure we continue to deliver value for taxpayers. That is a regular part of all that we do. It has not been compromised by this project and will remain a part of all our future project management.

Question put and agreed to.

House adjourned.