Oral Answers to Questions

Debate between Rupa Huq and Andrew Jones

Thursday 2nd May 2019 Commons Chamber

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I think this a bit tangential to punctuality, Mr Speaker, but I might try to get it in. [Hon. Members: “Give it a shot.”] Will the Secretary of State honour the pledge he made to me on 17 July 2017? I realise that that is not a punctual request, but now is the time. I asked him about the mutual mistrust between NW10 residents and HS2, and he said that his door would always be open. Now that construction has started, they feel as though they are living in a war zone, a dustbowl and the longest and largest building site in Europe. So will he make a visit or sit down with me and my constituents to sort this out?

[Andrew Jones]

Yes, there was a little bit of a tangent in that question. I am not the HS2 Minister, but I can, having just checked with the person who is, say that she will be happy to meet the hon. Lady. We will set that meeting up soon.

Garden Bridge: Funding

Debate between Rupa Huq and Andrew Jones

Friday 15th March 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

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.

[Dr Huq]

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?

[Andrew Jones]

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.

[Dr Huq]

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.

[Andrew Jones]

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.