Newly released correspondence has revealed Boris Johnson’s doubts over £30 million grant and underwriting maintenance costs
More from: TfL probe defends Garden Bridge procurement
The mayor of London, Boris Johnson, had serious misgivings about the cost to taxpayer of constructing and maintaining the £175 million Garden Bridge but was persuaded to stand behind it by ‘austerity’ chancellor George Osborne.
The Thomas Heatherwick-designed bridge is now to be funded by £60 million from the public purse – £30 million from Transport for London (TfL) and £30 million from the Treasury – while Johnson has agreed to underwrite the £3.5 million annual maintenance cost.
However, letters between Johnson and Osborne, obtained by the AJ under Freedom of Information (FOI), reveal that the mayor initially recommended ‘underwriting’ rather than contributing to the construction cost, and said he wanted to see the public sector contribution ‘recovered over time’ through post-completion fundraising by the charitable trust developing the scheme.
Johnson also told the chancellor he had no intention of underwriting the ongoing maintenance costs.
But Osborne – who described the project as ‘iconic’ – encouraged Johnson to make TfL’s £30 million contribution a grant rather than a loan, and said the mayor should underwrite maintenance costs if private support could not be found, describing it as a ‘small funding requirement’.
In a letter dated the 7 August 2013, four months before the £60 million public contribution was announced, Johnson wrote: ‘A government underwriting of around the £100 million figure we discussed would be an invaluable contribution to what I think is a very exciting scheme.’
But when he wrote again on the 28 January 2014, Johnson’s position had changed and he said he was ‘happy in principle’ to match the government’s £30 million contribution.
However he added: ‘As we discussed previously, I would like to see the fundraising activities of the Garden Bridge Trust continue beyond completion of the Garden Bridge to ensure that the public-sector contributions are recovered over time … the maintenance of the Garden Bridge will be a core function of the trust and I should clarify that I am not intending to underwrite maintenance costs.’
In a note at the end of the letter, the mayor suggested the City of London Corporation’s charity might help, adding in his own handwriting: ‘Can’t we get the City Bridge Trust to do the maintenance?’
Five days later, Osborne replied, agreeing that the City Bridge Trust and other potential funding sources should be approached but added: ‘It is vital that the bridge is properly maintained and so if the necessary level of private support cannot be found I would encourage you to stand behind this small funding requirement.’
He added: ‘I was surprised by your proposal that TfL should offer to loan the Garden Bridge Trust £30 million rather than to provide this as a grant. I imagine that providing this support as a loan rather than grant will make the job of fundraising even more difficult, which presents an unnecessary risk to the success of the project. I will therefore be paying the government’s contribution as a grant and believe you should do the same.’
The last four words of this sentence were underlined by hand.
Architect and former chairman of the RIBA procurement reform group Walter Menteth, who has previously raised concerns about the procurement of the Garden Bridge, said: ‘These letters reveal the austerity chancellor who is willing to fund an icon. He wants to fund a cocktail party bridge over social need. These two members of the Bullingdon Club are determining major public expenditure without any accountability or input from anyone else.
‘George Osborne seems to regard the Garden Bridge “icon” in the same way as he regards functional infrastructure despite not having any evidence that it meets any of the same functional criteria.’
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: ‘These remarkable letters show just how absurd it is that the government is pushing ahead with this costly vanity project despite the over-arching goal of bringing spending down.
‘It is deeply concerning that the chancellor has also suggested that cost over-runs and maintenance costs will be picked up by taxpayers if ongoing private funding cannot be found – which, at this point, seems the most likely scenario. This flies directly in the face of the mayor’s public assertions that the TfL contribution would be capped and that additional ongoing costs would be picked up by the trust.
‘Taxpayers deserve to know how much this bridge – which barely functions as a bridge – will cost them in the long run, and the reasons that the chancellor is so keen on the project in a period of austerity.’
Caroline Pidgeon, Liberal Democrat leader in the London Assembly and a leading Garden Bridge sceptic, said: ‘This latest discovery reveals just how much Boris Johnson has had his arm twisted by George Osborne. The mayor of London was absolutely right to oppose not only TfL picking up the maintenance costs for the Garden Bridge, but also objecting to grant funding for its construction. Why the mayor backed down on these issues is just one of the many questions he must now answer over the Garden Bridge.’
Last month, outgoing TfL boss Peter Hendy confirmed, in a letter to Pidgeon, that he had ordered a review of the procurement of the Garden Bridge designer. This followed an FOI investigation carried out by the AJ, which has sparked accusations that the process was ‘pre-judged’ as a result of lobbying of the mayor by Garden Bridge backer Joanna Lumley.
Comment from Garden Bridge Trust
‘The Garden Bridge Trust is a charity responsible for raising £175 million for capital cost of the project and £2.8 million per year for maintenance and operations costs of the Bridge, which will be open 365 days a year, and free to all. We have shared our business plan with the Mayor, both parties are confident that the Trust can raise the funds needed for the maintenance and operations of the Bridge. It is on these conditions the Mayor has granted the guarantee, which has been shared with the City of Westminster and Lambeth Council.
‘The Trust have already raised £67 million in funding from the private sector, charitable trusts, and individuals in barely 18 months, which is an extraordinary achievement. It shows just how much support there is for this unique new green space and river crossing. We are on course for commencing construction in early 2016 with a view to opening the Bridge to the public in summer of 2018.’
Chancellor urged mayor to fund Garden Bridge
Chancellor urged mayor to fund Garden Bridge