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Khan: It's cheaper for London NOT to scrap the Garden Bridge

  • 5 Comments

London’s new mayor has said going ahead with the £175 million Garden Bridge would be a better use of funds because £38 million of public money has already been spent

Speaking at his first Mayor’s Question Time event at the London Assembly today, Sadiq Khan said the Garden Bridge Trust had already received £24.25 million in Transport for London (TfL) funding out of £30 million in pledged financial aid, and £13.45 million of a £30 million Treasury aid package.

Khan said that £20 million of the TfL funding was a loan that would be repaid if the bridge completed, while the Treasury would receive £22 million in VAT, which would mean the public contribution to the project amounted to just £18 million.

‘If we were to cancel the project today, that full amount would have been spent for no benefit at all to Londoners,’ he said. ‘If we complete the Garden Bridge then not only will TfL be repaid for its loan, the government will receive VAT from the Garden Bridge Trust. It will result in a cost to taxpayers of £18 million.

‘From the point at which I became mayor, it was quite clear that it would cost Londoners more to cancel the building of the Garden Bridge than it would to finish building it’.

However Khan told assembly members he did have concerns about the procurement process for the bridge – the subject of AJ’s ongoing investigation – and had begun to ’look in detail’ at how the design contracts were awarded in 2013.

‘I’ll be deciding shortly on how I want to take this investigation further and to take forward any lessons learned for future projects,’ he said.

Documents revealed by the mayor last week show that the Garden Bridge has so far recieved £143 million in funding, much of it from anonymous donors.

Responding to a call from Labour Assembly member Tom Copley for further transparency on funding for the bridge, Khan said he would look into whether any of these anonymous donors worked for TfL or were seeking work from TfL.

The Garden Bridge Trust has so far received more than £100 million in private donations, 39 per cent of which is from anonymous sources including two companies which gave £5 million and £10 million respectively.

Khan told assembly members that in return for supporting the project, he had ‘insisted’ the Garden Bridge Trust make a series of amendments to its plans. They include a reduction in the number of days the completed bridge will be closed to the public for private events, and also a reduction in the number of hours for which it is shut.

A Garden Bridge spokeswoman welcomed Khan’s confirmation of support for the bridge’s completion, and said the trust shared his aspiration for greater public access.

’The public money that has been spent so far has been used by the trust to develop the scheme to the stage where we have appointed a contractor, detailed design work has taken place, and the bridge has secured planning permission,’ she said.

‘That work is crucial in enabling the project to secure large investment from the private sector.

‘The £37.7 million of public money that has been spent since the project began includes securing necessary consents, progressing detailed design work, undertaking ground and river investigations, professional fees and developing parts of the bridge off-site.’

  • 5 Comments

Readers' comments (5)

  • £37.7 Million on design fees? consents? and investigations? That is unbelievably wasteful!
    You could have built a whole bridge for that money.
    Given that one of Sadiq's conditions is that no more public money is to be spent on this project, we should all expect him not to sign the underwriting of the £3.5million a year maintenance costs, in doing so would go against his own terms.

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  • That's an awful lot of public money already sunk (apparently 'upfront', as it's stated as 'crucial in enabling the project to secure large investment from the private sector')

    Money spent 'securing necessary consents, progressing detailed design work, undertaking ground and river investigations, professional fees and developing parts of the bridge off site'.
    I wonder what a detailed breakdown of these figures would show? What did the 'necessary consents' amount to, just the local authority planning approvals and (presumably) building consent?
    Or was the project adequately reviewed and consented at a level appropriate to its impact on the centre of London?
    What exactly does 'developing parts of the bridge offsite' cover?

    Given the ex-mayor's propensity of 'cutting corners' in due process (to put it ever so politely) these costs surely need careful and transparent audit. - and then charging to Messrs Johnson and Osborne's account.

    In effect, Messrs Johnson and Osborne would appear to have arranged to load much of a speculative project's financial risk onto the public purse - without having ensured that the nation is in broad agreement.

    Mr Khan talks as if he's not so much supporting completion of this thing as implying that it's too late now, make the best of it, lessons will be learned.

    The lesson's pretty clear - it's remarkable what politicians 'with attitude' can get away with if they hold their nerve and brazen it out against all criticism.
    There was a time when local authority councillors could be surcharged if they indulged in such games, but the law was changed and hopefully Mr Khan is up to speed with how he can avoid being played for a 'patsy'.

    If not, he'll risk losing the initiative - and his credibility. What next, I wonder.

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  • The £37.7m stated as having been expended to date is certainly not justifiable.
    Public repayments that the Major suggests validates this argument is, in real terms & effect, not a loan but a grant. The Loan Facility agreement 13/11/15 for £20m states:
    • 1st loan term starts: 7 months after the Construction Contract Award date. • 2nd loan term starts: 19 months after the Construction Contract Award date.
    • The Term: means the fifty (50) year period during which the Principal Sums must be repaid by GBT to TFL, starting 5 years from the Date of Opening up to and including 55 YEARS FROM THE DATE OF OPENING or such other period as shall be agreed between the Parties; and
    • Repayment: On the final Repayment Date GBT shall pay an amount equal to the outstanding inflated Loan balance, where inflation is applied annually to the Loan at the Rate of Inflation. Rate of inflation: calculated as being a rate equivalent to the average annual RPI. in the calendar year ending in the month in which the Repayment Date falls, BUT NOT EXCEEDING 2%.

    I would ask if anyone has ever come across any such ‘Loan’ before.

    Over the past 50 yrs the Average annual inflation rate was 3.22% ie 1.22% above the quoted rate. So a further public loss. It is worth noting that a value of £20m in 1966 (50yrs) on the basis of subsequent inflation would now be equivalent to £350m today.

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  • The Diamond Jubilee Bridge is in the London Plan, in local authorities development plans, is in the TfL 10-year plan, has planning consent and will start on site within 8 weeks through piling works carried out courtesy of Barratt London - it has cost the taxpayer exactly £0. ZERO.

    The whole bridge could have been built for what has been spent by GBT so far with enough change to keep Lambeth's Library's open.

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  • Mr Khan's calculation that it's cheaper for London not to scrap the Garden Bridge seems to assume that it's just a question for London.

    But it's not - it's surely a question for everyone in this country, and beyond - London's not just 'any old place' - it's very much at the centre of what this country is, and in the same way that Mr Johnson 'curated' the Olympics on behalf of the world, rather than just London, any mayor is saddled with the responsibility of being the guardian of our capital city on behalf of everyone, not just those of us who inhabit London.

    The wider significance of the garden bridge project is reflected in the financial support from the Chancellor of the Exchequer, and - I suspect - from some of the anonymous donors, who should surely all be identified.

    If the calculation were to include a figure for the benefit or loss to the character of the river, what then?
    It would be difficult to value the bridge as an essential and reliable addition to London's infrastructure, as there'll be no Right of Way - it most definitely won't be a 'public highway'.

    Some people would apparently value it as 'eye candy', presumably to join the novelty buildings that some of them have created.

    But should the recent fashion for quirky additions to the city's horizon be extended to a quirky bridge over the river?

    How should the full impact on the character of the river be valued?

    If built, would it really be valued as a great asset to the 'London scene', or come to be resented as an intervention too far - maybe much too far, a monument to excessive hubris in a time of unprecedented selfishness and greed?

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