The Department for Transport (DfT) plans to ‘claw back’ around £20 million from London government if the Garden Bridge is not built
Earlier this week, it emerged that the National Audit Office had said that public funds have been placed at ‘higher risk’ because Chancellor George Osborne sidestepped normal procedures for approving DfT funding.
Critics are now claiming that London taxpayers are bearing most of this risk after the AJ obtained a letter from permanent secretary at the DfT Philip Rutnam to the chair of the Public Accounts Committee Meg Hillier.
In the letter, Rutnam explains that around £10 million of the £30 million committed by the DfT has already been spent on the project but that the government department would seek to reduce future transport grant payments to the GLA by the remaining £20 million in order to recover the money.
Rutnam wrote: ‘You asked whether the Department could claw back any or all of the £30 million if there was a problem – for example, if the Bridge were not built. As I said, the answer to this, in short, is that the Department can do this under certain circumstances.
‘In making the funding available to the Mayor, we made clear that if, for any reason, some or all of the funds were not needed for the Garden Bridge project, the Secretary of State might decide to take this into account when determining any future GLA Transport Grant.
‘If, for example, no construction contract was let and the project were cancelled, the Department’s liability would be capped at £9.9525 million and the Secretary of State could seek to recover the balance of the Department’s £30 million contribution by adjusting a future GLA transport grant payment downwards by approximately £20 million.
‘Under the relevant legislation, this decision would need to be made after consultation with the Treasury and the Mayor.’
Leader of the London Assembly Labour Group, Len Duvall said: ‘As the details of this deal slowly emerge it looks like London taxpayers are taking on more and more of the risk.
‘Whilst the Treasury were putting plans in place to claw-back the lion’s share of their contribution should anything go wrong, Boris was busy signing London taxpayers up to underwrite yet more of the costs. Not only is London now committed to £30 million in capital funding but the Mayor has also underwritten the £3.5 million a year running costs.
‘The Garden Bridge might be a project which captures the imagination, but the lack of proper process on the Mayor’s part is staggering. Particularly worrying is that Public Accounts Committee have said that a “high degree of uncertainty” remains around the project and that public money is at greater risk than private contributions.’
Leader of the Lib Dem group and the party’s candidate for mayor, Caroline Pidgeon, said: ‘Following the extensive investigations led by Architects’ Journal it is incredible to discover from the National Audit Office how the Mayor took such a massive risk with London taxpayers’ money in pouring so much cash into this project at such an early stage of its development.’
A spokesperson for the Mayor of London said: ’The Mayor has every confidence that the Garden Bridge will be completed and that it will be a spectacular new addition to London. Work on building the bridge is due to begin this year and it is widely supported by Londoners and businesses on both sides of the river.’