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Sadiq Khan slammed over £20m Garden Bridge ‘loan’ deal

Garden bridge revised

Sadiq Khan’s financial argument for backing the Garden Bridge during his first year as London mayor has been ridiculed after it emerged that Transport for London (TfL) had described its £20 million loan to the charity developing the scheme as a ‘gift’ 

While campaigning for office in 2015, Khan announced he was dropping his opposition to the Heatherwick-designed scheme thanks to an agreement struck between Lambeth Council leader Lib Peck and the Garden Bridge Trust.

The much-trumpeted deal, announced in November 2015, supposedly made the then £175 million crossing better value for Londoners by converting £20 million of TfL’s £30 million of financial support from a grant into a loan.

On his election in May 2016, Khan pointed to the eventual repayment of this loan, claiming it would cost taxpayers twice as much to cancel the Garden Bridge as to complete it.

However, an internal TfL report seen by the AJ has now revealed that the transport body – which the mayor chairs – regarded the repayment terms of the 50-year loan as so generous to the trust that TfL might come to regard its loan payments as ‘gifts’.

The report was written in February 2016, three months’ before Khan’s election, by the senior officer in charge of the project, Richard de Cani, and sent to TfL bosses including commissioner Mike Brown.

It stated that loan monies would be repayable to TfL from five years after the bridge opened to the public, with the trust needing to make minimum payments of £250,000 a year and the balance of the loan increasing at a rate of inflation equal to average RPI (Retail Price Index) but capped at 2 per cent.

The report added: ‘In practice, these loan repayment terms are somewhat generous and may well at some point be accounted for by TfL as gifts.’

Nevertheless, Khan claimed shortly after his election that while cancelling the bridge would cost taxpayers £37.7 million ‘for no benefit at all’, completing it would mean ‘our loan is repaid in full then the ultimate cost to taxpayers will be under half that cost at £18 million.’

Khan continued to make this financial argument for 11 months in the face of the project’s spiralling budget as well as strong political opposition to the Garden Bridge from many in his own party. Eventually Margaret Hodge’s excoriating report prompted the mayor to withdraw his support in April 2017.

The full £20m was paid to the Garden Bridge Trust in installments and there is no prospect of it being recovered, the AJ understands.

Tory London Assembly member Andrew Boff – one of three on the shortlist to become the Conservative candidate for London mayor in 2020 – accused Khan of flip-flopping while the Garden Bridge Trust spent millions on the scheme.

‘The mayor spent a year not quite sure what side he was on,’ Boff said. ‘He doesn’t reach decisions easily and he is not quick to act.

‘There was no need for a delay in putting this project out of its misery and, in the meantime, the Garden Bridge Trust spent up to £9 million of taxpayers’ money.

‘I want to know what figures he was using when he said it would be cheaper for Londoners to complete the bridge than to cancel it.’

Fellow Tory Steven Norris, a former transport minister and mayoral candidate, accused Khan of ‘cynical’ behaviour in backing the Garden Bridge against the interests of Londoners.

He said: ‘It now appears that Sadiq’s tactics, having recognised once elected that many significant Labour voices were in fact in favour of the bridge, was to claim that he would have wanted to cancel it but could not, thus attempting to mollify both camps.

‘This was a cynical approach to an already regrettable state of affairs. Sadly it is he who now must share part at least of the blame for the fiasco that was the Garden Bridge project.’

Meanwhile Lib Dem and chair of the London Assembly’s transport committee Caroline Pidgeon said the emergence of TfL’s internal report underlined the body’s ‘total lack of proper process and respect for taxpayer’s money in relation to this doomed project.’

She said: ‘While Sadiq Khan was boasting that the £20 million loan agreement with the Garden Bridge Trust would cut London’s taxpayers’ contribution to the Garden Bridge, a senior TfL officer was making it quite clear to the trust that it was money they could almost certainly keep.

‘If the mayor wants to deliver on his pledge to lead the most transparent, engaged and accessible administration London has ever seen, he should start providing answers as to why he was publicly saying one thing while TfL – which he chairs – was saying the complete opposite.’

A spokesperson for the Mayor of London said: The Mayor has always said he would not agree to any more of London taxpayers’ money being spent on the Garden Bridge, and no taxpayer money controlled by Sadiq has been spent on the project since his election.

‘Following correspondence with the Garden Bridge Trust and looking at the detail at Margaret Hodge’s independent review, the Mayor’s view was that continuing with the project would have exposed the London taxpayer to too much additional financial risk.’

Comments

Dan Anderson, tourist attraction expert at consultancy Fourth Street

Anyone who read the fine print of that loan agreement at the time could tell that it was the softest of soft loans, but to see it described so candidly in an internal TFL document as “a gift” is still a little galling.

It was all just political theatre and financial sleight-of-hand. Sadiq Khan and Lib Peck did themselves no credit by indulging the fantasy that this was in any way a real loan that served the taxpayer’s interest. 

Readers' comments (9)

  • Meanwhile the promoters of the wretched bridge continue to coin it at the public's expense. Sadiq is the least of the culprits though he has done himself no favours in this episode.

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  • Agree with Simon. Yes Kahn has been a bit flip-floppy but that was probably genuine uncertainty as what would be the best thing to do with the utter mess that Johnson left him. Ultimately this shower sits with Johnson personally, his deputy mayor, the garden bridge trustees and (a reluctant inclusion) Heatherwick. God help our economy if imminent events lead to BJ's installation as PM.

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  • Hmm, the politics or architecture.
    If that crooked BJ is 'installed' as the PM, without our vote, we should all leave this island, let it drift away with him. The last person to jump off switches off the lights, and we stay in Europe... Just a thought before lunch...

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  • If Sadiq 'does a Boris' and indulges in sideways flip-flops he'll be doing himself no credit at all, but the Hon Boris Johnson - creator of dodgy buses, Foreign Secretary (retired) and minister for Heathrow's third runway plus the glorious benefits of Brexit - is a grubby chancer, and Sadiq isn't.
    But could the bigger concern be on the possibility that the history of the garden bridge affair - and this 'gift' - does more than hint at corrupt practices within the TfL establishment, floating about below the radar and maybe not a 'one off'?

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  • And has Cllr Peck tendered her resignation in the expensive and sorry saga? Or does she, like so many involved in this murky project, have no dignity or respect for public office?

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  • In this one vignette De Cani and TfL display all the disregard for the public and our money of this entire shambles. We pay them huge wages (£600k to Hendy at the time) to manage and improve London’s transport while protecting the public purse, and their first job should be to bat away the outlandish and self-regarding projects ocassionally thrown at them by very interested individuals.

    But TfL was overseen by an elected huckster who had inverted that relationship and saw the Mayorality as his personal stepping stone to the Premiership, using it to promote exorbitantly expensive pet projects which he hoped would promote him.

    It was the overpaid senior officer’s duty to minimise the damage of this huckster, just as anonymous aides in the White House are reportedly doing at this moment with Trump. Instead they simply fell in with the huckster, getting overpaid to waste public money on baubles like the Garden Bridge – some of them even flouncing off to work for the purveyors of this outlandish and self-regarding bauble.

    Despite thousands of years of history to learn from and all the advantages modernity brings, when it comes to administration we haven’t really progressed beyond the Romans.

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  • Spot on, Mr Ball.

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  • The history of this 'loan' was that Lib Peck (having been foolishly suckered in by Lumley and Heatherwick personally lobbying her in Jan 2013, before any detail was understood) found herself under intense pressure from thousands of angry residents in Waterloo and across Lambeth asking why a Labour administration was supporting this huckster's folly? So in Sept 2015 she did what her senior officers should have done in Jan 2013, and used Lambeth Council's powers as landowner to block the whole project. Senior TfL officers reacted extremely aggressively with barely veiled financial threats to Lambeth... and cooked up the 'loan' fudge with a fearful and cornered Peck, and with Sadiq claiming some credit for the deal at the time (although Peck was obviously a bit miffed about that, especially as much of Lambeth Labour were Tessa supporters: Labour had yet to determine their candidate for the coming Mayoral election).

    So the ‘loan’ claim was very much a fudge for Peck to hide behind. It’s odd that Sadiq sought to align himself with it given the coming storm, about which he was clearly warned. But in my view Sadiq then played well the very difficult hand left him by his predecessor the huckster, and the huckster’s officers.

    The anti-Bridge campaign gave Sadiq all the information about the financial and political mess of this project 6 months before his election. He was told that underwriting the maintenance – a requirement of the planning permission – could ultimately cost the public purse £100m or more, and there would likely be significant funding gaps for construction. He could have – and with hindsight should have – announced during his campaign that he would not spend any more public money on underwriting the running costs. But The Standard was 200% behind the GB, and they were the most significant voice in determining the outcome of the Mayoral election, so it is understandable that he decided not to pick a fight with them over this folly. Alternatively, he could have commissioned a Hodge-like review on his first day in office, rather than wait 6 months. But that would have again put him on a collision course with The Standard. By waiting 6 months, which in reality cost little additional public money (since most of what was lost had already been committed by the huckster), he allowed it to be slowly hoist by its own hubristic petard, as the inability of the cavalier Garden Bridge Trust to raise anywhere near the necessary funds became ever more evident.

    Sadiq’s desire to take some of the credit for negotiating the ‘loan’ is probably the biggest stain on his copybook. Peck on the other hand mis-stepped all the way, led on by her own senior officer determined to get that Heatherwick feather in her cap. TfL's senior officers (and Mike Brown is still there) revealed themselves as overpaid glorified yes men, incapable of even acting as doorkeepers.

    And the huckster? Well, we all take the blame for his venal existence, as, ironically, he now shamelessly burns down the European bridge in order to further his march to the top.

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  • The ways in which good governance is currently being corrupted and distorted by rampant populism - everywhere from the White house to the Kremlin - are mirrored in this country by the textbook antics of Boris Johnson, from before Brexit, the third Heathrow runway and the Garden Bridge saga, back when he gained the office of London mayor by promising to ban 'bendy buses' and introduced the Heatherwick designed hybrid things that were supposedly an up-to-date version of the classic Routemaster bus.
    A look at the history of their procurement shows up some remarkable similarities with the unorthodox procedures adopted to push through the Garden Bridge design, and could this have encouraged Boris and Heatherwick in their later endeavours?
    Michael Ball's references to the political clout of the Evening Standard raises the spectre of its current editor, George Osborne, as the 'elephant in the room' in his previous incarnation as Chancellor of the Exchequer. In the (ongoing) 'time of austerity' he was hacking enthusiastically at a vast range of government funding of basic services while helping to finance the garden bridge - perhaps as much cronyism as populism, but his subsequent trumpeting of the concept of the 'Northern Powerhouse' is surely a classic bit of pure populism in action.

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