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.’
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.