With the Garden Bridge Trust now 90 days late in filing its accounts, Dan Anderson sifts through the evidence that is available to try and find out how £46.3 million of public funds was spent with nothing to show for it
As of today, the Garden Bridge Trust (GBT) is 90 days past the deadline for filing its accounts with the Charity Commission and is now also late in filing with Companies House. In the absence of these accounts, it is natural for people to ask: ‘Where did all the money go?’
In fact, we know quite a bit. As a specialist in new visitor destinations, who gradually became a critic of the Garden Bridge, I have sadly gobbled up every morsel of information that Transport for London (TfL) and the Greater London Authority (GLA) have provided through piecemeal responses to Freedom of Information (FOI) requests. Eventually, a picture starts to form. This is what we know:
First, a general point about the final bill, which is likely to end up at around £46.3 million.
Most of the expenditure on the Garden Bridge was authorised by then-mayor Boris Johnson through Mayoral Decision MD1355 (27 June 2014). Johnson directed TfL to provide the GBT with £60 million of public money — funded equally by TfL and the Department for Transport. Specifically, the decision says: ‘The government has agreed … to make a £30 million contribution towards delivery costs and the mayor has agreed to match this with an additional contribution of £30 million.’
However, MD1355 contained within it a crucial clause to protect the public purse. It goes on to say: ‘Payments to GBT will be staged to cover pre- and post-construction contract award activities, with conditions to be met before funds are provided. It is proposed that around £8 million each will be provided by TfL and the government in the precontract phase; if the project does not proceed beyond this stage, this funding will be at risk.’
In plain English, that clause is there to say the following: Any number of risks could thwart the project. The GBT may not be able to secure the land. It might not get a full planning consent. It may not raise enough private money to build or operate the bridge. We are willing to put up to £16 million of taxpayer money ‘at risk’ to resolve all of these ‘preconstruction’ issues. If the GBT gets to a position where it can let the construction contract — because who would award a construction contract if they weren’t ready to start construction? — then we will release the rest of the money.
That was a sensible precaution. It was intended to cap the taxpayer’s exposure to preconstruction risk at £16 million. It was then given more detailed expression in TFL’s funding agreement with the GBT, which specified the seven conditions that the GBT would need to satisfy.
Yet here we are (Figure 1) — more than £46 million spent and no bridge. What went wrong?
The clearest way to think about expenditure on the Garden Bridge is to break it down into its three main stages:
- Expenditure by TfL before the GBT took over
- Grant payments made to the GBT after the funding agreement was signed
- Outstanding liabilities faced by the GBT since the project was cancelled
Direct expenditure by Transport for London
We know most about what happened in that first phase of spending because a full record of invoices was released by TfL in response to an FOI request (FOI-1243-1718). This amounts to some £9.7 million spent by TfL while the trust was still being formed.
The most striking observation about the detail of this expenditure (Figure 2) is how much money went to a single company: Arup.
As the lead consultant on the project, Arup no doubt carried the cost for a range of subcontractors, including Heatherwick Studio, which by the end of the project expected to earn some £2.7 million.
Even so, there is no question that Arup had an extraordinary financial stake in the Garden Bridge and its continuation. This is problematic because of the ‘revolving door’ suspicions that would later dog the project. TfL’s then managing director of planning Richard de Cani, would later be involved in critical spending decisions, after having accepted a new position at Arup (Figure 2).
Grant payments to the Garden Bridge Trust
The Funding Agreement between TfL and the GBT was signed in July 2015. That is when the GBT took over full responsibility for the project’s spending.
The detail becomes murky after that point. As a charity, the trust is not subject to the Freedom of Information Act and has been consistently late in filing accounts. TfL officers regularly attended the trust’s board meetings but, astonishingly, did not maintain a record of their minutes (FOI-1144-1718).
It is, however, possible to track the rate at which the TfL grant was paid out (Figure 3).
From July 2015 to March 2016, TfL released £27 million of grant funding to the trust. About £3.4 million was spent on legal, property and planning advice, but a full £23 million was spent on:
- Progressing the design
- Obtaining licenses, permits and planning approvals
- Selection of trees and plants
- River survey and ground investigation works
- Procurement of contractors
- Placing orders for materials
How that can amount to £23 million in just nine months remains something of a mystery, even to the TfL and GLA officers closest to the project. An exchange of emails in August 2017 between the GLA’s executive director of development, Fiona Fletcher-Smith, and TfL’s Andy Brown, reveals just how little they knew about how the GBT was spending its grant:
FFS: ‘Anticipating further questions, is there a schedule of payments from TfL to show how much grant was paid at each point and when the payment was made? Also, are the trust able to provide detail on what they actually spent our grant on (presume it is mostly salaries?)?’
AB: ‘I don’t have a detailed breakdown of what the trust spent their grant on but I think it is mostly professional fees for eg Arup, Bouygues, lawyers and other consultants.’
Note that a common complaint from applicants to other grant-giving bodies (eg Arts Council England, Sport England), is that the monitoring process is too onerous. These funders are routinely accused of micro-managing projects, expecting regular updates on how the money is being spent. That TfL did not come close to that level of scrutiny is another lesson of the Garden Bridge: TfL is not a fit-for-purpose grant funder of any mayor’s whimsical pet project. It shouldn’t be used that way.
We do know that 40 per cent of this spending came after the GBT awarded the construction contract. The letting of that contract has thus become controversial. It not only triggered the release of another £10 million in grants but is also the cause of the resulting termination costs that will likely add another £9 million to the bill. It was, in other words, a £19 million decision that has never been properly explained.
Remember that the Funding Agreement and its ‘parent’ Mayoral Decision were both predicated on the GBT satisfying a set of conditions before further funding could be released. Officials at the DFT never accepted that those conditions were satisfied. The National Audit Office was highly critical of the decision in its report, and Margaret Hodge didn’t mince words about it in hers:
‘I am shocked that the trust entered into this financial commitment with so many issues unresolved,’ she wrote, ‘and it is astonishing that the mayor, TfL or the Department for Transport did not stop the trust from signing this contract.’ (p30)
Despite repeated requests from the London Assembly, TfL Commissioner Mike Brown has never explained how Richard De Cani and his colleagues satisfied themselves that the funding conditions were met. Brown wrote to the Chair of the London Assembly Oversight Committee only to say: ‘We considered the evidence supplied [by the GBT], as well as the wider information we had available on the status of the project from our regular progress meetings with the trust, and determined that the conditions of payment had been met.’
That’s it. That’s the most complete explanation that we have about a £19 million decision that went horribly wrong. You have to admire the chutzpah.
While this nebulous statement patently failed to answer the committee’s question about ‘criteria and processes’ , it was enough to give Johnson the cover he needed to dodge some important questions when he was summoned to give his own evidence to the committee. When questioned by assembly member Tom Copley about the continued release of funding, the former mayor repeatedly quoted these lines from Mike Brown, as if they were the final word on the matter. It was a revealing insight into how one misleading statement can be used to support another until our flimsy grip on the truth is just lost in the fog.
Project termination costs
The final stage of expenditure relates to the trust’s outstanding liabilities when the project was terminated. This will amount to some £9 million.
These costs are significant because they were incurred after the May 2016 election. Johnson and his Conservative allies on the London Assembly have therefore suggested that this can be attributed to his successor Sadiq Khan’s year-long prevarication over the project.
That theory is not, however, supported by the facts. Most of the final £9 million is a direct consequence of the trust’s precipitous decision to award the construction contract. TfL’s Andy Brown says this plainly in an August 2017 post-mortem email.
‘The Trust’s main needs for the £9 million are:
- To pay contractual termination payments to their contractors – primarily Bouygues
- To pay back private funders who had agreed to release grant money before the beginning of construction, on the condition that it be paid back if the project never made it to construction – I have never been given a list of these funders.’
By the end of June 2016, according to another email from Andy Brown, ‘pre-construction fabrication [was] already underway’.
In other words, the trust began to incur these liabilities from the moment that it awarded the construction contract – under Mayor Johnson. Correspondence between TfL and the DfT confirms that at least 80 per cent of the liability was incurred by the middle of July 2016 – less than three months into the new mayor’s term – and it was fully spent by the end of September.
Short of cancelling the project on his first day in office, there is little that a new mayor could have done to limit this cost. Even if Khan had initiated the Hodge Review in his first month in office, most of the £9 million would have been spent before it reported.
Perhaps the most incredible thing about the whole Garden Bridge debacle is the fact that no one involved with it has uttered the faintest mea culpa, much less faced any material consequences.
Context is everything. Some have trivialised the Garden Bridge scandal by setting it in the context of total TfL spending. It is true that a £46 million write-off amounts to little more than a rounding error when lost in the scale of TfL’s £10 billion budget. That’s certainly one way to look at it.
Here is another:
Dan Anderson is a tourist-attraction expert who works at consultancy Fourth Street