Department of Transport boss warned ministers about risk Garden Bridge posed to taxpayer five months ago

Getting a bit sick of this artist's impression to be honest, lads. Image: Heatherwick.

Since April 2012, Philip Rutnam has been the permanent secretary – that is, the head – of the UK Department for Transport (DfT). In that capacity, he's also the “accounting officer”, responsible for ensuring that the department achieves good value for money.

If he's worried that a project will cost too much money, or provide too little benefit, he's entitled to write to his minister to request direction. In this way he can both formally set out his concerns, and – let's be honest about this – make sure it’s not his fault if it all goes tits up.

The reason I mention all this is because, last May, Philip Rutnam did just that. The letter in question concerns London's proposed Garden Bridge, which will be a much loved addition to the skyline or an embarrassing waste of time and money, depending on whose side you're on.

Rutnam begins his letter by explaining why he's writing it in the first place, and how the Garden Bridge came to be DfT's problem. Chancellor George Osborne promised to commit £30m to the project in December 2013, “subject to there being a satisfactory business case for the project".

Rutnam makes clear he was always cynical – “After examining the business case for the project in summer 2014, my judgment was that the transport benefits of the project were limited and came with a relatively high level of risk to value for money”. But, he adds “on the balance of probabilities I considered that this risk was acceptable”.

The problem is that the risk kept increasing, because the amount of money DfT had to make available before construction started – money that would, if the project collapsed, be lost – kept on increasing, too. Why? Because the Garden Bridge Trust (GBT), the charity running the scheme, asked for it. Here's the relevant passage:

One important control on the DfT's contribution is a cap on the amount that can be spent prior to construction. This was originally set at £8.2m, but it has since twice been agreed to increase the cap following requests from the Garden Bridge Trust, and it now stands at a little under £13.5m.

The Trust has now asked for a further increase in its permitted preconstruction spending of up to £15m (across DfT and Tfl combined). This is to underwrite the potential cancellation liabilities that it now will face if the project does not proceed. The Trustees have been advised that under charity law they could become personally liable for the Trust's unmet financial obligations if they have failed to manage risk prudently.

So – to protect the GBT’s trustees, the trust asked DfT and Transport for London (TfL) to underwrite their liabilities. Except that TfL then asked to be excused, too:

Following recent discussions with the Mayor of London, DfT has been asked to increase its pre-construction exposure by up to £15m to underwrite the potential cancellation liabilities.

And, Rutnam warned, for all sorts of reasons – GBT’s failure to acquire land on the South Bank, the need to raise another £40m in private donations – “the probability of these liabilities materialising is not negligible”.

The result:

If we increase our pre-construction commitment as requested and the bridge does not proceed, there would be cancellation costs to the public sector of up to £15m. This is in addition to sunk costs of around £13.5m committed by DfT and £22m by TfL. In this scenario, around 90% of the cost of the cancelled bridge would have been provided by the public sector funders, and DfT specifically would have provided up to a half of the total amount spent. In my judgment, this represents a disproportionate level of exposure for the Exchequer to the risk of failure on a charity-led project that was intended to be funded largely by private donations.

Look past the civil service jargon, and this is quietly damning. Rutnam is saying exactly what the Garden Bridge's critics have been saying since the project began: that, even though its transport benefits are limited, the cost of the project was  falling disproportionately on the taxpayer.


And yet, ministers decided the project would still go ahead. Go figure.

We approached the Garden Bridge Trust for comment. It said it couldn't comment on internal government communications.

This morning, the National Audit Office, a government spending watchdog, published its long-awaited report on the  project. It found that there is significant risk the bridge would never be built, and the DfT stood to lose as much as £22.5m if that happened.

And if the project isn't cancelled?

If the project continues, it is possible that the government will be approached for extra funding should the Trust face a funding shortfall. The project has faced cost increases and delays to the schedule. The pattern of behaviour outlined in this report is one in which the Trust has repeatedly approached the government to release more of its funding for pre-construction activities when it encounters challenges. The Department, in turn, has agreed to the Trust’s requests.

The Garden Bridge Trust is commenting on this one. Here’s the first paragraphs of its statement:

The Garden Bridge is a visionary project, connecting the South Bank with the North Bank, Covent Garden, the city and beyond.  It is the first of its kind, a pedestrian walkway through a garden of 270 trees, hedging, shrubs and plants.  It is an asset funded primarily by the private sector and bequeathed to London, enabling 9,000 commuters each weekday to cross the Thames without having to share a Bridge with traffic.  It will be a fantastic place for people to visit for free, 365 days a year.

It is right that there is scrutiny of the project because it involves public money and transparency is good for us at an uncertain time.

Draw your own conclusions.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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On Walter Benjamin, and the “Arcades Project”

Passage Verdue, Paris. Image: LPLT/Wikimedia Commons.

In 1940 a small group of refugees were turned away at the French-Spanish border. Having fled the Nazi invasion of France, they hoped to find safety in Spain. One of their number, a German-Jewish philosopher and writer, intended to have travelled onwards to America, where he would certainly be safe. So distraught was he by the refusal he met at the border that he took his own life.

The writer in question was Walter Benjamin, the prominent critical theorist who has contributed so much to our understanding of urban society, and he died with a manuscript close at hand. When asked previously if the briefcase of notes was really necessary to a man fleeing for his life he had replied, “I cannot risk losing it. It must be saved. It is more important than I am.”

The work that Benjamin died protecting was the Arcades Project. It was to be his magnus opus, intended by the author to illuminate the contradictions of modern city life. But it was never finished.

To Benjamin, the subject of the work, the arcades of Paris, were relics of a past social order, where consumerism ruled. The arcades were a precursor to the modern mall, lined with all sorts of shops, cafes and other establishments where visitors could buy into the good life. The area between these two lines of businesses was covered with glass and metal roofs, much like a conservatory: it gave visitors the high street feel in an intimate, sheltered and well-lit setting. You can still find examples of such places in modern London in the Burlington and Piccadilly arcades, both off Piccadilly.

Such arcades proved hugely popular, spreading across Europe’s capitals as the 19th century progressed. By Benjamin’s time, though, his type of shopping area was losing custom to the fancy department stores, and in Paris many of them had been obliterated in Haussmann’s city reforms of the 1850s and ‘60s. Whereas Parisians could once visit 300 arcades, now only 30 remain.

Through his research Benjamin started to see the arcades as representative of a pivotal moment in social history: the point when society became focused on consumption over production. Buying the latest fad product was just an opium, he thought, dulling senses to the true nature of the world. By bringing light to this, he hoped to wake people up from the consumerism of the 19th Century and bring forth some kind of socialist utopia.


He also warned that this shiny veneer of progress was hiding the true state of things. Instead, he revered crusty old cities like contemporary Marseilles and Moscow, where social life was more honest. In this way, Benjamin contributed to the intellectual movement focused on stripping away the excess of revivalism, standing alongside architects such as Le Corbusier. 

Through his newspaper essays throughout the first half of the 20th Century, Benjamin also became one of the first thinkers to focus on urban isolation. His suggestion that we can be most alone when among such a dense mass of other people is something many in modern cities would sympathise with. His work wasn’t all doom and gloom, however, as he saw cities as our salvation, too: laboratories from where society’s problems can be worked out.

It was 2000 before an English translation of the unfinished the Arcades Project was published, but by then the work had already had a significant impact. Just as he stood on the shoulders of giants such as Baudelaire and the Surrealists, modern thinkers have drawn on his work. Benjamin's concerns about common architectural forms can be seen to inspire modern architects such as Laurie Hawkinson, Steven Holl, Tod Williams and Billie Tsien.

The city of Paris itself was as much a part of the Arcade Project’s inspiration for Benjamin as was his intellectual predecessors. In his letters he repeats that it felt “more like home” than Berlin, and his days were spent marvelling at how the old and the modern exist together on the Parisian streets.

How groundbreaking the Arcades Project really was is hard to say. The fact it wasn’t finished certainly scuppered Benjamin’s plans to wake society up from its consumerist slumber, but that doesn’t make the work inconsequential. His fairytale of steel and glass is as much about the relationship between its author and Paris as it is a theoretical work. By putting the city as the main subject in human’s social history he laid the groundwork for future generations of thinkers.

Benjamin was lost to the tragic tide of the 20th century history, and his death marked the end of the project which could have changed the way we think of the urban landscape. Even if you shy away from the grandiose or don’t buy into his promises of socialist utopia, reading the work can still offer some eclectic factoids about 19th century France. At any rate, it must be acknowledged that the man gave his life to the betterment of society and the cities in which we live.