“There’s more”: the case for scrapping London’s Garden Bridge

The bridge in question. Image: Heatherwick Studio.

Congratulations to Sadiq Khan, the new mayor of London. That he prevailed so convincingly in the face of a despicable campaign by Zac Goldsmith has temporarily renewed my faith in democracy. I still don’t think that the right person won; but the wrong person didn’t. Good enough.

The mayor’s in-tray is overflowing with issues left unresolved by his predecessor. Housing, transport and the environment are surely at the top of the agenda – all intractable problems that won’t be solved overnight.

But there is one decision that needs to be made quickly, and it will immediately signal the type of Mayor that Sadiq Khan intends to be: the Garden Bridge.

Boris Johnson famously ignored the fine detail of any issue, always opting for expediency over process. It’s a quality that produced a lot of media-friendly soundbites, and a great 15-minute spot on the Letterman show. It also lies at the heart that of all that has gone wrong with this troubled project.

So, what can we expect from Sadiq? Will it be four more years of hollow rhetoric and throwaway quips? Or will Khan be the kind of mayor that learns the facts and does the maths? Who exactly did we elect: Jed Bartlett or Bingo Bob? How Sadiq Khan approaches the vexed issue of the Garden Bridge will be a good indication.

The project has been a thorn in Sadiq’s side since Day One. Shortly after launching his campaign, he came out unambiguously against the Bridge, calling it a “white elephant” and claiming he’d scrap it because:

“...it no longer represents value for money. This was supposed to be an entirely privately funded project costing £60m, but the overall cost has tripled, and £60m is being paid for out of the public purse.”

There followed some savage criticism by the Evening Standard that portrayed Sadiq Khan as a sour puss killjoy who hates flowers.He promptly went into a huddle with Transport for London and The Garden Bridge Trust and emerged as the project’s apologist-in-chief.

The face-saving device that allowed this dramatic u-turn was a new financing deal through which part of the TfL grant would be converted into a soft loan. It allowed Khan to duck every subsequent question with the phrase: “The money has all been spent”.

But that isn’t true.

So here is another memo for the mayor’s in-tray. These are the facts. Will they inform his first big decision? Or can we expect another eight years of superficial bullshit masquerading as policy?

 

SUBJECT:The Garden Bridge

Mr mayor:

When you refer to all of the money having been spent, you mean just that part of the funding over which the Mayor’s Office has direct control – namely, the grant from TFL.

Some £10m of that really has been spent – on design, engineering, planning, and professional fees, as well as a comically biased poll to fool the public and a costly VR gimmick to fool Nick Clegg.

The next £20m from TFL was converted from a grant into your peace-in-our-time repayment plan.Let’s leave aside the fact that a 50-year low-interest loan deal is not what any reasonable observer could describe as either “a loan” or “a deal”. It is also undermined by the fact that the GLA, through TfL, has guaranteed the operating costs of The Garden Bridge, including the repayment of its own loan.

It’s like taking a loan from one branch of Barclays that is insured by the Barclays branch across the street. Admittedly, that sounds like something that Barclays might do, but I’d like the mayor of London to be a little smarter than that.

That’s £20m right off the bat that can be put to better use.

There’s more.

Your predecessor loved to crow about the fact that “the public funding element of the project is being used to secure considerable private sector investment”.The only thing that mattered to Johnson was that every pound of public funding was matched by two pounds of private investment. To Boris, the cow goes moo, that cat goes meow, and private investment is A Good Thing.

That is, however, a misleading interpretation of the facts. The Garden Bridge is not so much levering new private investment as it is cannibalising funds that would have been spent anyway.

The Garden Bridge Trust has, to date, been notoriously secretive about its funding. Fortunately, in their inevitable correction to an earlier version of this article, the Trust provided the most revealing breakdown to date of where all the money is coming from. 

This is what we now know:

Sources of capital funding for the Garden Bridge. Source: The Garden Bridge Trust.

This shows just how little additional investment is actually being leveraged by the £60m of public funding. 

First, much of the private funding comes from Trusts and Foundations that exist only to fund good causes. That isn’t “new” money: without The Garden Bridge, the £20m pledge from The Monument Trust and the £2m grant from the Garfield Weston Foundation would be available to other charities.

Much the same could be said about corporate sponsorship. Most sponsorship comes out of designated funds within an organisation’s marketing budget. Glencore might struggle to shift 240 metric tonnes of cupranickel, but it stands to reason that Citi would have likely found some other cause to support with its £3m.

Put simply, the Bridge is tying up some £60m that has not “already been spent” and that could be released to fund other, better projects.

There’s more.

Boris has committed the GLA to guaranteeing the Bridge’s operating costs. That’s the little poisoned pill that he approved just days before he left office.

According to Transport for London’s Strategic Outline Business Case:

“The estimated cost of ongoing operation and maintenance for the Garden Bridge is estimated to be around £2.5m per year from 2018 onwards. Over a 60-year period this equates to £150m (2014 prices).”

As taxpayers, we are on the hook for that £150m. Yet nobody outside the Garden Bridge Trust or Transport for London has seen the business plan that describes how these operating costs will be covered. 


What we do know isn’t encouraging. In order to secure a deal with the planning authority and the landowner in Lambeth, the Trust gave away most of the income from the South Bank landing. That is some valuable real estate, but the rent will be split between Coin Street Community Builders and Lambeth Council. Most of the sponsorship inventory has been capitalised to pay for the build, and there can’t be much of it left to pay for operations. The Trust insists that it has no intention to ticket or charge and it is limited to 12 closures per annum for private hire.

Just how much does the Trust think it can charge for cocktail parties on the Thames? You can hire the whole of Kensington Roof Gardens for £5,000. If this is the Trust’s main source of income, then it would need to be priced higher than one day’s exclusive use of a Formula One track. That’s not going to happen.

It begs the question that Johnson never cared to ask: where is the rest of the money going to come from?

Most councils would not approve this kind of guarantee without poring over the business plan and having it independently challenged. To endorse the Garden Bridge guarantee without similar scrutiny is irresponsible beyond measure. You must do better, Mr Mayor. That is a lot of future bail-out money that has not “already been spent” and can still be saved.

There’s more.

We are careering towards the start of construction, and the Trust still has a £30m gap to close. In the context of The Garden Bridge – with its exorbitant £175m budget – that may seem trivial. By comparison to almost any other project, that is still a mountain to climb. You could get change back from a whole other bridge in Pimlico for £30m.

And this is just the gap that the Trust itself has acknowledged: it may actually be larger than that. Another revealing nugget from the background information usefully provided by the Trust is this:

“Some organisations are anonymous at the moment because we are in the process of finalising contracts with them, and several major announcements are planned soon.”

In other words, some deals haven’t actually closed yet.

So what happens if the Trust fails to close the gap?According to the funding agreement with TfL, payments are subject to the Trust’s demonstration that it has secured “or is able to secure” the necessary funding. In the event that a shortfall remains, this puts the decision to start at TfL’s discretion.

In light of the Greater London Assembly’s damning critique of TfL’s procedural failures in procurement, can it really be trusted to provide robust oversight of the project’s funding and finance?

There is at least £30m more at stake and TfL is, by now, more politically than financially invested in the project. That is more money that hasn’t “already been spent” – but it’s a burden that looks increasingly likely to fall on the public sector.

There’s more.

A large proportion of the private investment is still unaccounted for. Try as you like, it is impossible to fully reconcile the list of donors on the website with the funding breakdown provided by the Trust. There must be a few very large givers in the mix who are as yet unidentified.

There are any number of legitimate reasons – fiscal, personal or spiritual – why some givers would want to remain anonymous. Some aren’t interested in the praise and plaudits. Others are anxious about opening themselves up to endless requests from other charities. They may not want to be drawn into any surrounding controversy. In most cases, the anonymity of donors is not a cause for concern.

But most projects are not so closely associated with senior politicians. Thew hole air of mystery surrounding the Trust’s fundraising is therefore disturbing. Caroline Pigeon AM wrote to the Trust asking for a detailed breakdown of donors and was fobbed off by a letter saying, “a list of contributors who are content that their commitment be publicly acknowledged is publicly available on our website”.

Johnson was worse. In response to an official question from the London Assembly, he wrote:

“The Garden Bridge Trust’s accounts and details of its fundraising are commercially sensitive and these are not routinely shared with TfL or the GLA.”

Huh? This is an organisation that is spending £60m of taxpayers’ money and is ultimately underwritten by the public sector. How can its financial details be too “commercially sensitive” for the GLA?

Mr Mayor, you should be deeply concerned that your predecessor worked so hard to shield this project from the prying eyes of Freedom of Information laws. When projects are known to be the personal favourites of particular politicians, they can become fertile ground for “tactical” giving. Remember the Hinduja Foundation and its £1m donation to the Millennium Dome? That cost Peter Mandelson his job.

I’m sure that nothing anything like so sinister is happening here – but for the avoidance of doubt, it’s in TfL’s interest to prove it. I’m not a conspiracy theorist by nature, but I’d be a little bit fidgety about “anonymous” donors to The Garden Bridge.

Yesterday, it was announced in The Observer that you’ve already initiated a review of the project “looking in more detail at some of the issues raised about the procurement”. It’s a good start, but you will hopefully look beyond the narrow procedural issue of a faulty procurement process. That the procurement process was so badly handled is but the symptom of a much more malignant disease that has infected every aspect of this project, including its funding and finance.

This whole project is a hospital pass that went from Joanna Lumley to Thomas Heatherwick to Boris Johnson. The ball is now waiting for you at City Hall. Will you simply pass it off as “Johnson’s folly, not my fault”; or will you get stuck into the gory details?

We all hope it’s the latter. The details are important. Whatever you think you know about The Garden Bridge –

There’s more.

Dan Anderson is an economist and a director at destination consultants Fourth Street.

 
 
 
 

More than 830 cities have brought essential services back under public control. Others should follow

A power station near Nottingham: not one owned by Robin Hood Energy, alas, but we couldn't find anything better. Image: Getty.

The wave of cities worldwide rejecting privatization is far bigger and more successful than anyone thought, according to a new report from the Transnational Institute, Reclaiming Public Services: How cities and citizens are turning back privatisation. Some 835 cities in 45 countries have brought essential services like water, energy and health care back under public control.

The persistent myth that public services are by nature more expensive and less efficient is losing its momentum. Citizens and users do not necessarily have to resign to paying increasingly higher tariffs for lower standard services. The decline of working conditions in public services is not an inevitability.

And the ever larger role private companies have played in public service delivery may at last be waning. The remunicipalisation movement – cities or local authorities reclaiming privatised services or developing new options – demonstrates that cities and citizens are working to protect and reinvent essential services.

The failure of austerity and privatisation to deliver promised improvements and investments is part of the reason this movement has advanced. But the real driver has been a desire to meet goals such as addressing climate change or increasing democratic participation in service provision. Lower costs and tariffs, improved conditions for workers and better service quality are frequently reported following remunicipalisation.  Meanwhile transparency and accountability have also improved.

Where remunicipalisation succeeds, it also tends to inspire other local authorities to make similar moves. Examples are plentiful. Municipalities have joined forces to push for renewable, climate-friendly energy initiatives in countries like Germany. Public water operators in France and Catalonia are sharing resources and expertise, and working together to overcome the challenges they meet.

Outside Europe, experiments in public services are gaining ground too. Delhi set up 1,000 Mohalla (community) clinics across the city in 2015 as a first step to delivering affordable primary health care. Some 110 clinics were working in some of the poorest areas of Delhi as of February 2017. The Delhi government claims that more than 2.6m of its poorest residents have received free quality health care since the clinics were set up.


Local authorities and the public are benefiting from savings too. When the Nottingham City Council found out that many low-income families in the city were struggling to pay their energy bills, they set up a new supply company. The company, Robin Hood Energy, which offers the lowest prices in the UK, has the motto: “No private shareholders. No director bonuses. Just clear transparent pricing.”

Robin Hood Energy has also formed partnerships with other major cities. In 2016, the city of Leeds set up the White Rose Energy municipal company to promote simple no-profit tariffs throughout the Yorkshire and Humberside regions. In 2017, the cities of Bradford and Doncaster agreed to join the White Rose/Robin Hood partnership.

Meanwhile, campaigners with Switched on London are pushing their city to set up a not-for-profit energy company with genuine citizen participation. The motivations in these diverse cities are similar: young municipal companies can simultaneously beat energy poverty and play a key role in achieving a just and renewable energy transition.

Remunicipalised public services often involve new forms of participation for workers and citizens. Remunicipalisation is often a first step towards creating the public services of the future: sustainable and grounded in the local economy. Inspiration can be found in the European towns and villages aiming for 'zero waste' with their remunicipalised waste service, or providing 100 per cent locally-sourced organic food in their remunicipalised school restaurants.

Public services are not good simply because they are not private. Public services must also continuously renew themselves, grow, innovate and recommit to the public they serve.

The push for remunicipalisation in Catalonia, for example, has come from a movement of citizen platforms. For them, a return to public management is not just an end in itself, but a first step towards the democratic management of public services based on ongoing civil participation.

Evidence is building that people are able to reclaim public services and usher in a new generation of public ownership. The momentum is building, as diverse movements and actors join forces to bring positive change in communities around the world.

You can read the Transnational Institute report, “Reclaiming Public Services: How cities and citizens are turning back privatisation”, on its website.