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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Five ways in which the rest of the world can avoid the homelessness crisis plaguing the US

Housing for all. Image: Nicobobinus/Flickr/creative commons.

Homelessness is a growing problem in the UK, where the number of people sleeping rough has doubled since 2010, yet it is dwarfed by the scale of the issue in the US. More than 500,000 homeless were found across the US during just one night, compared to the UK’s 2017 count of 4,751. Changes in the definition of homelessness and flawed methodologies suggest that the true number for the US could be anywhere from 2.5 to 10.2 times greater.

Millions more live in overcrowded or slum housing, forced to choose between the damage that poor conditions do to their physical and mental health, and the street. All of the US’s housing issues – from foreclosures to evictions to poor conditions – hit communities of colour the hardest.

This is due to a legacy of discrimination, which continues to undercut any commitment to safe and decent housing for all residents, whether in the private or public sector. In my recent book, City of Segregation, I explain how the long, violent history of creating spaces for the white and privileged classes is embedded in a number of practices, which continue in US cities to this day.

Exporting inequality

As private developers and investors seek out urban land in major cities around the world to secure their fortunes, real estate patterns and practices developed within the US are increasingly being observed elsewhere.

In cities as diverse as London, Sydney and Durban, community groups which have been working for decades to improve their neighbourhoods languish with little public or private resource. Meanwhile, developers create spaces for foreign investors and new residents, who anticipate certain protections and privileges such as greater security, high quality amenities and neighbours with similar interests and backgrounds.

This is a driving force behind rising evictions and the criminalisation of homelessness, alongside gated communities, hostile architecture, “broken windows” policing with its focus on prosecuting activities such as graffiti or jaywalking and the growing privatisation of public spaces through regeneration.

But there is still time for other countries to choose a different path. The UK, in particular, can build on the legacies of the post-war political consensus that all residents should have access to quality housing, and its acknowledgement of institutional racism and some history of government anti-racist campaigning.

Both legacies should be improved, but a renewed commitment to a programme of housing and anti-racism are central to increasing equality, prosperity and well-being for all. Based on my research, I’ve come up with five steps which the UK and countries like it can follow, to ensure that future development reduces – rather than drives – homelessness and inequality.


1. Build social housing

Unlike the US, the UK acknowledges a right to a home, and within living memory provided it for a huge swathe of British society. Social housing – whether in the form of traditional council flats, cooperatives or community land trusts – provides a variety of housing types and keeps rents from rising too far beyond wages.

When social housing is widely available, it makes a huge difference to people who – for one reason or another, and often through no fault of their own – become homeless. With social housing to fall back on, homelessness is a temporary condition which can be safely resolved. Without it, homelessness can become a life-destroying downwards spiral.

2. Preserve and expand community assets

Severe segregation in the US stripped entire communities of access to quality food, jobs, education, green spaces, services, banks and loans. Poverty is endemic, and can easily tip into homelessness. While far from perfect, the UK’s post-war commitment to universal provision of services, such as education and health care, and building social housing across all neighbourhoods underpinned a surge in upward mobility.

This achievement should be salvaged from the damage done by Right To Buy – a policy which sold off social housing without replacing it – and austerity, which has prompted a sell-off of public assets and land, as well as the closure of childrens’ services, libraries and community centres.

3. Decommodify housing

A market geared towards building apartment blocks for the portfolios of investors who will never live in them cannot produce the kind of housing and neighbourhoods which residents need, much less at a price they can afford.

While London has been badly affected for some time, this trend is now spreading to other areas of the UK and Europe. Local and national governments must act to prevent global demand for housing as investments from driving prices beyond the reach of those who need real homes.

4. Build communities, not walls

Gates, bars, armed security and homeowner restrictions are all ugly traits of private housing developed within the US context of desperate inequality and racism. The UK has a long and vibrant tradition of community development, creating a supportive built environment and social infrastructure of schools, libraries and other municipal services for residents.

Community assets. Image: Helen K/Flickr/creative commons.

This kind of development, and the social mobility and growing equality it fosters, safeguards public health and safety – not big walls, barbed wire and security guards. The private rented sector in the UK should be regulated to bring it more in line with Europe, where tenants prosper with security of tenure and strong regulation of rents and rent increases.

5. Raise your voice

Those who are bearing the brunt of our current housing crisis must be at the centre of efforts to change it. From tenants’ associations and renters’ unions, to campaign groups such as Justice for Grenfell, it’s vital to support those voices advocating fairer housing rights.

This also means rejecting austerity’s constant cuts to public services, funding social support for physical and mental health and ensuring that homes are safe, decent and secure, to create a safety net for those who are working to improve their communities.

The Conversation

Andrea Gibbons, Researcher in Sustainable Housing and Urban Studies, University of Salford.

This article is republished from The Conversation under a Creative Commons license. Read the original article.