Lord Berkeley – 2016 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Lord Berkeley on 2016-10-13.

To ask Her Majesty’s Government, in respect of the proposed Garden Bridge, whether the Department for Transport met each of the criteria set by the Treasury before funding was committed; if not, what action was taken to override the Treasury criteria; and what changes to procedures are in place to avoid any non-compliance with Treasury criteria.

Lord Ahmad of Wimbledon

Government funding for the Garden Bridge project was initially announced by the former Chancellor of the Exchequer in his 2013 Autumn Statement. In a subsequent letter to the then Secretary of State for Transport, the Chancellor said that this funding had been committed on the basis that:

• the Mayor of London would match it from Transport for London’s resources;
• a satisfactory business case would be produced, demonstrating that the project provided value for money;
• Transport for London would fund the Bridge’s ongoing maintenance; and
• the Mayor would cover cost overruns or shortfalls in funding.

The first criterion was met in full in advance of funding being transferred to Transport for London.

In respect of the second criterion, a business case for the project was produced by Transport for London and assessed by the Department before any funding was transferred. The Department’s analysis suggested that the project had a wide range of possible benefit to cost ratios, and that whilst there were risk factors associated with such a unique project, it had a reasonable chance of delivering value for money. The funding was therefore made available with a number of conditions attached to it, including a cap of £8.25 million on the amount that could be spent before the start of construction. That particular condition was revised, with part of the funding now able to be used to underwrite the cancellation costs that would arise were the project to be cancelled. This followed a Ministerial direction by the previous Secretary of State for Transport in May 2016.

In respect of the third criterion, funding of the ongoing maintenance costs will be a matter for the Garden Bridge Trust, but should the Trust be unable to cover these costs, the previous Mayor issued a Mayoral direction in June 2015 which approved the provision of guarantees by the Greater London Authority in relation to the Garden Bridge, subject to suitable terms and arrangements being agreed.

In terms of the fourth criterion, the Government has made clear that there will be no more public funding for the project beyond what has already been committed.

I receive regular progress reports from the chairman of the Garden Bridge Trust, and Department for Transport officials are in regular contact with their opposite numbers in Transport for London and the Garden Bridge Trust to discuss these and other matters. I do not consider any changes are necessary to these procedures.