Ministers ignored top civil servant's concerns about 'risky' Garden Bridge funding

Posted On: 
11th October 2016

Former Transport Secretary Patrick McLoughlin overruled the most senior official in his department to increase taxpayers’ liability to the Garden Bridge project. 

Patrick McLoughlin and Philip Rutnam at a select committee hearing
Credit: 
PA Wire

The National Audit Office has published its report on the controversial scheme, concluding that there is still a “significant risk” that it will never be built.

George Osborne initially committed £30m of central Government funding to the bridge, of which £22.5m could be lost if the project is scrapped.

Another £15m in guarantees was given in May despite the Department for Transport’s permanent secretary seeking a ministerial direction, the strongest way for a civil servant to register their concerns.

Chris Grayling, Mr McLoughlin’s successor as Transport Secretary, announced in August that the Government would extend the guarantee indefinitely – but reduced its cap from £15m to £9m.

Before Mr McLoughlin agreed to the extra £15m cancellation guarantees, the amount of the grant that the Government allowed to be spent before construction began had crept up from its original cap of £8.2m to £13.45m.

DfT permanent secretary Philip Rutnam said in a letter to Mr McLoughlin there were a “number of significant risks” to the viability of the bridge.

“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,” he wrote.

“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.”

Transport minister Lord Ahmad said the Government would consider the NAO’s findings “carefully”.

“The Government remains supportive of the Garden Bridge project and ministers took into account a wide range of factors before deciding whether or not to make funding available,” he said.

“The taxpayer, however, must not be exposed to any further risks and it is now for the trust to find private sector backers to invest in the delivery of this project."