The National Audit Office (NAO) has questioned the viability and taxpayer risk following an investigation into the Department for Transport’s £30m grant towards the development of the Garden Bridge, the proposed plan for a new pedestrian bridge over the Thames, following an internal audit of the Garden Bridge Trust
The NAO’s investigation reviews the Department for Transport’s decision to provide grant funding to the Trust. It also considers the decision to increase, on three occasions, the amount of its £30m contribution that it was willing to commit to before construction started on the project. This followed an internal audit of the grant position conducted in August.
In an attempt to protect taxpayers’ money the Department for Transport introduced a cap on the amount of its funding that could be used for pre-construction activity. In November 2014 the cap started at a maximum of £8.2m, in June 2015 it increased to £9.95m and then another £3.5m was added in February 2016.
The Garden Bridge Trust was set up as a charity which was given the responsibility of the design, build and maintenance of the bridge. As it stands, the charity has received a voluntary income of £12.65m and has spent £7.06m on ‘charitable activities’, according to the Charity Commission. The Trust has also revealed that it has nearly £70m of private money raised.
As a result of the internal audit on the financial position of the charity the Department for Transport agreed to ‘extend its guarantee indefinitely but reduces the amount it is prepared to underwrite to £9 million.’
This reduced the Department for Transport’s pre-construction losses from £28.5m to £22.5m, which will be lost if the project is not able to proceed. This is made up of £13.5m in costs so far to complete the pre-construction activity and another £9m of cancelation liabilities.
The internal audit also identified a funding gap of up to £75m between the project’s costs and the levels of private investment it will receive. Therefore the audit concluded that any further release of funding to the charity was likely to be lost.
Initial funding commitments to the project were made by former Chancellor, George Osborne to former Mayor, Boris Johnson. In the 2013 Autumn Statement it was announced that government would contribute £30m to the funding of the bridge, in which the Department for Transport was nominated. The Mayor was to contribute a further £30m, through TfL, to provide £60m of public funding towards the project.
The Garden Bridge project has said: ‘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.’
NAO’s Investigation: the Department for Transport’s funding of the Garden Bridge is available here.
