Our leader has spoken: London’s ridiculous Garden Bridge project is going ahead.
At his first mayor’s question time this morning, Sadiq Khan confirmed the plan, claiming that it would cost the taxpayer twice as much to cancel the project – or “horticultural oasis”, as the ever balanced Evening Standard puts it – as it would to complete it.
Here are the key paragraphs from the paper’s report:
Transport for London (TfL) and the government have previously committed £30m each to the Garden Bridge, with the remainder raised through private donations.
Of the £30m pledged by TfL, £20m is in the form of a loan to be repaid in full.
Mr Khan revealed that of the £60m total of taxpayers’ money, £37.7m had already been spent. If the project was scrapped now, this would be lost in full with no benefit at all for Londoners or taxpayers.
The Mayor said if the Garden Bridge is completed, the loan would be repaid, and the Trust behind it would also pay £22m in VAT to the Treasury.
The final cost to the public purse would then be just £18m – less than half the cost of cancelling.
Hmmm. As so often with anything Garden Bridge-related, all this smells slightly odd to me – and for a couple of different reasons.
For one thing, that £20m is indeed a loan – but it’s not one that’s going to be repaid any time soon. It’s a 50 year loan, which is an insanely long time to be repaying anything: mortgages and US government bonds don’t have terms that long.
So, yes, technically, the taxpayer should get that share of its money back. But there’s a strong chance than Sadiq Khan, Joanna Lumley, Thomas Heatherwick and I will all be dead by the time that it does. Short-termism is not a good quality in a politician, but this is nonetheless not the comfort Khan seems to imagine.
The second reason I’m cynical about the mayor’s support for the garden bridge is that word “should”. Yes, the Garden Bridge Trust should repay its loan. No, it is not guaranteed that it will.
While we’re at it the Greater London Authority, very kindly, agreed to guarantee the Bridge’s operating costs (thanks for that, Boris). Those, we’re told are £2.5m a year – which, TfL’s strategic outline business case notes helpfully, is £150m over 60 years.
The problem is that, for reasons Dan Anderson outlined here, it’s not clear how it’s going to make the money to do any of that. There are few sponsorship opportunities that haven’t already been sold. The Garden Bridge Trust has said the Bridge won’t be ticketed, and will only be closed for private hire a maximum of 12 times a year. And the mayor just said that the bridge should be “more accessible and open to all Londoners”, which is very noble, but seems to restrict the pile of options for increasing revenues yet further.
Yet somehow, the GBT has to make enough money to cover £2.5m in operating costs, plus loan repayments, every year. It’s not entirely obvious that the sums add up – and if they don’t, it’s the taxpayer who’s on the hook.
So – cancelling the Bridge would mean losing the £37.7m the taxpayer has already spent; if the Bridge goes ahead, the taxpayer contribution will be just £18m. But that latter figure will only be accurate if the GBT can recoup £2.5m in operating costs (plus loan repayments!) every year through sources we’re still not entirely clear about, and even then we have to wait 50 years for the loan to be paid off.
I’m not saying the mayor is wrong. But as a taxpayer, I’d quite like to see the business plan that proves that he’s right.
Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.