Another month, another nail in the coffin of Boris Johnson’s last vanity project for London.
This week it’s Dame Margaret Hodge, the Labour MP for Barking and former chair of the Public Accounts Committee, who is calling for the Garden Bridge to be stopped. Dame Margaret was asked to review the scheme by Bozza’s replacement as London mayor, Sadiq Khan, last September, in which looked suspiciously like a step towards the long grass.
And would you believe it? Her report has found that n large but uncertain share of the cost looks likely to fall on the taxpayer, rather than the private backers we’d all been promised. She concludes that the whole thing should be halted until the promised finance materialises.
Here’s are some extracts from her report, annotated with my headlines.
The taxpayer contribution keeps on creeping upwards…
The original ambition to fund the Garden Bridge solely through private finance has been abandoned. Furthermore the goalposts have moved several times and each time the risks to the taxpayer have intensified.
As does the price…
Looking to the future, the costs of construction have escalated and are likely to increase further. What started life as a project costing an estimated £60 million is likely to end up costing over £200 million.
Those private investors are nowhere to be seen…
At the same time the Garden Bridge Trust has lost two major donors and has only secured £69 million in private funding pledges, leaving a gap of at least £70 million that needs to be raised for the capital investment. No new pledges have been obtained since August 2016.
And that ain’t likely to change….
At the same time I am sceptical that the Garden Bridge Trust will succeed in raising all the private capital monies required and I am firmly of the view that more public money will be needed to complete the construction….
…because not everyone in London is Joanna bloody Lumley…
The project has become very controversial with the public. If the Garden Bridge is not treasured by the public in the same way that it is by its creators, then the business model, based on raising private finance is far less likely to succeed. Philanthropists will be cautious about associating themselves with the project.
Last but not least…
I do not believe the Trust will secure the philanthropic support it needs to fund the ongoing management and maintenance of the Garden Bridge.
This last bit sounds dull but is, in some ways, the real kicker. Raising investment to build the thing is in some ways the easy bit: rich people like being able to point to a thing and think “I did that”. Persuading people to stump up so that someone can clean it and stop bits falling off is rather harder.
While we’re at it, there’s a moral hazard problem with getting private interests to fund the bridge now the state is involved. If the bridge isn’t happening unless investors stump up, and investors really want it to happen, then, well, they’ll have to stump up. But if it becomes clear that the state will plug the shortfall, what incentive is there for investors to get involved at all?
Dame Margaret’s conclusion is, basically, the whole thing should stop, until the private investment arrives:
“It would be better for the taxpayer to accept the financial loss of cancelling the project than to risk the potential uncertain additional costs to the public purse if the project proceeds…. I would urge the Mayor not to sign any guarantees until it is confirmed that the private capital and revenue monies have been secured by the Garden Bridge Trust.”
In other words, it’s better to accept that the £60m the taxpayer has already spent on the bridge was a total waste of money than to keep chucking money at it indefinitely.
The Garden Bridge Trust, quite naturally, disagrees. It replied with the following, pleasingly bitchy statement:
“We are pleased that Dame Margaret has finally published her report after six months of uncertainty.”
“We will be studying the report in detail and seeking a meeting with the Mayor of London to discuss next steps. The Trust remains as determined as ever to make the Garden Bridge happen which will bring huge benefits to London and the UK.”
See that? They’re as “determined as ever”. Well, for my part, I remain determined as ever to become a handsome billionnaire.
So is it dead? Is it finally, actually dead? Well, no, not yet. But it’s not looking very well.