Edinburgh tram inquiry finds 'litany of avoidable failures'

The development of the tram line from the airport to Newhaven was heavily delayed and only opened fully earlier this year.

It was expected to be completed within the available budget of £545 million and to be open for service by the summer of 2011.

A line from the airport to York Place opened up three years late in May 2014 at a reported cost of £776.7m - £231.7m in excess of the available budget for the full 18.5km line.

More than a whole decade later than planned, an extension to Newhaven opened up in June.

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In the end, it has cost the city an estimated £835.7m.

The findings of an inquiry - set up in 2014 - into the debacle by Lord Hardie has now been published containing criticisms of several organisations.

It highlights the actions of Transport Initiatives Edinburgh (TIE), the City of Edinburgh Council and Scottish Ministers as being principally responsible for the failure to deliver the project on time.

Lord Hardie said: “The inquiry process has been thorough and robust but also complex, with literally millions of documents that had to be carefully reviewed and detailed contractual issues to investigate.

“This work has been time-consuming but necessary to produce a report which not only provides answers to what went wrong with the Edinburgh Trams Project, but also clear recommendations for future transport projects.

“What is clear from the inquiry’s work is that there was a litany of avoidable failures on the parts of several parties whose role it was to ensure that public funding was spent effectively and to the benefit of Scotland’s taxpayers, and that the Edinburgh Trams Project was delivered efficiently.

“Poor management and abdication of responsibility on a large scale have had a significant and lasting impact on the lives and livelihoods of Edinburgh residents, and the reputation of the city.”

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The report also sets out 24 recommendations for the consideration of Scottish ministers, including considering whether there is a requirement for new legislation to allow for civil and criminal sanctions against relevant individuals or companies who knowingly submit reports that include false statements to councillors.

The cost of and time taken by the inquiry itself has become a focus for criticism.

When he set it up almost a decade ago, days after the trams started running three years later than planned, then first minister Alex Salmond told MSPs he expected it to be “swift and thorough”.

Public hearings began in 2017 and concluded the following year, with the report published on Tuesday sent to the printers in April.

The inquiry found the reported cost was an understatement because the council allocated costs to other budgets that truly related to the project and failed to include the net present value of borrowing £231m to complete the restricted line.

There was also a substantial claim by a landowner of which there had been no awareness at the date of the reported cost. The best estimate of the cost of the restricted line is £835.7m.

Actions cited as the principal reasons behind the failure to deliver the project within budget include:

• TIE’s departure from the procurement strategy that had been intended to manage risk out of the project
• The failure of TIE to work collaboratively with the council and others
• Failure by TIE to report accurately on progress and failure by council officials to monitor progress
• Delay with production of design due to poor performance by PB and failure by tie and BSC to manage the design contract effectively
• TIE’s failure to follow the guidance about optimism bias when preparing various versions of the business case such that the cost of the project was underestimated
• The governance structure did not follow any recognised model. There was a lack of clarity as to who had responsibility for the performance of certain tasks and there was some overlap regarding the respective roles of the various bodies created, and individuals appointed, to deliver the project. It is also unclear whether all of the individuals appointed to specific roles actually fulfilled these roles
• The failure of council officials to protect the council's interests as the client and promoter of the project bearing the risk of exceeding the allocated budget of £545 million
• The Scottish Ministers’ decision following the debate in Parliament on June 27, 2007 to withdraw the involvement in the project of officials in Transport Scotland resulting in a loss of expertise in the management of major transport infrastructure projects

Mairi McAllan, Cabinet Secretary for Transport, said: “The Scottish Government places the highest importance on the efficient spending of public money. It is why the Public Inquiry was set up and given statutory powers to thoroughly investigate matters. It is also why we committed significant resources to diligently support the Inquiry and to engage meaningfully and openly with it.

“However, the inquiry took too long, was too costly and in some instances the evidence heard does not support the conclusion drawn.

“Clearly all organisations and individuals who gave evidence to the Inquiry, including the Scottish Government and Transport Scotland who have just received the report, must take our time to consider the detail and the recommendations. Having done that I will provide a more comprehensive response to Parliament, and respond to members' questions, in due course.”