So how did the tram line in Edinburgh end up costing nearly twice its original estimate of £500m? That is the question which Lord Hardie was tasked with finding out in his thorough and lengthy enquiry into the debacle. What started out as a line running all the way to Leith from the airport ended up being cut short and still costing £750m, and then when the extension was belatedly built as the tram proved to be so popular, the total bill reached £1,034m – and may eventually be more.
Lord Hardie certainly does not hold back in his criticism of virtually everyone involved. Even the cost of the report proved controversial. The report itself ended up costing £8.7m (suspiciously downgraded from £13m by ‘using public resources that were not replaced’ whatever that means) but it will be well worth it if the lessons are learnt. And the most obvious project in need of such information is, of course, HS2 which is in danger of making many of the same mistakes.
There are all kinds of parallels without getting into the nitty gritty of the large number of specific failings, and the one which overrides them all is the uncertainty created by politicians. The project for a tramline going through the historic centre of the city was initiated by the Labour controlled City of Edinburgh Council in 2000 but when the design work was well underway, in 2007 Labour lost control. The Scottish National Party which held the balance of power tried to push through the scrapping of the scheme which had been in its manifesto but the Scottish Parliament refused to sanction its abandonment. As a result, the SNP seemed intent to sow chaos by removing Transport Scotland from oversight of the project leaving a vacuum in its management. The uncertainty caused by the SNP’s opposition during the 2007 council election hustings and its attempt to undermine it after the election reduced confidence in the project which inevitably contributed to additional costs.
Before continuing the story, it is worth pausing here to consider how similar this is to current events. As I write, the government is considering scrapping the northern section of HS2 and this is precisely the same type of uncertainty which damaged the tram scheme. The dithering and scope changes on HS2 have been a major factor in the delays and cost overruns in the project.
There is another key similarity, which is the use of an arms length organisation to carry out the work. Early on in the process, the City of Edinburgh created a separate organisation, tie (transport initiatives Edinburgh, but lower case for some reason), which, it was hoped, would be able to pay for the scheme through raising money from a congestion charge. Unfortunately, that never came about. The referendum on the congestion was lost but the council proceeded with the tram scheme through tie anyway. And then tie pretty much went rogue. Because its bosses were concerned that the SNP who controlled a minority administration at the city council would kill of the scheme, they began to withhold vital financial information from the city councillors and worse, then began to actively lie about how much work had been carried out and what it had cost. And it just got worse and worse. Tie’s managers were hostile to any attempts by the council’s officers or members to try to obtain information about what was going on. Anyone from the council was viewed with suspicion. Lord Hardie sums up the attitude of tie managers as a ‘failure to collaborate with designers, contractors and stakeholders to resolve any issues that arose and minimise delays and consequent expense’. I would not be surprised if any subsequent analysis of HS2 Ltd comes to a similar conclusion about a breakdown in communication between HS2 Ltd and the Department.
Indeed this is another similarity. One of Lord Hardie’s key criticisms was over the governance structure which, he wrote, ‘did not follow any recognised model’. Undoubtedly the same applies to HS2. Who, one could ask, is making the key decisions on the project. HS2 Ltd has been led by a series of chief executives overseen by various chairmen, but these have been grey figures in the shadows, rarely seen in public despite their very generous salaries. No one seems to be accountable for what is going on, or at least they are not prepared to explain that to the public. More important, no one is there to defend the scheme, to explain the increases in costs or to argue its corner when there is criticism.
The boss of HS2 Ltd Mark Thurston has just announced his departure but will that make any difference? So the governance structure is opaque and, to repeat my mantra about the running of the railways, ‘leaderless and rudderless’. I remember how the Channel Tunnel scheme was saved by the arrival of the late and much missed Alastair Morton (we once shared the best bottle of Chablis I have ever quaffed on a Friday evening in his Canary Wharf office) who grabbed the project by the horns, bullied all the stakeholders and saw it to fruition at far less cost than had been expected. Gosh HS2 could do with him today.
HS2 Ltd, like tie, is an arms length organisation, in this case a wholly owned subsidiary of the Department for Transport. It has its own board who make a lot of the day to day decisions over the scheme and yet appear almost wholly unaccountable. At least the mischief that tie got up to has now been uncovered, albeit rather late, but HS2, which is spending the whole cost of the Edinburgh tram scheme every two months gets away with remarkably little accountability. HS2 Ltd do not publish a budget nor produce any comprehensive accounts and, as I have written before, their minutes have more patches than a pirates’ ship – indeed they contain no useful information whatsoever. So far it spent £30bn up to the end of March 2023 and will spend an estimated £7bn this year.
Apart from political uncertainty and lack of accountability, Lord Hardie highlights the design process and late changes to the contract. These issues are familiar to me as related In my book about the
construction of Crossrail, now the Elizabeth Line. In researching the book, I was told about quite substantial pieces of work having to be demolished because the design or the specification was changed at a very late stage. And changes were being made while people were on site carrying out the work.
In the Edinburgh scheme, tie – which does not come out well in any aspect of its performance – first of all failed to complete the design specification before letting the contract to do the work and then made numerous changes to that contract. It failed to keep to its commitment to ensure all utilities had been moved and that meant a change in the way the work was carried out – instead of the utilities being cleared in advance, the removal was undertaken as a ‘bow wave’ with taking place just before a particular site was needed. Inevitably this led to an increase in costs, as did the numerous changes required to the design.
As with Crossrail, the Edinburgh tram is now widely viewed as a success story and has greatly enhanced Edinburgh’s transport system. If the cost had been known from the outset, it might well have never been built, but that is the tragedy of these big projects. For the most part, they are worthwhile – my doubts about HS2 remain – but as with HS2, the key is that they are well run and built efficiently. That is what we seem to be so bad at in the UK.
No light from Lumo
I had to take a Lumo train down from Edinburgh a couple of weeks ago on a strike day when there were very few other services. I had booked and settled into my seat when there was an announcement to the effect that if you did not have a reservation for this service, you had to get off. Although the train was quite full and the luggage took ages to sort out as there is so little space available for it, there were actually spaces.
Moreover, Lumo has chosen to be part of the overall railway settlement plan and therefore its services can be used by people who have bought tickets that do not have a reservation attached. Indeed, the company gets a portion of the overall revenue on the line as a result. So the announcement was clearly wrong. People could stay on the train without a reservation and hope for a seat – or simply stand.
I took up the issue on Twitter (now X but not ex) and after some prevarication from his staff, the boss of Lumo, Martijn Gilbert confirmed that yes, indeed, people could use the trains without a reservation. That is good to hear but the whole episode was part of the creeping ‘you must have a reservation’ phenomenon which is a threat to a basic part of the railway service, the ability to hop on a train at any time without prior warning. It is very important that the railways retain this, but I fear that for many people this has been lost – my grown up children, for example, generally always book on long distance journeys and would be deterred by the misleading notices sometimes put out by the train operators to the effect that a particular service is unavailable because it is ‘full’. This must stop.