MPs this week criticised the Department for Transport (DfT) for its “inadequate management and oversight” of Tube upgrade contractor Metronet which collapsed in 2007, costing the taxpayer up to £410M.
The high costs resulted from the DfT’s “flawed” assumptions of how the devolved delivery arrangements would work, according to a report by the Commons Public Accounts Committee.
“We support well thought through innovation, underpinned by sound risk management. Nor are we averse to devolved delivery, provided there is robust oversight to protect the taxpayer,” says the report.
“But the [DfT’s] oversight and management of risk on the Metronet contracts were inadequate, especially given that it provided a £1bn a year grant. It was ultimately responsible for delivery and carried the majority of the risk of failure.”
The committee said PPP Arbiter Chris Bolt was “largely ineffective” because he could only intervene if invited to, and this was not done at the earliest opportunity.
Key public sector parties including London Underground, Transport for London and the mayor were also paralysed by their inability to obtain information they needed to effectively oversee the contract, says the report.
“The [DfT] must learn from its mistakes, not just when formulating its plans with the public sector bodies for the long term arrangements to replace the Metronet contract, but also for the other private sector contract with Tube Lines and, in the longer term, for the Crossrail scheme,” it says.