Edinburgh Tram Inquiry Report: Transport Secretary statement

Presiding Officer, I am grateful for the opportunity to make a statement in response to the Edinburgh Tram Inquiry Report - a comprehensive document totalling nearly 1,000 pages - which I received on the morning of publication on 19 September. The Report was also laid in Parliament in line with the requirements of the Inquiries Act 2005.

I believe that the Report addresses the terms of reference that were set, namely, to establish why the Edinburgh Tram project incurred delays, cost more than originally budgeted for and, through reductions in scope, delivered significantly less than projected.

I recognise the extensive work and efforts of the Inquiry team in delivering this Report and would like to thank those who contributed to the Inquiry including the many witnesses who provided evidence.

I am aware that the construction of the original tram line caused a great deal of disruption to the residents and businesses of Edinburgh, and it is important that we recognise that frustration and ensure that lessons are learned and applied to future infrastructure projects, be those local authority or central government.

As such, I can confirm that this Government has given very careful consideration to the full Report, along with considering its recommendations, any actions required, and lessons learned.

I would like to be very clear that the primary objectives of this Government, in establishing the Inquiry and throughout the process, have been to support delivery of valid findings and recommendations, and to engage meaningfully and co-operate fully and openly in the production of evidence at the Inquiry’s request.

Significant resources were committed to diligently carrying out this endeavour and all of those who gave evidence on behalf of the Scottish Government did so in good faith, providing the Inquiry with a comprehensive and accurate view of Scottish Ministers’ collective position throughout.

While I welcome the formal publication of the Report, I understand and empathise with the public’s frustration at the length of time it has taken to conclude as well as the cost to the public purse. This is particularly disappointing as it was this Government’s concern for prudent public spending that saw us commission the Inquiry in 2014.

However, as an independent, statutory Inquiry, it would have been very much beyond the powers of government to seek to influence the inquiry’s proceedings and any questions on length of time or cost are rightly for Lord Hardie to answer.

The Report itself contains twenty-four recommendations, a minority of which are directed to the Government and mainly concern administrative processes and record management, including minute-taking and legislative and practical aspects of setting up Inquiries. All recommendations are being considered in detail.

The Report also outlined ten headline ‘causes of failure’ which contributed to the delays and cost overruns associated with the project. Nine of these relate directly to the actions of the City of Edinburgh Council and its arms-length delivery body tie with the tenth cause relating directly to the actions of the Scottish Ministers.  

Indeed, the Chair Lord Hardie is unambiguous, noting in the video statement that accompanied the Report, “Tie’s failures were the principal cause of the failure to deliver the project on time and within budget”, and he adds that the City of Edinburgh Council “must also share principal responsibility with tie for the delays in the design”. This reflects the fact that responsibility for delivery of the project (including procurement and risk of any cost overruns) was solely, and rightly, for the City of Edinburgh Council.

The only “cause of failure” attributed to the actions of Ministers was the decision, following the debate in Parliament on June 2007 to reposition Transport Scotland as a principal funder, as opposed to a project partner.

Setting aside for a moment the fact that this Government was very clear at the time about the risks inherent with the project and that it was others represented in this Parliament today who voted the project through, it is clear that the outcome of that vote transferred accountability to the City of Edinburgh Council and necessarily altered Transport Scotland’s relationship with the project going forward.

Any failure to clarify the role of Transport Scotland would have been an abdication of leadership and would have led to poor governance and confusion around roles. The decision to alter the governance arrangements was taken explicitly to avoid uncertainty about where leadership of the project lay, clarifying the Government’s role as principal funders and, on that basis, preventing further calls on the public purse.

It was exactly because of the clarity and clear setting of governance boundaries that Government funding for the project remained capped at the agreed £500 million and not a penny more.

Following the parliamentary vote on the tram project, the decision to separate the roles of Transport Scotland as principal funder and City of Edinburgh Council as project lead was actually good governance and helped to avoid potential delay and increased risk.

Presiding Officer, the Report identifies twenty-four recommendations, all of which I will address. There are eleven that are directed expressly at Scottish Ministers: of these, four refer to the establishment and delivery of public inquiries rather than the Edinburgh Tram Project itself; two are jointly for Scottish Ministers and COSLA to consider a range of measures to ensure robust project delivery; one concerns record keeping; and four relate to the provision of evidence and potential sanctions for providing misleading evidence.

We are working through all of these recommendations, but I can report that additional guidance similar to that suggested is already in development with reference to the efficient establishment and delivery of public inquiries and has been shared with recent inquiries as they have been established.

This Government is very aware of the impact of public inquiries and the importance of effectively supporting them, ensuring efficient and timely reporting.

Robust and enhanced procedures regarding minute-taking and documentation management have also been embedded within the Government and the Civil Service for a long time. The Permanent Secretary recently appeared at the Finance and Public Administration Committee and reiterated this commitment to ensuring robust systems and processes are in place to record and manage this critical information.

Presiding Officer, let me now turn to recommendations that involve collaboration with and working alongside COSLA and our Local Authority partners. Effective collaboration sits at the heart of this Government and the recently agreed Verity House Agreement is testament to our commitment to embrace that collaborative approach to delivering our shared priorities for the people of Scotland. While responsibility for delivery of local authority projects must, quite rightly, remain with councils as project leads, I have absolutely no hesitation in championing close working with our local authority partners.

The remaining thirteen recommendations cover a range of areas relating to the governance and delivery of light rail projects. While these recommendations are directed squarely at project leads and Local Authority officials, there is a link to much of the work being done by this Government and its agencies, including Transport Scotland.

I am pleased to report that this Government and its public bodies already operate in line with these recommendations and best practice as evidenced by our excellent record of delivering major infrastructure projects including the Borders Railway, the Edinburgh Glasgow Improvement Programme, the Aberdeen Western Peripheral Route and the Queensferry Crossing over the Forth Estuary, a complex engineering feat that has put our workmanship to the front and centre of global engineering. 

Furthermore, we follow detailed Government guidance on procurement, risk and optimism bias as enshrined in the Treasury’s Green Book, the Scottish Government’s Client Guide to Construction Projects and the Scottish Public Finance Manual. Indeed, the identification and management of risk and adherence to best practice on business case production and assessment rests at the heart of project and programme delivery within Transport Scotland and the wider Government.

Transport Scotland always follows published best practice guidance when setting up project governance structures and has its own “Governance Procedures for Investment Decision Making and Monitoring and Review” guidance.

Presiding Officer, I emphasise that we will continue to very carefully consider each of the recommendations, noting where action has already been taken or has always been best practice as well as crucially where we can go further.

Presiding Officer, while acknowledging that we came into government with a manifesto commitment to abandon this project and spend the £500 million of promised funding on other high-priority infrastructure programmes, once the will of Parliament was made clear, this Government endeavoured to ensure our involvement with the project followed good governance practice at all times.  

It is for that reason that it was essential that we provide clarity around roles following the vote in favour of the project, thereby providing a clear sponsorship structure that allowed us to assume the role of principal funder and ensure that public funds were monitored, and grant conditions were applied in compliance with published guidance at all times. 

And while I reiterate the point that nine of the ten lead criticisms in the Report clearly lay within the responsibility of City of Edinburgh Council and tie, I acknowledge that lessons must be learned from this Report for all parties involved and I am clear that we are giving full consideration to the recommendations and any actions that follow, ensuring that lessons are learned and best practice always followed for all major infrastructure projects.

Presiding Officer, I would like to finish by once again thanking all those who took the time to provide evidence to the Inquiry and point again to the full cooperation of this Government. The provision of evidence that demonstrated a comprehensive, transparent and accurate view of events underpinned the approach taken to the Inquiry by this Government, by Ministers and by officials, and I commend that approach to Parliament.