Meeting of the Parliament

Meeting date: Thursday, November 2, 2023

Official Report 1094KB pdf

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Edinburgh Tram Inquiry Report

The next item of business is a statement by Màiri McAllan on the Edinburgh tram inquiry report. The cabinet secretary will take questions on the issues raised in the report at the end of her statement and there should be no interventions or interruptions.

14:55  

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, which were to establish why the Edinburgh tram project incurred delays, cost more than was originally budgeted for and, through reductions in scope, delivered significantly less than was projected. I recognise the extensive work and efforts of the inquiry team in delivering the report, and I thank all 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. It is important that we recognise that frustration and ensure that lessons are learned and applied to future infrastructure projects, be they local authority or central Government projects. As such, I can confirm that the Government has given careful consideration to the full report along with its recommendations, any actions required and lessons learned.

I would like to be very clear that the Government’s primary objectives in establishing the inquiry and throughout the process have been to support the delivery of valid findings and recommendations, to engage meaningfully and to co-operate fully and openly in the production of evidence at the inquiry’s request. Significant resources were committed to carrying out that endeavour diligently, and all 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.

Although I welcome the formal publication of the report, I understand and empathise with the public’s frustration at the length of time that it took to conclude the inquiry, as well as the cost to the public purse. That is particularly disappointing, as it was the Government’s concern for prudent public spending that saw the commission of 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 proceedings, and any questions about the length of time and the cost of the inquiry are rightly for Lord Hardie to answer.

The report contains 24 recommendations. A minority of them are directed to the Government, and they mainly concern administrative processes and record management, including minute taking and legislative and practical aspects of setting up inquiries. As I have said, all recommendations are being considered in detail.

The report also outlines 10 headline causes of failure that contributed to the delays and cost overruns associated with the project. Nine of those relate directly to the actions of the City of Edinburgh Council and its arm’s-length delivery body, Transport Initiatives Edinburgh or TIE, with the 10th and final cause relating only to Scottish ministers. Indeed, the chair, Lord Hardie, is unambiguous, noting in a video statement that he produced alongside the report:

“TIE’s failures were the principal cause of the failure to deliver the project on time and within budget.”

He added that City of Edinburgh Council must

“also share principal responsibility with TIE for the delays in the design.”

That reflects the fact that responsibility for delivery of the project, including procurement and risk of any cost overruns, belonged solely—and rightly—to City of Edinburgh Council.

The only cause of failure attributed to the actions of ministers was the decision, following the debate in Parliament in June 2007, to reposition Transport Scotland as a principal funder as opposed to a project partner. Setting aside for a moment the fact that the Government was very clear at the time about the risks inherent in the project and that it was others who are represented in the Parliament today who voted the project through, it is clear that the outcome of that vote transferred accountability to City of Edinburgh Council and necessarily altered Transport Scotland’s relationship with the project.

Indeed, a 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 good governance and helped to avoid potential delay and increased risk.

As I have mentioned, the report identifies 24 recommendations, all of which I will address. There are 11 recommendations that are directed expressly at Scottish ministers: four refer to the establishment and delivery of public inquiries rather than the Edinburgh tram project itself; two are jointly for Scottish ministers and the Convention of Scottish Local Authorities 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 those recommendations, but I can report that additional guidance similar to that which has been 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. The Government is very aware of the impact of public inquiries and the importance of supporting them effectively, ensuring efficient and timely reporting. Robust and enhanced procedures regarding minute taking and documentation management, as suggested, have already been embedded within the Government and civil service for a long time. The permanent secretary recently appeared at the Finance and Public Administration Committee and reiterated the commitment to ensuring that robust systems and processes are in place to record and manage that critical information.

I turn to the recommendations that involve collaboration with and working alongside COSLA and local authority partners. Effective collaboration sits at the heart of this Government, and the recent Verity house agreement is a testament to our commitment to embrace that collaborative approach to delivering our shared priorities for the people of Scotland. Although responsibility for the 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 13 recommendations cover a range of areas relating to the governance and delivery of light rail projects. Although the recommendations are directed squarely at project leads and local authority officials, there is a link to much of the work that is being done by the Government and its agencies, including Transport Scotland. I am pleased to report that the Government and its public bodies already operate in line with those recommendations and the suggested 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, which is 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 in Transport Scotland and the wider Government. Transport Scotland always follows published best-practice guidance when setting up project governance structures and has its own guidance on governance procedures for investment decision making, monitoring and review.

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

I acknowledge that we came into government with a manifesto commitment to abandon the project and to spend the £500 million of promised funding on other high-priority infrastructure programmes, but, once the will of the Parliament was made clear, this Government endeavoured to ensure that our involvement with the project followed good governance practice at all times. For that reason, it was essential that we provided 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 that grant conditions were applied in compliance with published guidance at all times.

Although I reiterate the fact that nine of the 10 lead criticisms in the report relate to matters that clearly lie within the responsibility of City of Edinburgh Council and TIE, I acknowledge that lessons must be learned from the report by all the parties involved. We will give full consideration to the recommendations and to any actions that follow, thereby ensuring that lessons are learned and that best practice is always followed for major project infrastructure.

I thank everyone who took the time to provide evidence to the inquiry, and I again point to the full co-operation of this Government. The provision of evidence that demonstrated a comprehensive, transparent and accurate view of events underpinned the approach that was taken to the inquiry by this Government, by ministers and by officials, and I commend that approach to Parliament.

The cabinet secretary will now take questions on the issues raised in her statement. I intend to allow around 20 minutes for that, after which we will need to move on to the next item of business.

I thank the cabinet secretary for providing advance sight of her statement.

After almost 10 years and £13 million of taxpayers’ money, there is very little in the statement to suggest that Scottish National Party ministers have accepted their role in the failures around the Edinburgh tram project. The former Deputy First Minister John Swinney is mentioned 156 times by name in the report, but not once did the cabinet secretary mention him in her statement.

The cabinet secretary has stated that the only cause of failure that is attributed to the actions of the Scottish ministers was the decision, following the debate in the Parliament in June 2007, to reposition Transport Scotland as principal funder as opposed to project partner. That is the understatement of the century. Lord Hardie states:

“The actions of the Scottish Ministers ... and ... the limitations imposed by them on the involvement of officials in 2007 was a serious error and resulted in the failure by the Scottish Ministers to protect the public purse”.

Does the cabinet secretary now accept that the decision to withdraw Transport Scotland was, indeed, a serious error? Who in the Scottish Government is taking responsibility for that?

Miles Briggs is absolutely right to point out that the cost of the inquiry and the time that it took to report are not satisfactory, although I have to say that those are matters over which the Scottish ministers have no locus whatsoever. Any interference on our part would have been rightly criticised. Questions about time and cost are for Lord Hardie.

I caveat Miles Briggs’s comments about responsibility by making it clear that I and the Government have considered carefully all the recommendations and findings. I again point him to the fact that one out of 10 of those—the final one out of 10—is attributed to the Scottish ministers and that a minority of recommendations are put to the Scottish Government. Many of the recommendations that apply to the Scottish Government were instituted years ago. Miles Briggs really ought to keep up.

I want to focus on the point about the principal finding of failure in relation to the Scottish ministers and about the separation of the roles. In my remarks, I narrated the fact that this Government came into government in 2007 not supporting the trams, but we were instructed to proceed by a vote in the Parliament, which I understand was led by an Opposition amendment from Labour’s Wendy Alexander. When we got that instruction to make the promised funding available, we did so, but that necessitated a separation of roles, with Transport Scotland, which had previously been part of project delivery, becoming the principal funder.

I want to quote Mr Heath of Partnerships UK, who was one of the only independent witnesses who commented on that point in the inquiry. He said:

“I think it was very sensible at the time. Complex projects require the simplest overall governance structure and reporting to both CEC and TS with inevitably different emphasis in their reporting requirements would have been unnecessarily burdensome and introduced potential decision delay and risk.”

Therefore, I do not agree with the finding.

First and foremost, it is important to acknowledge that, now that they have been delivered, the trams are running successfully and the feedback from the people of Edinburgh is largely positive.

It is clear that City of Edinburgh Council has recognised the errors that were made and has learned lessons from those errors in its successful delivery of phase 2 of the project. The council has had the good grace to acknowledge its mistakes and to apologise—something that the SNP Government seems incapable of doing. Even after the report and today’s statement, I still pose the question of what lessons the Scottish Government has learned. The report was damning of the Scottish Government’s involvement—or, indeed, non-involvement—in the project throughout Transport Scotland’s time.

The question, therefore, remains: is Transport Scotland fit for purpose, and does it have the capacity to provide oversight and support for the large-scale, multipartner infrastructure projects—

I call the cabinet secretary.

—that Scotland so desperately needs?

I call the cabinet secretary. Mr Rowley, please resume your seat.

Alex Rowley is right to mention that people in Edinburgh now enjoy the proper running of the trams and the fact that the council went on to produce successful additions. That probably underlines that Transport Scotland’s involvement was not required in those additional sections, and it probably undermines some of the report’s findings about our role at the time.

Transport Scotland is absolutely fit for purpose. Every day, my colleague Fiona Hyslop and I have the pleasure of working with many experts, who work exceptionally hard to ensure the running of our transport system and the development of major projects in Scotland. I was proud to reel off in my statement a number of successes: the Aberdeen western peripheral route, the Queensferry crossing and the Borders railway, among many others. I have absolute faith in Transport Scotland.

Ultimately, the report is a historical piece of work. Although we have considered very carefully all its recommendations, many of them are facets of the past, and the changes were instituted years ago.

The Scottish Government was clear in 2007 about its position on the Edinburgh trams and on the Edinburgh airport rail link that some members also wanted at that time, which would have taken even more millions away from the capital budget for other parts of the country. Will the cabinet secretary confirm that, after the Parliament voted to deliver the tram project, the Scottish Government provided assistance to those who were tasked with delivering the trams?

As I have highlighted, the outcome of that vote in Parliament in 2007 was instructive, and we respected it. We transferred accountability for the project to City of Edinburgh Council. That necessarily altered Transport Scotland’s relationship with the council. The decision to alter those governance arrangements was made in order to avoid any uncertainty about where leadership of the project lay and to ensure that Scottish ministers’ role was strictly as principal funders. Not only did that transfer do that—the evidence reflects that that was the right governance decision—but, arguably, it protected the public funds of the Scottish Government from being called on in future years as the project languished.

John Swinney is named throughout Lord Hardie’s report, and most of it is criticism. Lord Hardie said:

“Mr Swinney said that he would do nothing differently if doing the project again ... the conclusion of what I have considered ... is that that would be an error.”

Is that a valid finding?

I repeat the remark that I made in response to a previous question: the actions of John Swinney and the decisions that he took following the vote in the Parliament, which, I stress, was supported not by the Government but by the Opposition, not only created the right governance structure, with the separation of roles—I again point to the comments of Mr Heath of Partnerships UK—but ensured, arguably, that we were able to stick to what John Swinney said about providing £500 million and not a penny more, so the funds of the Scottish Government were protected.

The inquiry has taken a ridiculous amount of time and cost a ridiculous amount of money. It seems that some lawyers have no sense of urgency or of keeping to time. I take the cabinet secretary’s point that such inquiries have to be independent, but surely there is some way of putting a constraint on the length of time and the cost of them.

I understand the sentiment behind John Mason’s question. I agree with him, as I agreed with Miles Briggs, that the length of time that the inquiry took and the costs that mounted are not acceptable. To be frank, however, I stress again that the time that was spent and the costs that were incurred were not matters over which we had any say whatsoever, and it would have been wrong for us to have had any say over them.

However, we have been developing guidance on public inquiries to support not only the operation of inquiries but civil servants who support such inquiries. It is worth pointing out that, when we decide whether to convene a public inquiry, we must consider the costs that could arise from it.

The cabinet secretary’s answers have relied on the fact that Transport Scotland’s scope was reduced to that of being just a funder, but Lord Hardie found that the Scottish Government provided inadequate oversight of that funding. He described the Scottish Government’s reliance on “covert influence”, which involved no record or minute keeping.

Recommendation 12 outlines the key improvements that are needed for transparency and accountability. Will the Government commit to accepting that recommendation in full and reviewing its interactions with Transport Scotland and delivery partners?

I have pointed out that all the recommendations have been considered and will continue to be considered by Scottish ministers. Daniel Johnson mentioned the recommendation on record keeping, minuting and document retention. Such practices were instituted years ago; the report captures a period that is, to be frank, very much in the past.

The Scottish Government, Transport Scotland and Scottish ministers committed to supporting the inquiry fulsomely and in the best of faith. That included the provision of written and oral statements from everybody who was involved.

The Edinburgh tram inquiry has to lead to good governance in urban infrastructure projects and not to any hesitation to invest in the public transport networks that our cities and towns need. What assurance can the cabinet secretary give that the Government will continue to support mass transit projects, such as further Edinburgh tram expansion or the proposed Clyde metro?

It is apt to consider the learning from the Edinburgh tram project inquiry as we embark on the Clyde metro. I have mentioned a number of times that there are recommendations on light rail projects and engagement between Transport Scotland and local authorities, and we will take all of that on board. One recommendation is about Transport Scotland’s involvement in the delivery of projects. I have made it clear this afternoon that my view is that our decision in 2007 to separate the roles was right, and I would like that approach to continue as instituted.

On the Clyde metro, since publication of the strategic transport projects review 2, we have had a multipartner client delivery group, which includes Transport Scotland, Strathclyde Partnership for Transport and Glasgow City Council, to define better the scale of the work that the metro might represent and the associated governance around it. We will take into account the tram inquiry’s findings as we take that work forward.

Shopkeepers, business owners and residents in our nation’s capital have all been denied answers for far too long because of the time that the inquiry has taken to report. The inquiry did not happen in isolation; there are similar inquiries—particularly those on Covid-19 and on Professor Eljamel—that victims will be looking to for answers. What lessons can the Scottish Government learn from the time that was taken and the mistakes that were made in delivery of the tram inquiry?

I understand the interest in and the point about time and costs. I have noted that the Scottish Government has to consider those carefully when deciding whether to start an inquiry. However, members must understand that, once a decision has been made to institute an inquiry and once it has—as in this case—been supported to move to a statutory footing, ministers cannot dictate the time or the cost.

I note that one of Lord Hardie’s recommendations was about presenting only the net costs of public inquiries, less the costs for accommodation and staff. To be frank, I do not agree with that recommendation. Full transparency on costs and publication of them are in the public interest.

There are serious questions to be asked about the value of the inquiry report’s conclusions and whether they are sufficiently supported by the evidence. What process will the Scottish Government follow to identify the most valuable and evidence-driven recommendations in the report?

As I have said, the report contains 24 recommendations, a minority of which are directed to the Government. Those that relate to the Government concern administrative processes, records management, minute taking and some legislative aspects of setting up inquiries. We have considered all the recommendations, taking into account the length of time that has passed since the inquiry was originally set up and the extent to which a number of the recommendations are already standard practice—particularly those on records management, those on the legislative and practical aspects of setting up inquiries and those relating to project governance. I have already said—I will repeat it for the member’s sake—that we have already worked on guidance for public inquiries and their interaction with Scottish Government sponsored bodies and, equally, for civil servants in order to help them to interact with inquiries.

In response to the inquiry, the charity Living Streets highlighted the accessibility challenges that are faced by people who walk, wheel and cycle and who then want to integrate their journeys with the tram. Are there lessons to be learned about how those groups will be engaged with and their needs taken into account in the design and procurement processes of future transport projects?

There absolutely are such lessons. I point out, for the record, that design and procurement were matters for the project leads, namely City of Edinburgh Council and TIE, and not for the Scottish Government. However, everyone has lessons to learn about the development of such projects.

I assure Mark Ruskell that suitable provision for all users, including pedestrians, cyclists and wheelers, is a really important part of Scottish Government infrastructure projects, as is engagement with community and interest groups. We put that at the heart of development of our projects. Impact assessments that are prepared at the early stages evolve throughout the development of any policy, and they always require engagement with the people who are affected. We will continue to practise that approach.

Councillors rely on the accuracy of reports to enable them to take informed decisions, but on the Edinburgh tram project it is clear that councillors were misled by high-level officials at City of Edinburgh Council. In the inquiry’s report, Lord Hardie blasts Nick Smith of City of Edinburgh Council’s legal department for making inaccurate reports to councillors. Will the cabinet secretary lay out what action will be taken to hold to account those who are responsible? What reforms will be put in place to prevent that from happening again?

Ms Webber is absolutely right to highlight a part of the report that particularly stood out for me, too. I am sure that City of Edinburgh Council, and local authorities throughout Scotland, will give considerable thought to that.

As for what the Government can do, the report recommended to us the development of specific sanctions under the civil law of damages, and made a call for a criminal statutory offence. We are giving careful consideration to both those recommendations. Our current view is that there might already be provision for such developments under the civil law of delictual liability and the criminal common law of fraud, but we will continue to consider the matter.

In the time that it has taken for the inquiry to conclude, the previous Scottish National Party-led Administration at City of Edinburgh Council approved an extension of the tram line to Newhaven, which successfully opened to the public this summer, on time and within budget. Edinburgh residents can take some satisfaction from the fact that lessons were clearly learned from the first tram scheme. Does the Edinburgh tram inquiry report provide, for mass transit in Scotland, any further lessons that have not already been applied in the past nine years?

Jackie Dunbar makes a good point. The extension of the tram line to Newhaven was delivered on time and within budget. I add that that was thanks to the strong leadership and hard work of SNP councillors. However, that also underlines the point about the principal finding of failure, in the inquiry’s view, in the role of Transport Scotland and the appropriateness of separating roles. I agree that it was appropriate to separate them. The work to Newhaven demonstrates that Transport Scotland’s involvement was not required.

As I have said to a number of members, the report contains a suite of recommendations, a minority of which apply to the Scottish Government. Many of them were instituted years ago, but we will continue to consider the remainder.

The inquiry clearly shows that the Scottish Government walked away from the major capital project. Recommendation 10 in the inquiry report advises Scottish ministers to consider

“establishing a joint working group consisting of officials in Transport Scotland and representatives of the Convention of Scottish Local Authorities ... to consider how best to take advantage of ... the necessary skills and expertise within Transport Scotland”

to deliver future projects on time and within budget. Will the Scottish Government implement that recommendation in future large infrastructure projects?

We will consider that recommendation on a case-by-case basis. The recommendation itself applies only to light rail, so that minimises the cases that it could apply to, but we will absolutely consider it. However, I must again reiterate that the inquiry heard evidence that separation of roles, which took Transport Scotland from being a funder in principle to principal funder, was good governance. I have already quoted some independent witnesses to the inquiry.

I also point to the 2011 Audit Scotland report, which took note of that move and the separation of roles but made absolutely no adverse comment about it at the time.

That concludes questions on the statement.

On a point of order, Presiding Officer.

Earlier, you quite rudely stopped me as I was trying to finish my question. Can you reflect on the time that is given for questions on statements, as opposed to the time that we spend on debates? If we are going to hold the Government to account, we should be able to put questions and do so without being stopped in full flow.

Mr Rowley, please resume your seat. That is not a point of order. I was not rude; I was going by what was agreed by the Parliamentary Bureau with regard to timings for the statement, which involved an opening question from the main Opposition party of one minute and 30 seconds, and a minute for a question from the Labour front bench. I would have thought that you have been in Parliament sufficiently long to know that, Mr Rowley. I also think that you are coming pretty close to challenging a ruling of the chair.