Charity Commission slates garden bridge project as ‘failure for charity’
The ‘high profile and expensive failure’ of a £50m project to build a garden bridge across the Thames in London, which was set up as a charity to raise funding, has been described as a failure for charities, policymakers and the regulator itself, according to a report by the Charity Commission
10 Apr 2019
The regulator’s report on the Garden Bridge Trust concluded that even though trustees complied with their legal obligations and that there was no mismanagement, the fact that £50m of public funds were spent by a charity and produced no demonstrable public benefit or impact represented a failure for charity which risks undermining public trust.
The report acknowledges that the trustees of the charity fulfilled their legal duties in their decision making and that the charity was not mismanaged. However it is critical of the charity’s approach to transparency and accountability.
Baroness Stowell, chair of the Charity Commission, commented: ‘Londoners and taxpayers will legitimately feel angry and let down by the waste of millions of pounds of public money on a charitable project that was not delivered. I understand that anger and am clear that this represents a failure for charity that risks undermining public confidence in charities generally.
‘While the charity was not mismanaged, the public would also expect, as I do, that the right lessons are learnt from this case, so that we don’t see a similar failure arising in future.’
As a result of this case, the Commission is advising that policy makers ‘think very carefully’ before setting up an entirely new charity to deliver a singular public project or purpose. The regulator says it considers it ‘unlikely that the public would expect risks that are inherent in a major public infrastructure project to be outsourced to such a charity.’
The Commission says it will update its approach when it receives applications from charities established for the sole purpose of delivering a publicly funded infrastructure project.
The regulator says it will engage with those seeking to establish charity wholly or mainly to deliver a publicly funded project to ensure they understand the consequences and responsibilities that follow, including the need to meet the public’s expectations around transparency and financial stewardship.
It also says trustees of charities that receive public funds to deliver public services or projects should demonstrate scrupulous accountability and a spirit of transparency and openness to the public.
The report emphasises that ‘the legal minimum set out in the accounting framework should be viewed as just that: a minimum, not an aspiration'.
The Commission’s final report complements the regulator’s 2017 regulatory report into the management of the Garden Bridge Trust, and sits alongside reports by Margaret Hodge MP and the National Audit Office (NAO), which have examined the project with different expertise and from different perspectives.
Hodge’s report for London mayor Sadiq Khan found the costs had escalated from an early estimate of £60m to over £200m at the time of the review in 2016. There was a gap in capital funding of at least £70m, while very little progress has been made on raising money to fund the ongoing maintenance of a completed bridge. The review described the charity’s finance as ‘in a precarious state and many outstanding risks remain unresolved’.
The NAO considered whether the Department of Transport’s £30m grant to the garden bridge project represented value for money, concluding that it had had failed to implement its policy of putting a cap on how much of the funding could be used for pre-construction activity.
The report stated that ‘the pattern of behaviour outlined in this report is one in which the trust has repeatedly approached the government to release more of its funding for pre-construction activities when it encounters challenges. The department, in turn, has agreed to the trust’s requests.’
Report by Pat Sweet