Hansard

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.