The Department for Transport has come under renewed criticism from parliament’s public spending watchdogs for its oversight of the late-running and massively over budget Crossrail project.
MPs on the Public Accounts Committee said the department had yet to “get a grip” on the troubled trans-capital rail line. They said DfT had both failed to learn lessons from problems with the Thameslink and Great Western modernisation programmes, that staff had lacked the knowledge to judge how realistic delivery body Crossrail Ltd’s plans were.
The Crossrail project is now running £2.8bn over budget, with a current estimated £17.6bn price tag. Its main central London section – linking Essex and south-east London with Reading and Heathrow to the west of the capital via 26 miles of new tunnels – was due to open in December last year. But it is now not expected to be operational until the end of 2020 at the earliest. MPs said today that the full line “may not open until late 2022”.
MPs said that as Crossrail Ltd had “not determined and agreed” a final opening date for the line, costs were likely to continue to climb beyond the current £17.6m projection – and that Transport for London would not receive the anticipated fares revenue from the project for the public purse until the new line was running.
DfT and the mayoral transport body are joint sponsors of the project, although Crossrail Ltd is wholly owned by TfL. Nevertheless, MPs said DfT was “ultimately responsible” for the use of taxpayers’ money on the project, even though the way the delivery company had been set up meant it had been left with “limited powers to step in and take action” when the programme had faltered.
The report said it was “unacceptable” that the department had presided over the creation of a governance structure for the project for which it was ultimately responsible, but which the department now acknowledged represented an “extreme” version of autonomy.
The PAC report said Crossrail Ltd “failed to understand the complexity and risks involved in the programme, failed in its management of its main contractors and failed to integrate different strands of the programme successfully”.
Damningly, it said that while DfT officials affirmed Crossrail Ltd had presented its proposals to the project sponsors as a “fully integrated plan to complete the programme”, this was because the plan had not been scrutinised properly
“Some of the causes of cost increases and delays on Crossrail relate to the poor integration of complex IT and operational systems and the lack of a fully integrated plan to complete the programme,” the report said.
“It is now apparent that the department did not understand what a fully integrated plan looks like, and therefore was unable to scrutinise the Crossrail Ltd executive effectively on the realism of its plans.”
The report said planning and integrating various elements of major programmes had been a key learning point from issues with the Thameslink and Great Western projects, but that DfT had “failed to ensure” Crossrial Ltd gave enough attention to them.
PAC chair Meg Hillier said delay and being over budget now appeared to be “par for the course” with major rail projects.
“Crossrail Ltd has failed to understand the complexity and risks of Crossrail, to manage its main contractors, and to integrate different strands of the programme successfully,” she said.
“The Department for Transport is ultimately responsible for the use of taxpayers’ money on Crossrail; it still does not appear to have got a grip of the problems.
“It has also failed to get a grip of Crossrail Ltd, continuing to pay its executives bonuses, despite the programme going off track.”
The PAC report noted that despite the price hikes and delays Crossrail Ltd had continued to pay its executives bonuses, even as the programme was going off track. Then-Crossrail chief exec Andrew Wolstenholme was paid a bonus of £481,000 for performance in 2015-16 and £160,000 for 2016-17, the report said.
The PAC report said that DfT had insisted it was important that remuneration levels for those delivering large projects allowed for the recruitment of people with the right level of skills and experience.
But MPs said that in the case of the Crossrail project, sponsors “did not provide enough oversight of, and challenge to, remuneration decisions made by Crossrail Ltd” and they noted previous concerns over DfT’s oversight of redundancy payments at HS2 Ltd.
They called on the department to carry out a full review of pay and redundancy arrangements at its delivery bodies and set out how it will ensure they align with “the overall success of projects” and how DfT will “maintain appropriate control and oversight” over what top-earners get.
DfT told Civil Service World it had “consistently challenged” the leadership of Crossrail on the delivery of the project.
“When problems became clear the department acted swiftly and effectively, changing the leadership of the board and strengthening governance structures,” a spokesman said.
“The new Crossrail Ltd management team has now produced a new plan to open the railway, and the department and TfL will continue to scrutinise progress to ensure this happens as soon as possible.”
DfT said it and TfL had undertaken a review with the Infrastructure and Projects Authority to “identify transferable lessons” from Crossrail for other major projects, including HS2 and rail timetabling.
It added that the majority of the additional funds needed to complete the project would be “funded by London”, not UK taxpayers.