The Department for Transport has been criticised for exercising poor governance over the £17.6bn late-running Crossrail project and told to explain what consequences the highly-paid executives in charge face for its failings.
In a brief but damning report on the east-west rail link for London, parliament’s Public Accounts Committee said it was “becoming increasingly alarmed at the continual shortcomings [its] work has highlighted in the department’s project management”.
MPs said that after years of Crossrail being billed as “on time and on budget” for the December 2018 opening of its main tunnelled section through central London, there was an “incongruity” about how significant delays announced last August had emerged so quickly.
They questioned DfT’s assertions that lessons were being learned from what had gone wrong with the project. “We were not convinced that [the department] had a grip on the root causes of the delays and cost overruns, which must be established before lessons can be learned,” they said.
The report said work on most of the project’s new stations had “started to slip in 2016”, while an electrical fire in 2017 had cost the schedule three months alone. It said DfT’s project representative gave an internal status report in May last year warning of a “high risk” the December delivery date would be missed.
But despite these warning signs, the official “on time and on budget” mantra continued until late last summer.
Crossrail is designed to deliver extra rail capacity for the capital by linking Reading and Heathrow in the west to Shenfield in Essex and Abbey Wood in south-east London via 26 miles of new tunnels and 10 new stations.
It is being delivered by arm’s-length body Crossrail Limited, which is jointly sponsored by DfT and Transport for London. Its project budget was set at £14.8m in the 2010 Spending Review, but an additional £2.8bn of funding was agreed last year.
Crossrail Limited has yet to set at new opening date for the line’s main section, but has indicated that it will be in 2020. PAC said it was “not convinced” services would start to run in 2020, or that the department knew how much it would cost to complete the project.
MPs said new Crossrail Limited chairman Tony Meggs – former chief executive of the Infrastructure and Projects Authority – had described the organisation as having been given “extreme autonomy” that, with hindsight, should have had more scrutiny.
The committee noted that Crossrail Limited had been given the flexibility to pay market rates to attract top talent, but said the company and the department had been “unwilling to pinpoint responsibility” for delays and cost overruns.
“We heard repeatedly that this was a ‘system failure’,” the report said. “The department summarised this as Crossrail Limited failing to identify systemic risk, Crossrail Limited’s board not challenging Crossrail’s executive team and the reporting of progress, and the department failing to properly challenge the information that Crossrail Limited was reporting to it.”
Senior leaders at DfT bodies such as HS2 and Network Rail routinely top the annual public-sector high-earners data published by the Cabinet Office, but PAC said some of Crossrail’s former executives were paid “much more” than those counterparts.
Former Crossrail Limited chief executive Andrew Wolstenholme, who stepped down last year, was paid “approximately £1.7m” for the two years to the end of March 2018, the committee said.
When Wolstenholme’s departure was announced last March, transport secretary Chris Grayling his leadership of the project had been “critical to its success to date” and that he would “leave a lasting legacy across the industry”.
The committee gave DfT until the end of this month to “clearly articulate” which elements of the project it, TfL and Crossrail Limited were responsible for and “what the consequences have been for those senior officials in positions of accountability and responsibility for failures on the programme”.
Committee chair Meg Hillier said all three organisations had continued to put a positive face on the programme long after it became clear that it would not hit its December deadline.
“Wishful thinking is no basis for spending public money and there remain serious risks to delivering this programme, with a revised schedule and costings for completing the work still to be agreed,” she said.
“It is unacceptable that parliament and the public still do not know the root causes of the failures that beset this project.
“Nor will we accept the department and Crossrail Limited’s description of these serious problems as ‘systems failures’.”
A DfT spokesperson said the department had “consistently challenged” Crossrail Limited's leadership on the project's delivery, “acted swiftly to identify lessons” and changed the make-up of the Crossrail board.
“It is deeply disappointing that the Public Accounts Committee – which previously described the oversight of Crossrail as a ‘textbook example’ of governance – has not recognised any of the steps that have been taken to ensure delivery of this vital project while protecting taxpayers,” they said.
The spokesperson also criticised the committee’s suggestion that DfT adopted a “laissez-faire” attitude to the project’s need for an additional £2.8bn in funding last year.
“The department absolutely rejects this claim and we are disappointed that the PAC has chosen to represent actions taken to learn and implement lessons in a wholly negative way,” they said.