Merseytravel panned over tram cash

23 January 2008

The Audit Commission has slammed Merseytravel for its management of the Merseytram scheme, which was abandoned in November 2005, at a cost of £70M.

The scheme was dropped after the money had been spent on the development, design, legal processes and financing, land acquisition and preliminary construction of the three-line tram network.

District auditor, Judith Tench, said Merseytravel paid insufficient attention to risk management, and should not have committed its resources at such a rate before key elements of the funding package were secure.

Mrs Tench said that, although risks relating to the scheme’s construction and engineering were clearly identified and well managed, ‘arrangements for managing business risks were inadequate, and I have seen no evidence of a formal strategy for managing funding risks’.

She also criticised the authority for inadequate financial reporting and monitoring arrangements to show its ongoing expenditure on the scheme represented value for money. Merseytravel’s lack of engagement with local district councils also came under fire. Had it engaged with all of the district councils earlier, Tench said, those districts might have taken a ‘different view when asked to commit to the scheme’.

Finally, Merseytravel’s governance and management arrangements ‘provided limited opportunity for challenge, and too much reliance on too few individuals’.

However, the district auditor also acknowledged criticisms of the DfT by the transport select committee, and the National Audit Office in its recent report into the proposed light rail schemes in Leeds, South Hampshire and Manchester, about the time it took to consider tram schemes.

Neil Scales, chief executive of Merseytravel, said the commission did not take into account the political environment surrounding the scheme. ‘We faced a situation in which the goalposts were constantly being moved and where, with hindsight and given that many other light rail schemes were facing similar difficulties, it is now fair to conclude that the DfT was reluctant to fund any light rail projects,’ he said.

He also claimed the ‘normally-excellent working relationship we have with our five partner district councils was being undermined by a small group of “rogue” officers within Liverpool City Council who are no longer with that authority’. A spokesman for Merseytravel told Surveyor it was confident the tram would still go ahead.

Public interest report on Merseytram

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Merseytravel panned over tram cash

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