Snipe - The Scoop

Friday, 5 June 2009

The Collapse of Metronet cost us up to £410 million

On any other day, the government losing up to £410 million of our money would be big news, but not today.

The National Audit Office report on the collapse of Metronet traces the long history of Gordon Brown's failed public-private financing of the Underground.

The report, say the Liberal Democrats, is "a simply devastating" indictment of the Prime Minister, or at least it would have been if anyone was paying attention.

Among it's findings are that:

  • There were "few formal levers" set up to manage risks to the taxpayer
  • Metronet London Underground and the DfT were hampered by "a lack of good information"
  • Of the £1.7 billion cost of repaying Metronet debts, up to £410 million is an outright loss to the taxpayer.

The private-public partnership was forced through by Gordon Brown against the wishes of the then Mayor of London Ken Livingstone.

This deal has not only lead to stupendous losses, but also to severe delays to the much needed modernisation of the Tube.

BBC London are leading on the story but for some reason the Evening Standard have only given it a cursory mention.

But as all eyes fix on the resignations of "a narrow clique of hard right-wingers" within the Labour cabinet, it's worth remembering what the real failures of this government have been.

12 comments:

Anonymous said...

It's not just metronet. The whole privatisation experiment championed by the tories and embraced by new labour has been a disaster that will take decades to unravel. Labour deserve to lose just for this.

AdamB said...

" has been a disaster that will take decades to unravel"

By who? The Tories?

Appealing of Ealing said...

"But as all eyes fix on the resignations of "a narrow clique of hard right-wingers" within the Labour cabinet, it's worth remembering what the real failures of this government have been."

Yes, this being just one of many. Anyone with an ounce of business acumen could tell that tube modernization was never an appropriate candidate for PPP. Worse -- having gone ahead with their dumb idea, they set up an unbelievable project management structure that was never going to work.

Thanks for the Ken link BTW, "more radical economic policies", "nationalisation", "direct government control" -- what a hoot!

Appealing of Ealing said...

"By who? The Tories?"

Why don't you answer your own question?

AdamB said...

"Why don't you answer your own question?"

Well there's not much chance of the Tories 'unravelling' inappropriate privatisations if that's what you mean. More of the same, but this time done without any resistance from the backbenches.

Tom said...

"Thanks for the Ken link BTW, "more radical economic policies", "nationalisation", "direct government control" -- what a hoot!"

The NAO report on Metronet specifically criticised the lack of direct governmental control, to bring this back to the point. I think we can chalk opposition to PPP on the plus side of the Ken Ledger, frankly. Don't you agree, AoE?

AdamB said...

Ah but "Anyone with an ounce of business acumen could tell that tube modernization was never an appropriate candidate for PPP"

AofE was no doubt fighting Ken Livingstone's corner back then I'm sure.

prj45 said...

Was anybody? All we had as far as I recall were people moaning about how much of our money Livingstone spent in the courts trying to stop this ridiculous boondoggle.

Clearly a bt more of our money should've have been spent.

Appealing of Ealing said...

In fact I was never a supporter of PPP, and I always agreed with the Livingstone / Kiley position in relation to the tube.

Perhaps it's a revolutionary concept, but if I agree: I agree. Promoting some old political dogma, left or right, for me is a waste of time. So even if it means agreeing with the dreaded Ken, better to try to just tell it like it is, (and maybe make some humorous mischief along the way). Life is short.

As for direct government control, it really depends on what you mean. I'd simply make the point that lack of government control is in itself a failure in government control -- therefore an assumption that more is necessarily better, is not logical captain. Better is better.

Appealing of Ealing said...

"AofE was no doubt fighting Ken Livingstone's corner back then I'm sure."

Tooth and nail my friend

(You old cynic!)

Appealing of Ealing said...

prj45 said...
"boondoggle"

Great word. Thank you.

barry rochford said...

Privatisation was supposed to solve all problems. Public money would be saved. Until private moneyb wasn't invested but instead private owners could cream off profits till the companies collapsed. They used to be known as commercial banks. They are now known as nationalised banks because had they not been nationalised they wouldn't exist.
Of course, pouring money into the banks who failed to invest in the first place was crazy - what is needed is a state run investment bank.
The free marketeers out there think that the private investmetn model needs to re-run.
Only state run investment into the infrastructure can work now.
The market - sorry some of you out there refuse to realise this - cannot deliver. Large scale private funds are not interested in long term infrastructure as there's no quick profit there.
Perhaps if you disagree you'd consider why none of the private projects that Boris has tried has got off the ground. Not one.
It's not through lack of trying.