ALTERNATIVES
14. Neither the Department for Transport, Local Government
and the Regions nor London Underground have developed a serious
alternative to the PPP. Indeed, the Secretary of State cited the
lack of an alternative as a good reason to proceed with the contracts.[15]
The Treasury has shown itself unwilling to consider funding alternative
options. There has been a failure on the part of both the Department
for Transport, Local Government and the Regions and London Underground
Limited. The failure to develop any alternative plan meant that
the value for money test could only ever have one answer.
15. The improvements which the PPP will produce
are much less than was originally expected. The Committee believes
that an alternative to the PPP could be developed that would deliver
greater benefits to the travelling public over the next 7½
years. In the last few years delays in improving the Underground
have been caused principally by withholding adequate levels of
grant support whilst the PPP was developed. Investment is needed
urgently but with proper Government support it can commence at
an early date. An alternative to the PPP would not lead to several
more years of the status quo unless the Government delayed making
a commitment to provide the same levels of funding which it has
currently promised to the PPP.
16. It is a failure on the part of the Secretary
of State that no appraisal has been undertaken as part of the
decision-making process of the alternatives being put forward
by TfL, which appear to this Committee to offer material and rapid
benefits to the travelling public in London. The Secretary of
State's evidence suggesting that Ernst and Young addressed this
issue is mistaken.
Conclusions
17. £100 million has been invested in developing
and assessing the PPP contracts. After an exhausting four year
process there are considerable vested interests in seeing the
deal completed. However, the evidence we have taken to date shows
that the basis on which the decision has been taken is flawed.
The shifting sands of the rationale for, and the assessment of,
the PPP have lead to a process that has lost all credibility in
the eyes of the public and professionals in the field. Parliament
must now have the opportunity to have an unfettered debate on
the decision to proceed with the PPP. It is essential that
the Government allows Members a debate and vote in the House of
Commons on a substantive motion on the future of the London Underground
and the PPP.
1 Second Report of the Transport, Local Government
and the Regions Committee, London Underground, HC (2001-02)
387-I. Back
2
London Underground Limited Public Private Partnership Final Assessment
Report, London Underground, 7 February 2002. http://www.thetube.com/content/unblock/pppreport/ Back
3
HC Deb, 7 February 2002, cols1103-4W. Back
4
London Underground PPPs Value for Money Review. Independent Review
for the Secretary of State for Transport, Local Government and
the Regions, Ernst & Young. Back
5
HC Deb, 7 February 2002, col 1128 Back
6
HC Deb 7 February 2002 col 1128 Back
7
London Underground PPPs Value for Money Review. Independent Review
for the Secretary of State for Transport, Local Government and
the Regions, Ernst & Young. (Page 1) Back
8
Ibid. (Page 1) Back
9
Ibid. (Page 6) Back
10
Q109 Back
11
London Underground PPPs Value for Money Review. Independent Review
for the Secretary of State for Transport, Local Government and
the Regions, Ernst & Young. (Page 61) Back
12
Ibid. (Page 15) Back
13
Qq 92, 109 Back
14
Q 135 Back
15
HC Deb 7 February 2002 col 1128 Back