- The Guardian, Friday 15 April 2005 02.24 BST
The government's battle with Ken Livingstone over the part-privatisation of the London Underground left taxpayers nursing a bill of £40m, according to civil service documents released under the Freedom of Information Act. A Department for Transport analysis says it is "reasonable to assume" that legal challenges by the mayor of London in 2002 delayed completion of the public-private partnership (PPP) by six months. Mr Livingstone tried to stop the deal, claiming it was poor value and potentially unsafe.
Civil servants calculated that legal and advisory fees related to two judicial reviews amounted to £4.2m. But, in a much bigger blow, the government had to pay £6m a month to reimburse the running costs of the PPP's private consortiums - Tube Lines and Metronet - up to the point when they took over the tube.
The DfT's document says: "Bidders estimate their additional costs incurred as a result of the delay at £6m per month. On this basis, the six-month delay has cost bidders, and ultimately taxpayers, £36m."
The disclosure is likely to heighten criticism of the PPP's cost. MPs on the Public Accounts Committee last month criticised the "enormous cost to the taxpayer" of setting up the scheme, which they put at nearly £1bn. However, it provoked a vitriolic reaction from Mr Livingstone's Transport for London authority, which said its legal challenges were not responsible for the lengthy time taken to sell off the network.
A TfL spokesman said: "The real delays were caused by the huge complexity of the PPP contracts themselves and by the decision of London Underground and the government to move to preferred bidder status far too early in the process."
Under the PPP, Metronet and Tube Lines took 30-year leases on the tube's tracks, stations and rolling stock and were charged with modernising the network. LU continued to operate services. It was seen as the high point of the government's policy of involving the private sector in public services.
