NAO: Crossrail delivery ‘damaged public value’

The way in which the delayed Crossrail project has been delivered has “driven unnecessary costs and damaged public value”.

That’s the conclusion of a report published today by the National Audit Office, which also warned that until the Elizabeth Line is open, it won’t be possible to determine the overall value for money for taxpayers.

It said that Crossrail was “past the point of no return” with nearly £16bn spent, tunnelling completed in 2015, and trains already ordered.

It urged Crossrail to focus on completing its plans and delivering against them, after it last week announced that it would introduce Elizabeth line services on the central section between October 2020 and March 2021.

In February 2019, the NAO published a memorandum on Crossrail for the Public Accounts Committee (PAC) which examined the project’s overall progress, costs and potential for future delays. PAC concluded that final costs remained uncertain and that there was no date for when the railway would be fully operational.

In today’s report, the NAO has further identified how the programme ran into difficulty, which has so far led to £2.8bn of additional financing for the programme, including around £2bnof loans from the government to the Greater London Authority and Transport for London. A compressed schedule, the contractual model, the loss of downward pressure on costs, and the absence of an achievable plan were set against an atmosphere where “can do” became unrealistic, the NAO concluded.

Delivery date increased risks

It found that the programme has been dominated by a fixed completion date of December 2018 set by Crossrail and the joint sponsors, the Department for Transport (the Department) and TfL. “This date drove much of Crossrail’s decision making. Aiming for December 2018 meant multiple activities ran in parallel. The delivery approach, delays to some contracts and the decision to set and then stick to the December 2018 opening date, increased risks,” it added.

Nonetheless, Crossrail did not start to produce a sufficiently detailed delivery plan against which to track progress until late 2018, despite the deadline, the NAO found. 

It also concluded that by 2015, problems started to emerge on Crossrail and opportunities to change approach were missed. The sponsors had few effective contractual levers to enable them to take action as they had provided Crossrail with a high degree of autonomy to deliver the programme.  

Changes required to the design and to contractors’ delivery schedules has increased costs on most of the 36 main contracts. These changes resulted in increased contract costs of around £2.5 billion between 2013 and 2018, of which £900 million was through the renegotiation of contracts to settle historic contractor claims.

Pressures on the programme continued to escalate through to the end of 2018. Between February 2017 and December 2018, for example, the forecast final cost of the contract to install track and key systems in the tunnels increased by 80% from £532 million to £956 million.  

Unnecessary cost

Crossrail also made decisions that drove unnecessary cost, the NAO found. It highlighted the example of how, in early 2018, Crossrail carried out train testing and construction activity in alternating time periods, to allow for early sight of potential train and signalling system issues. However, this testing was of limited use and took any spare time and space from construction workers on site. Crossrail also reduced the size of its central programme and risk management teams during 2018, in anticipation of the programme reaching completion in December 2018 and is now attempting to rehire these personnel.  

Amyas Morse, the head of the NAO, said: “Throughout delivery, and even as pressures mounted, Crossrail clung to the unrealistic view that it could complete the programme to the original timetable, which has had damaging consequences.

“DfT and TfL must support the new Crossrail executive team to get the railway built without unrealistic cost or time expectations.

“While we cannot make an overall assessment of value for money until Crossrail is complete, there have been a number of choices made in the course of this project that have clearly damaged public value.”