£40m spent on trams had to be cut from vital services

MORE than £40million of vital services including child and family care have been slashed to pay for Edinburgh’s trams debt, an inquiry heard yesterday.

Of the £145million of services cut by City of Edinburgh Council in the past three years, nearly a third could have been avoided had the tram project not run dramatically over-budget.

The tram scheme was supposed to cost £375million but after delays and disputes it opened three years late in 2014 at a cost of £820million.

Giving evidence to the Edinburgh Trams Inquiry, city council accountant John Connarty outlined the ongoing radical cuts to spending in the wake of the doomed project.

To pay for the overspend, the council was forced take out a 30-year loan on which interest payments are projected to reach £182million.

The figure brings the total cost of the project to more than £1billion and will leave the council paying back £14.3million a year for the foreseeable future.

Inquiry counsel Euan Mackenzie, QC, worked through council ledgers, pointing to where the tram debt might be blamed for otherwise avoidable cuts.

He said that in 2015-16 ‘there required to be a saving of £11.9million in the children and families budget’ which includes family support, disability assistance for children and adoption and fostering services.

He added: ‘I just point to that as an example of where the money could have been spent instead, if these additional sums had not been spent on the trams.’

In 2016-17, he added, ‘the communities and families budget has a similar “saving” of £12.5million’. The 2017-18 sheet also showed cuts of £7.3million were made to the communities and family budget.

The spreadsheets indicate that, were it not for the trams fiasco, children, families and communities would be £32mil- lion better off – and the council could have avoided £11million of cuts elsewhere.

In a later inquiry session, the acting head of the Scottish Police Authority (SPA) was dragged into the row over tram project mismanagement.

Civil servant Kenneth Hogg, who took over from John Foley amid questions over his leadership of the SPA, was previously a non-executive director with Transport Initiatives Edinburgh, the body tasked with overseeing the tram project.

In his statement to the inquiry, Mr Hogg heaped blame on the construction consortium of Bilfinger Berger and Siemens. His statement read: ‘The companies which comprised the consortium which was appointed as preferred bidder had every opportunity to exercise due diligence over the contract they were about to sign.

‘Bilfinger Berger therefore understood entirely what they were getting into in return for how much money, and understood the contract to which they had had an opportunity to negotiate amendments during the preferred bidder period.

‘And yet, having signed the contract, Bilfinger Berger then did not mobilise in accordance with the agreed schedule.’

The inquiry continues.