Ministers repeatedly gave more public money to project despite warnings against doing so, National Audit Office report finds

Ministers have repeatedly given more public money to London’s planned garden bridge, despite official advice against doing so, and risk losing more than £20m if the controversial project is cancelled, according to a report from the National Audit Office (NAO).

Civil servants were so worried about the scale of public underwriting of the scheme that they sought rare formal direction from ministers instructing them to commit extra funds to it, prompting David Cameron and George Osborne to express their frustration at delays to funding for the project.

The NAO, the independent government spending watchdog, noted a “pattern of behaviour” in which the Garden Bridge Trust, the charity behind the Thomas Heatherwick-designed project, repeatedly asked the government for more money when it encountered any challenges, which was then granted.

The findings cast additional doubt on the heavily delayed scheme, which faces severe difficulties. Last month, the London mayor, Sadiq Khan, set up an inquiry into the use of a combined £60m of public money, much of which has been spent before construction has begun.

The initial decision to support the project came in 2013, when the then chancellor Osborne agreed to channel £30m through the Department for Transport (DfT). This happened, the NAO report found, despite questionable transport or tourism benefits from the footbridge across the Thames, between Temple and the South Bank.

Ministers initially set an £8.2m limit on how much of the £30m could be spent on pre-construction work for the tree and plant-filled bridge. However, this limit was then raised twice, to £9.95m in June 2015 and by another £3.5m the following year.

The report said: “Officials from the department advised ministers against increasing the department’s exposure for the second and third increases.”

There was particular worry among civil servants earlier this year, when the DfT also agreed to guarantee £15m in other costs if the project were cancelled. They warned that the department was “at the very limit of what he [the DfT’s accounting officer] regarded as proportionate or prudent financial exposure”.

It was at this point that officials sought ministerial direction from the then transport secretary Patrick McLoughlin, prompting annoyance from the then prime minister and chancellor in a memo to the department.

Meg Hillier, the Labour MP who chairs the public accounts committee, likened the pattern of repeated requests for more public money to the collapse of charity Kids Company. “It worries me that whenever the Garden Bridge Trust runs into financial trouble, the Department for Transport releases more taxpayers’ money before construction has even started,” she said. “If the project collapses, taxpayers stand to lose £22.5m.”

Tim Farron, the Liberal Democrat leader, said the bridge was “a vanity project” for Boris Johnson, who had championed the scheme as mayor, and that it was up to Khan to quash it. “It is an unnecessary expenditure and will have little benefit to Londoners,” he said.

While the cancellation guarantee was later reduced from £15m to £9m, the NAO found that the government’s liabilities towards the scheme stand at £22.5m if the bridge is not built, which the report says is possible.

“There remains a significant risk that the project will not go ahead,” it said. The Garden Bridge Trust has yet to secure the necessary sub-lease on the area of the South Bank where the bridge will land, the report notes, while the main contractor has been put on standby and construction has been delayed for at least 18 months.

The DfT receives written monthly updates from the Garden Bridge Trust on the project, but these do not contain “standard project performance information,” such as progress against schedule and budget, or details of the trust’s progress against fundraising targets, the NAO noted.

Public investment accounts for £60m of the scheme’s projected £185m cost, of which Transport for London provided £30m, with £20m of this later turned into a long-term loan. The remainder is still being raised from private donors.

In a statement, the Garden Bridge Trust said it was creating “a visionary project” and welcomed proper scrutiny. The £60m of public money was “always intended to kickstart private investment,” the trust said, arguing that the total cost to the taxpayer would be no more than the pedestrian Millennium Bridge.

“The trust has not [asked] and is not asking for additional funding,” it said. “We are grateful for the support of the government and the mayor of London as we embark on raising the final private funding.”

The junior DfT minister Tariq Ahmad said the department would “consider the NAO’s findings carefully”.

“The government remains supportive of the garden bridge project and ministers took into account a wide range of factors before deciding whether or not to make funding available,” he said.

“The taxpayer, however, must not be exposed to any further risks and it is now for the trust to find private sector backers to invest in the delivery of this project.”