EY to vet £14bn PPP plan to upgrade the Tube

Click to follow

The government has revealed that it brought in consultants to vet independently its highly controversial £14bn upgrade scheme for London Underground.

Ernst & Young has been commissioned by the Department of Transport, Local Government and the Regions to carry out an independent review of the value-for-money evaluation that London Underground and its advisers – PricewaterhouseCoopers and Ove Arup – are making.

While PwC and Ove Arup, an engineering consultancy, are working for the Tube, in its negotiations with bidders, Ernst & Young will oversee the process on behalf of ministers.

The Government has been stung by the unpopularity of PPP schemes and opposition to modernising the Tube under this arrangement from the Mayor of London. Yesterday the DTLR said that bringing in yet more consultants was designed to ensure the deal only went ahead if it passed value and safety tests.

A spokesperson said: "It is absolutely true that the PPP will go ahead only if it provides value for money and the safety arrangements are accepted by the Health and Safety Executive. The Government has always made that quite clear from the very start of the process."

Transport for London, the Mayor's transport department, has hired Deloitte & Touche to conduct a financial analysis of the PPP. Deloitte's report found that it did not pass crucial value tests and that there were flaws in the structure of the deal. Transport for London has also said that safety cannot be guaranteed under the PPP, because it does not provide the Tube with unified management.

Separately, the Treasury rebutted a report that it was to change the emphasis of PPP projects from value for money to the argument that it brings in public sector expertise. Both the Treasury and the DTLR would not comment on whether there was a "plan B" should the Tube PPP not pass the tests set for it.