21. The Department told us that Crossrail Limited had been set up at arm's-length from government to provide independence, protect it from political interference from the sponsors, and to enable it to deliver this complex and large programme to a fixed budget. It asserted that while this was an effective delivery structure for the first seven or eight years, this autonomy made it difficult for the sponsors to challenge and understand programme progress during the later stages of the programme, protecting Crossrail Limited from necessary and important challenge. Crossrail Limited told us that there were benefits from its status, which included enabling it to attract the best and brightest staff in a way that the civil service found difficult and also protecting it from money being stripped from the programme. However, the new Chairman of Crossrail Limited's Board described this as an example of "extreme autonomy" and recognised that with hindsight, more periodic deeps reviews and external scrutiny would have been beneficial. The Department asserted that other arm's-length bodies it sponsors, such as High Speed Two Limited and the Highways Agency, operate on a different basis and have different governance arrangements.32
22. Crossrail Limited has always been responsible for integrating the different elements of the new railway being delivered by contractors, Network Rail and suppliers of the trains.33 The Department and Crossrail Limited recognised that there were insufficient people involved in the programme with the necessary skills and experience of integrating elements of a railway. The Department also acknowledged that Crossrail Limited's Board did not have sufficient strength or depth of expertise in systems integration that it needed to effectively challenge programme performance. It told us that sponsors had strengthened the Board in 2018 by appointing additional non-executives, including people with skills in systems integration. The Chairman of Crossrail Limited's Board told us that both the Board and executive team now had a different set of skills, with a "tremendous" amount of experience in complex railway systems brought into the programme.34 Both the Department and Crossrail Limited recognised that if they had acted earlier to enhance Crossrail Limited's capability, some of the issues on the programme could have been picked up sooner.35
23. The Department accepted that there should have been a fundamental revisit of the governance structure two or three years ago, and that this should have been built into the programme from the outset.36 However, we note that this is an area that was raised by the NAO and others in 2014. In its report on Crossrail, the NAO recommended that the Department put in place governance arrangements appropriate for the programme's transition from construction to operations, together with a transition plan.37 We questioned the Department on what changes were made following the NAO's recommendation. The Department told us that it had appointed a new Crossrail operations director who attended the sponsor board and that there were regular discussions and updates on bringing the railway into use. The Department told us that Crossrail Limited produced a transition strategy which was signed-off by Crossrail Limited's Board and the sponsors in 2015. It also told us that the Board began to meet monthly, instead of every two months, and operational teams started working together. It was not, however, able to provide any practical examples of what it had done differently in response to the recommendation, or what had changed on the ground. The Department acknowledged that it should have done more in response to the recommendation, and that the programme did not move quickly enough from construction to systems integration.38
24. The Department told us that it thought the Crossrail Limited Board should have done more to challenge the Crossrail executive team and ensure that it fully understood whether the information it was receiving accurately captured the programme's progress. It acknowledged that the sponsor board did not get "under the skin" of the information that was being reported by Crossrail Limited. Both the Chairman of Crossrail Limited's Board, and the Chief Executive, who were not in place at the time, accepted that information on progress of the programme being reported upwards was not sufficient and did not adequately assess the work to be done. The Department told us that it did not consider there to have been any attempt by Crossrail Limited to deceive the sponsors, and that information had been reported was in good faith, but the information did not give a full picture of some of the risks as they grew and became more complex.39
25. The Project Development Agreement sets out a number of actions sponsors could take, and sanctions they could apply if, for example, successful delivery of the programme was under threat or if forecast costs exceeded defined thresholds.40 The Department told us that these were rarely used and not very helpful, partly because the bar set for triggering them was high, and also because the sanctions available were "a bit nuclear". Nevertheless, sponsors could not tell us whether these actions and sanctions, or indeed the terms of the Project Development Agreement, still applied. The Department told us that another mechanism for escalating issues, that did not have such formality around it, could be developed to improve transparency. Crossrail Limited told us that it was "moving beyond contractual arrangements" and working more closely with sponsors, for example meeting with the sponsors 10 times in the previous five weeks.41
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32 Qq 31, 70, 113, 114, 127
33 Qq 11 -12
34 Qq 8, 15, 21, 141
35 Qq 19, 132, 135
36 Q 142
37 C&AG's Report, Crossrail, Session 2013-14, HC 965, 24 January 2014
38 Qq 31, 55-60
39 Qq 3, 4, 34, 36, 139
40 C&AG's Report, page 16
41 Qq 112, 113, 115-12 5