DMO finds evidence of maladministration over Edinburgh tram project

Kevin McKee said he was able to make a public report now that litigation with law firm DLA Piper Scotland has been settled on a confidential basis.

Edinburgh’s claim against the firm had been widely reported as for £222m. Mr McKee’s report said the litigation was resolved out of court in March 2026.

He said: “Aspects of the role of the council in the Edinburgh Tram project amounts to maladministration”.

After reviewing Lord Hardie’s inquiry report into the project he agreed with its conclusion “that the council failed in a number of important respects to properly oversee the project".

“This contributed to the project being delivered late, at an increased cost and with a restricted scope.”

Mr McKee said: “There were serious and systemic failings on the part of the council which, overall, could be described as organisational incompetence… in particular in relation to the lack of proper oversight of Tram Initiatives Edinburgh (TIE).”

He concluded maladministration occurred ”due to the incompetence and inattention attributed to the council in the Edinburgh Tram Inquiry Report and the serious adverse consequences that followed as a result.”

The council’s 2023 response to the inquiry report said the original budget for the line from the Airport to Newhaven was £545m, but was revised upwards to £776m and extended so reaching £852.6m. Costs later exceeded £1bn.

It noted Lord Hardie’s finding that independent legal advice was not sought and Edinburgh “instead relied on a duty of care extended to the council by DLA Piper Scotland LLP who acted for TIE Ltd.

“Although concerns were raised about this approach by officers, independent advice was not instructed by the council in advance of signature of the Infraco contract, and in any event until autumn 2010.”

Lord Hardie found the decision not to obtain independent legal advice “left the council unprotected and had far reaching consequences for the project”.