Prohibition on Misleading Reports from ALEOs
Edinburgh Tram Inquiry · Edinburgh Tram Inquiry Report · Issued 12 September 2023 · Addressed to: City of Edinburgh Council
Source — verbatim from the inquiry
●Inquiry recommendation
The directors, employees and consultants of the company responsible for the procurement and delivery of the project as project managers, including an arm's-length external organisation (ALEO) wholly owned by the local authority that is the promoter and owner of the project, should not submit to the local authority information that is deceptive or reports that are misleading either by the inclusion of false statements or by the omission of references to facts that might influence the strategic decisions of councillors if they were disclosed.
Edinburgh Tram Inquiry, Edinburgh Tram Inquiry Report · 12 Sep 2023 Source PDF →
Published evidence summary
Publicly available evidence relating to this recommendation:
- The Council committee report (16 November 2023) noted that scrutiny of arm's-length external organisations (ALEOs) had significantly improved since the original tram project, with reviews in 2012 and 2016 strengthening governance arrangements and the Council's relationship with its ALEOs (City of Edinburgh Council Committee Report, 16 November 2023).
- No published formal prohibition on ALEO directors or employees submitting public interest claims without the approval of senior officers of the parent local authority has been identified to March 2026.
Sources
Response — verbatim from government
●City of Edinburgh Council — initial response
Council Leader Cammy Day stated: 'We know that serious mistakes were made in the construction of the original tram line.' The Council broadly agrees with Lord Hardie's recommendations but notes improvements were already implemented for the successful Trams to Newhaven project. The Council has not published a formal detailed response to individual recommendations. Source: Council news release, 2 November 2023.
City of Edinburgh Council · 2 Nov 2023 Written response →
●City of Edinburgh Council — follow-up
The scrutiny of ALEOs by the Council and officers has significantly improved since the original tram project, with reports in 2012 and 2016 in particular looking at how ALEOs operate and their relationship with the Council. This has resulted in the formalisation of the Council's observer role, increased scrutiny by Council committees and regular reporting. The 2016 report established dual reporting of the Council's ALEOs to an executive committee and to the Governance, Risk and Best Value Committee to ensure that there was a level of consistency to monitoring and oversight of ALEOs across all Council committees. Internal Audit has recommended that an ALEO framework be established which will examine and review how scrutiny can be improved. This work is currently underway and will report in 2024. The ALEO framework will be examining all governance documentation between the Council and its ALEOs and will be recommending that the importance of candour is formalised in this documentation so that there is clarity and consistency in the Council's approach and an understanding of what action the Council can take. It is recommended that the Council adopt recommendations 20 and 21. Source: Chief Executive's report to Transport and Environment Committee, 16 November 2023. Note: City of Edinburgh Council statuses are drawn from the Chief Executive's report to the Transport and Environment Committee (16 November 2023), referred to the full Council on 14 December 2023. This report appears to have been formally adopted but independent confirmation has not been obtained.
City of Edinburgh Council · 16 Nov 2023 Written response →
Evidence trail — what's actually happened since
- 2 Nov 2023 Initial status based on Scottish Government and City of Edinburgh Council responses to the Edinburgh Tram Inquiry Report (September 2023). Source →
- 1 Sep 2025 · City of Edinburgh Council City of Edinburgh Council agreed new ALEO Governance Framework in March 2025 to improve scrutiny of Arm's Length External Organisations, directly responding to Inquiry findings about misleading information from ALEOs. View source → Reasonable Progress
Each entry above links to a primary source — gov.uk written statement, consultation response document, or inspection report. The Index does not characterise government intent; it tracks what has been published.
How this page is built
Source and Response are verbatim from primary documents. The Evidence trail records published activity since — written statements, consultation outcomes, inspection findings, parliamentary references. The Index does not paraphrase or characterise intent; it tracks what has been published. Where the evidence is the absence of action (a missed deadline, a slipped timetable), that absence is documented from primary sources rather than inferred.
This recommendation's data is verified periodically against primary sources. The Index is monitored for staleness weekly.