First-class fiasco
Officials blamed for failures and dubious figures that cost Virgin the £7billion West Coast contract
THE blunders that turned the West Coast rail franchise deal into ‘a firstclass fiasco’ were laid bare yesterday.
The first official reports into the auction found civil servants got their sums wrong when stripping Virgin Trains of the £7billion route.
Ministers have been forced to start the tender process again – costing taxpayers tens of millions of pounds.
An 84page dossier by businessman Sam Laidlaw accused the Department for Transport of flawed and inadequate planning and producing inaccurate reports.
However no individual officials or ministers were singled out for blame – a decision that led to claims of a whitewash.
A second report from the Audit Commission flagged up high staff turnover at top levels at the transport ministry as well as job losses at lower levels.
Yesterday the Government announced Sir Richard Branson’s Virgin company will continue to operate services on the London to Scotland route for another 23 months. The flawed tender process had given the contract to FirstGroup.
Mr Laidlaw, chief executive of energy company Centrica, said there had been ‘a lack of transparency, inadequate planning and preparation, as well as a complex and confusing organisational structure with weak quality assurance and insufficient governance oversight’.
He concluded: ‘ The responsibility of this flawed process rests with the DfT rather than with any of its external advisers.’
Labour said ministers – including Justine Greening, who was Transport Secretary at the time but is now International Development Secretary – should take responsibility for their ‘shambolic and incompetent’ actions.
Tory MPs demanded to know why the ‘Sir Humphreys’ at the heart of the scandal were still in post. Three middleranking civil servants suspended in connection with the botched deal have
‘A political scapegoat’
been reinstated. They include commercial and technical director Kate Mingay, who took her case to the High Court claiming she was a political scapegoat.
Ministers say the blunder will cost taxpayers at least £40million. Rail unions put the figure at more than £100million.
The Laidlow report shows that outside lawyers raised concerns seven weeks before FirstGroup won the contract on August 14.
It highlighted a ‘lack of clarity’, failure to warn superiors of mounting problems and a culture of ‘limited ownership’, ‘ineffective oversight’ and risks being ignored because of an overriding pressure to complete the procurement deal on time.
Mr Laidlaw said he could find no evidence of an antiVirgin bias at the department but he admits his enquiries were hampered because he was not able to see all the emails he had asked for.
He said the ministry was ‘excessively stretched’ due to the spending review and the competing pressures of other projects.
The Audit Commission report said the department had had four permanent secretaries since 2010 and had been hit by staff reductions of up to 30 per cent.
Transport Secretary Patrick McLoughlin, who published the Laidlaw report yesterday, told the Commons: ‘I do not hide from the seriousness of his findings. They make extremely uncomfortable reading for the department.
‘They caused serious problems for the bidding firms, including FirstGroup, who were in no way at fault.’
He said the Prime Minister had asked questions during the bidding process but there had been a ‘damning failure’ to provide accurate answers.
Margaret Hodge, the Labour MP who chairs the Commons public accounts committee, said: ‘The DfT’s handling of the West Coast franchise was a firstclass fiasco. It has left the Government’s entire policy on rail franchising in disarray.’
Manuel Cortes, of the TSSA rail union, said: ‘This is a classic Whitehall whitewash. No one was seriously guilty of anything.’