'Accumulated errors' led to West Coast franchise fiasco

Civil servants faced scathing criticism yesterday for committing an "accumulation of significant errors" that led to the collapse of the West Coast rail franchise bid process.

The damning judgement came in an independent inquiry into the mistakes which followed the decision by the Transport Secretary, Patrick McLoughlin, to halt the "flawed" bidding process. Mr McLoughlin blamed officials for the bungles, and three civil servants have been suspended.

In August the Department for Transport (DfT) announced that FirstGroup, rather than Sir Richard Branson's Virgin Trains, had won the battle to operate the lucrative franchise for the next 13 years. Sir Richard, whose company had run West Coast since 1997, described the bidding process as "insane" and launched a legal challenge.

Sam Laidlaw, the senior business figure leading the first of two inquiries into the fiasco, published his preliminary findings yesterday.

He said: "In seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process.

"These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure and a weak governance and quality assurance framework."

Mr Laidlaw also observed that the department had suffered from cuts at a time when its workload was expanding, accompanied by "frequent changes of leadership".

Mr McLoughlin told MPs the report made "uncomfortable reading" but insisted it justified his decision to halt the process.

He said the department was making good progress in discussions with Virgin on how the company would operate the line "while a competition is run for an interim agreement".

Errors listed by Mr Laidlaw included a lack of transparency in the bidding process, inconsistencies in the treatment of bidders, and mistakes in calculating provisions for the risk of default.