Civil servants 'bungled West Coast rail deal', MPs told

Virgin Trains owner Sir Richard Branson dubbed the West Coast franchise bidding process 'insane' (EPA)

Civil servants committed an "accumulation of significant errors" that led to the collapse of the handover of the West Coast rail franchise, an independent inquiry has found.

The damning conclusion follows the decision by the Transport Secretary, Patrick McLoughlin, to halt the "flawed" 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 against the decision.

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

Errors included a lack of transparency in the bidding process, inconsistencies in the treatment of bidders and mistakes in calculating the amount of risk bidders were asked to provide against defaulting on the franchise.

Richard Branson's Virgin Trains had run the West Coast Main Line since 1997