Virgin asked to run troubled West Coast Mainline for another year while Government attempts to clear-up failed rail franchise mess

The news came as it emerged that more than 30 senior civil servants in the Department for Transport had been axed in the run-up to the West Coast Main Line fiasco.

Virgin was today asked to run West Coast Mainline train services for another year while the Government attempts to sort out the mess left by its failed rail franchise process.

The news, announced to the stock exchange this morning, came as it emerged that more than 30 senior civil servants in the Department for Transport, including some with direct responsibility for franchising, had been axed in the run-up to the West Coast Main Line fiasco.

Documents show that dozens of directors in the department were “eliminated” as part of an aggressive cost-cutting programme, while another 400 more junior posts were closed.

Insiders believe that the speed and scale of the staff reductions – alongside cuts in financial consultancy spending and the introduction of a new, “fiendishly complicated” 13-year franchise agreement – led to the mistakes, which are set to cost the taxpayer more than £100m.

All three areas are to form part of the department's two inquiries into what went wrong. Patrick McLoughlin, the Transport Secretary, will update Parliament this afternoon on the investigations into the fiasco.

But in a statement issued this morning he confirmed that Virgin had been given a temporary extension to run the line for between 9 and 13 months while the inquiries establish what went wrong and a competition is run for an interim franchise agreement.

Mr McLoughlin said: “My priority is to fix the problem and the first step is to take urgent action to ensure that on December 9 services continue to run to the same standard and passengers are not affected.

“I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen.”

The DfT has also paused the ongoing franchise programme including live competitions on Essex Thameside, Great Western and Thameslink and while two independent reviews into what went wrong with the West Coast competition and the wider DfT rail franchise programme.

The inquiries will focus their attention on what Mr McLoughlin has described as “a number of serious mistakes” that were made in the franchising process.

But they are also expected to examine the wider problems in the department, including staff and consultancy cuts. Among the posts abolished in the restructuring programme was the Director of Procurement – whose role was to oversee the franchise agreements. The directors of Rail Strategy and Rail Contracts, both of which would have had a role in the process, were also axed.

Two other senior posts which dealt with finance were lost in the cull, which saw many responsibilities merged and teams shrunk. Hundreds more junior staff lost their jobs.

Kate Mingay, the most senior civil servant suspended for her role in the franchise decision, had previously been head of Corporate Finance in the department but as a result of the restructuring was given additional responsibilities for rail contracts, procurement and commercial services. At the same time, Department for Transport board minutes from 2010 show that senior officials believed they could have some “quick wins” by cutting consultancy spending.

However, they admitted that other cuts in external support would have “some inevitable implications on prioritisation of expert support”.

In the case of the West Coast Main Line, this is thought to have included not hiring external financial consultants to do an external audit of the department's assumptions and calculations in awarding the franchise.

It is understood to be these problems in financial modelling that led to the scrapping of the decision to hand the franchise to FirstGroup ahead of Virgin Trains. One source, with extensive knowledge of the department, told The Independent: “We always thought the cuts would mean something had to give. We didn't know it would be this bad.”

Another said: “The job cuts at the Department for Transport were faster and more brutal than pretty much anywhere else. They have suggested that it was all been successfully achieved. But with what we know now, you would have to question that.”

The Independent understands that the staff cuts and restructuring will form part of the inquiry being carried out by the Centrica chief executive, Sam Laidlaw, and the former strategy chairman at PricewaterhouseCoopers, Ed Smith. Next month, the think tank Institute for Government is due to publish a report on the effect of the restructuring on Whitehall departments. It looks in detail at the Department for Transport, which made a decision to move faster than others in cutting staff.

Louise Ellman, who chairs the House of Commons Transport Select Committee, said her committee would want to investigate whether the department had a capability to deal with the franchise bids, which were said to be so large that the paperwork needed to be transported in vans.

“Cost-cutting is one of the areas of concern that we have,” she said. “We will be looking to see how much pressure this put on the people who had responsibility for the franchising process.”

Stephen Joseph, of the Campaign for Better Transport, added: “What we have heard is that the Government completely changed the nature of the franchise, cut the number of civil servants by one third and then would not allow them to employ external auditors. None of this has been passenger focused, it has all been about the bottom line.”

Labour MP Maria Eagle, the shadow Transport Secretary, said: “It's increasingly evident that ministerial incompetence caused this rail franchise fiasco. It will add insult to injury if £40m and rising of taxpayers' money has gone down the drain because of short-sighted short cuts made by ministers, designed to save money but ending up costing vastly more. This is yet another reason why we need a genuinely independent inquiry.”

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
Mock the tweet: Ukip leader Nigel Farage and comedian Frankie Boyle
peopleIt was a polite exchange of words, as you can imagine
Life and Style
fashion
Life and Style
Britons buy more than 30 million handsets each year, keeping them for an average of 18 months
tech
Arts and Entertainment
TV Presenters Ant McPartlin and Dec Donnelly. Winners of the 'Entertainment Programme' award for 'Ant and Dec's Saturday Night Takeaway'
musicAnt and Dec confirmed as hosts of next year's Brit Awards
Arts and Entertainment
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SEN Teaching Assistant needed for long term assignment

£45 - £55 per day: Randstad Education Preston: We are looking for an experienc...

Primary Teachers Required in King's Lynn

Negotiable: Randstad Education Cambridge: Primary Teachers needed in King's Ly...

Primary Teachers needed in Ely

Negotiable: Randstad Education Cambridge: Primary Teacher needed in the Ely ar...

Teaching Assistant to work with Autistic students

£60 - £65 per day: Randstad Education Leicester: Randstad Education Leicester ...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain