West Coast rail fiasco 'will cost taxpayers £50m'

MPs concerned that basic mistakes could be repeated in HS2 and Thameslink projects

Civil servant failures over the West Coast rail contract will cost taxpayers “at least £50 million”, a report by MPs said today.

There was a lack of leadership at the Department for Transport (DfT) and a failure to "get basic processes right" over the West Coast fiasco, the report from the House of Commons Public Accounts Committee said.

MPs said they were concerned that these basic mistakes could be repeated in future projects such as the London to Birmingham high-speed HS2 scheme and the London Thameslink project.

The report said the department failed to learn from mistakes made in previous projects and senior managers failed to apply common sense during the West Coast bidding process.

They also said senior managers had "missed clear warning signs, including from the (rail) industry, that there were serious problems with the (bidding) competition".

The committee said: "We are astonished that there was no senior civil servant in the team despite the critical importance of this multibillion-pound franchise".

The MPs added that they were also "astonished that the (DfT) Permanent Secretary (Philip Rutnam) did not have a detailed understanding and oversight of the (franchise) competition".

After DfT errors in the process had been identified, Transport Secretary Patrick McLoughlin scrapped the bidding which had seen Virgin Trains lose out to rival transport company FirstGroup in the battle for a new, 13-year West Coast franchise.

Instead, Virgin is carrying on running the West Coast service until November 2014, with a new bidding process starting after that.

In today's report, the committee said it was concerned that the department "could yet again fail to apply basic processes, which could affect its future projects, including HS2 and Thameslink".

The MPs said the DfT made a number of mistakes when identifying the amount of risk capital it required from bidders to balance the riskiness of their bid.

The report said the department's "blinkered and rushed approach meant the competition was not run properly" and that it had been a mistake "not to have a single person responsible for the project from beginning to end".

Launching the report today, the committee's chairman Margaret Hodge (Lab: Barking) said: "The DfT's complete lack of common sense in the way it ran the West Coast franchise competition has landed the taxpayer with a bill of £50 million at the very least.

"If you factor in the cost of delays to investment on the line, and the potential knock-on effect on other franchise competitions, then the final cost to the taxpayer will be very much larger."

She went on: "The franchising process was littered with basic errors. Senior management did not have proper oversight of the project. Cuts in staffing and in consultancy budgets contributed to a lack of key skills.

"We are astonished that the Permanent Secretary did not oversee the project because he was told he could not see all the information which might have enabled him to challenge the processes, although it was one of the most important tasks for which the department is responsible.

"Given that the department got it so wrong over this competition, we must feel concern over how properly it will handle future projects, including HS2 and Thameslink."

Bob Crow, leader of the RMT transport union, said: "The stench from the fall-out of the West Coast franchise continues to hang over Britain's transport industry as it becomes clearer with every examination that the ministers responsible for this shambles could not be trusted to run a whelk stall let alone multi-billion Government contracts.

"No wonder the Thameslink/Siemens fleet contract remains unsigned nearly two years on with these jokers at the helm, and the case for that work to go to Derby and not Germany remains rock solid.

"Underpinning all this is the fact that privatisation is a corrosive and expensive political project doomed to repeated and costly failure, twice on the East Coast and now on the West.

"Fiddling with processes won't work. It's the whole, rotten policy that needs dumping with a return to public ownership."

Today's report follows a Whitehall-commissioned independent inquiry into the West Coast bidding led by Centrica boss Sam Laidlaw. The inquiry report was extremely critical of the DfT.

Responding to the Public Accounts Committee report today, a DfT spokesman said: "The independent Laidlaw inquiry published in December identified the unique and exceptional circumstances which led to failures in the West Coast franchising programme and crucially what steps the department should take to prevent this from happening again.

"The department has accepted all the recommendations and has taken immediate steps by bringing together all rail activity under a single director general and recruiting a senior director to lead the franchising programme, as well as improving internal governance and strengthening oversight and accountability.

"Not only will these reinforce the franchising process but will also protect rail infrastructure projects such as HS2 and the biggest programme of rail electrification."

The decision to award the franchise, initially, to FirstGroup, was made when Justine Greening was Transport Secretary and Theresa Villiers was Rail Minister.

Ms Greening became International Development Secretary in last autumn's Government reshuffle, while Mrs Villiers was appointed Northern Ireland Secretary.

Shadow transport secretary Maria Eagle said today: "It's time that David Cameron took responsibility for the rail franchising fiasco, instead of allowing ministers to hide behind their civil servants.

"The Government must accept the committee's finding that it was the short-sighted decision by ministers to axe external audits of multi-billion pound contracts that ended up with at least £50 million of taxpayers' money going down the drain.

"It is a disgrace that every politician responsible for the bungled franchise deal has either remained in the Cabinet or been promoted to it."

Richard Hebditch, campaigns director of Campaign for Better Transport, said: "The mistakes with the West Coast are clear for everyone to see. But the biggest problem is a franchise system where the only deciding factor is who promises the biggest payment back to government. What the Public Accounts Committee report shows is that we can't even rely on the figures for that decision.

"Franchising needs to be completely reformed so that what counts are improvements to the service on offer, rather than complex calculations of profit and loss that don't stack up."

PA

News
A Brazilian wandering spider
news

World's most lethal spider found under a bunch of bananas

News
people
Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
Voices
Sol Campbell near his home in Chelsea
voices
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
Sport
Fans of Palmeiras looks dejected during the match between Palmeiras and Santos
footballPalmeiras fan killed trying to 'ambush' bus full of opposition supporters
Arts and Entertainment
filmsIt's nearly a wrap on Star Wars: Episode 7, producer reveals
Life and Style
fashion
News
i100
News
<p>Jonathan Ross</p>
<p>Jonathan Ross (or Wossy, as he’s affectionately known) has been on television and radio for an extraordinarily long time, working on a seat in the pantheon of British presenters. Hosting Friday Night with Jonathan Ross for nine years, Ross has been in everything from the video game Fable to Phineas and Ferb. So it’s probably not so surprising that Ross studied at Southampton College of Art (since rebranded Southampton Solent), a university known nowadays for its media production courses.</p>
<p>However, after leaving Solent, Ross studied History at the School of Slavonic and East European Studies, now part of the UCL, a move that was somewhat out of keeping with the rest of his career. Ross was made a fellow of the school in 2006 in recognition of his services to broadcasting.</p>
TV

Rumours that the star wants to move on to pastures new

News
i100
Arts and Entertainment
The cast of Downton Abbey indulge in some racing at a Point to Point
tvNew pictures promise a day at the races and a loved-up Lady Rose
News
people

Comedian says he 'never laughed as hard as I have writing with Rik'

Arts and Entertainment
Tim Wonnacott dancing the pasadoble
TVStrictly Come Dancing The Result
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

Lead Teacher of Thinking School Drive Team and Year 3 Form teacher

Competitive: Notting Hill Prep School: Spring Term 2015 Innovative, ambitious ...

Reception Teacher

£90 - £120 per day: Randstad Education Hull: Randstad Education is the UK mark...

Trainee Recruitment Consultant

£20000 - £25000 per annum + Uncapped Commission: SThree: Trainee Recruitment C...

DT Teacher - Textiles

£100 - £110 per day: Randstad Education Group: Design and Technology Teacher ...

Day In a Page

Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past