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Wednesday, 23 April 2014

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'Significant errors' in West Coast rail franchise process

An accumulation of “significant errors” by the Department for Transport (DfT) resulted in a “flawed” West Coast rail franchise process, MPs were told last night.

23-month contract: Sir Richard Branson

The judgement came in initial findings from an independent inquiry into the halting of the West Coast bidding process.

The report was published yesterday by Transport Secretary Patrick McLoughlin, who made the decision earlier this month to scrap the West Coast bidding process, blaming mistakes by DfT officials.

In August, the DfT announced that transport giant FirstGroup, rather than Sir Richard Branson’s rail company Virgin Trains, had won the battle to operate a new 13-year West Coast franchise.

Sir Richard, whose company had run West Coast since 1997, dubbed the bidding process “insane” and launched a legal challenge to the decision.

Yesterday senior business figure Sam Laidlaw, who is leading the first of the inquiries, asked the DfT to release the following statement: “In the limited time available this is necessarily only a preliminary report.

“What is clear, however, is that 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.

“The full causes and the lessons to be learnt will be addressed in the final report of my independent inquiry to be published at the end of November.”

Former transport secretary Justine Greening, who presided over the original FirstGroup decision, and her successor, Mr McLoughlin, have both defended the bidding process.

But it was while preparing to defend the Branson court challenge that mistakes in managing the West Coast bidding process were found.

Mr McLoughlin scrapped the bidding and suspended bidding on other franchises. In addition, three DfT civil servants were suspended.

Mr McLoughlin also announced that two independent inquiries would be carried out – the first to look specifically at the West Coast bidding process and the other to investigate franchise bidding generally.

In a statement to MPs last night Mr McLoughlin said Mr Laidlaw’s initial findings made “uncomfortable reading” but provided “a necessary and welcome further step in sorting this (the West Coast franchise) out”.

Mr McLoughlin went on: “It is clear that the inquiry has identified a number of issues which confirm that my decision to cancel the franchise competition was necessary.”

Mr McLoughlin said the Laidlaw inquiry also mentioned factors “that appear to have caused or contributed to the issues raised”.

He continued: “We will look at these with interest.”

Virgin has been asked to carry on for the time being.

A FirstGroup spokesman said: “We note the release of preliminary findings into the cancellation of the West Coast franchise competition and the significant technical flaws which the DfT say they discovered in their process.

“The Secretary of State has repeatedly confirmed that FirstGroup is in no way at fault.”


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