West Coast franchise debacle will cost more than £50m

AN IMPORTANT Parliamentary committee has slammed the handling of the West Coast Main Line franchise issue by the Department for Transport as displaying a “complete lack of common sense”.

The Public Accounts Committee warned that the cost to taxpayers could be considerably more than the £50m that has been estimated.

The committee accused the department of making “fundamental errors”.
In a damning indictment of the Government’s handling of the affair, Labour MP Margaret Hodge, who chairs the committee, said: “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.

“The franchising process was littered with basic errors. The department yet again failed to learn from previous disasters, like the  Metronet contract. It failed to heed advice from its lawyers. It failed to respond appropriately to early warning signs that things were going wrong.

“Senior management did not have proper oversight of the project. Cuts in staffing and in consultancy budgets contributed to a lack of key skills.

“The project suffered from a lack of leadership. There was no single person responsible from beginning to end and, therefore, no one who had to live with the consequences of bad policy decisions.”

In October, the government scrapped its decision to award the £5bn franchise to FirstGroup instead of the incumbent Virgin Trains, after Virgin launched a legal challenge against the original decision and serious mistakes with the procurement process came to light.

Virgin will continue running the service until November 2014, when a new long-term franchise will begin.