The West Coast Main Line debacle - where does the buck stop?
by Alex Wild
British taxpayers have sadly become accustomed to politicians and bureaucrats squandering their cash. But the announcement from the Department for Transport that citizens must foot a bill of at least £40m for seemingly nothing more than incompetence is particularly frustrating. One may be able excuse the DfT for a few minor muddles, given that it has had three permanent secretaries and three secretaries of state since 2010, but the revelation that the West Coast Main Line contract awarded to FirstGroup is to be cancelled and re-tendered is unforgivable.
It would be unfair to lay much of the blame at the doorstep of Patrick McLoughlin, who only took over as Transport Secretary a few weeks ago and will not have had time to get to grips with the allegedly profligate civil servants now under his purview. However, he should probably have better acquainted himself with the facts when assuring the Transport Select Committee that "due diligence" had been carried out.
The former Transport Secretary Justine Greening - who recently moved to take charge at the Department for International Development – has a few more questions to answer though. The chartered accountant, now in charge of one of Whitehall's only increasing budgets, had defended the process as "robust" and had overseen the majority of the process.
Current and former permanent secretaries, Philip Rutnam and Lin Homer respectively, will also face tough questions over their role in this calamity. Homer, who was the permanent secretary at the start of the tender process, is no stranger to controversy and vast sums of public money. During her lengthy career in the public sector, Homer has landed numerous jobs with a six-figure salary - including stints heading up the United Kingdom Border Agency and Birmingham City Council. It is fair to say that in neither of these roles did she enjoy a perfect record.
At face value, Richard Branson's High Court challenge against the government's decision to award the franchise to FirstGroup may have seemed like the reaction of a bad loser – who might have been seen as being hungry for publicity. But even the most cursory glance at the figures reveals that he had very good reason to question the viability of FirstGroup's offer. It banked on growing revenues at a rate unprecedented on British railways and involved huge risk.
McLoughlin has rightly called for a series of inquiries into the fiasco and suspended some of the officials involved. There must be no whitewash and those responsible must be removed from their positions, and kept well away from the public purse. It is all too rare that taxpayer-funded officials whose actions are found to have lost or wasted huge amounts of public money are held to account, and forced to pay the price for their errors with their jobs.
If £40m can be wasted on a simple tender process, one has to wonder how much the DfT could possibly waste as ministers set about spending £32bn on one of the UK's biggest ever white elephants: High Speed Two. Our research has shown that this eye-wateringly expensive vanity project is based on a flawed business case and given today's findings, it could perhaps be even worse.
Regrettably, though, the eventual cost for this latest disaster is likely to exceed £40m. The government will probably face legal action from FirstGroup after the company's share price plummeted. Even more worryingly, the government may have to offer subsidies as an incentive for existing operators to continue as the franchising process is under review. Short-term contracts are an unattractive proposition for rail companies, which need long-term assurances to cover their huge costs.
Alex Wild is a researcher at the TaxPayers' Alliance campaign group, in the United Kingdom
The European Commission proposes a series of reforms meant to create a continent-wide railway network 'that actually works' by opening the sector up to greater competition and stimulating innovation
What sort of tender process incurs the amounts of money indicated as possible recovery compensation? It is no wonder these so-called procurement experts lost the plot. So often procurement experts lose sight totally of the end users and their customers blinkered to their savings or gains equals bonus.
Then they just walk away leaving someone else to clear up the mess of their false economy. Sack them all. Prove to us all their is responsibility within the civil service as well as private industry.
derek - Kent
Was this a "perfect storm" in the DfT or an accident waiting to happen? First, the loss of rail corporate memory and wisdom due to retirements. Second, a dilution in rail responsibilities following major departmental restructuring. Third, a hugely complex franchise procurement process. Fourth, cuts in spend on technical, legal and financial consultancy support to evaluate the bids. Fifth, over-stretched staff struggling to meet tight deadlines. Sixth, extremely aggressive bidders.
Clive Sparrow - Pareto Management
First thing, why wasn't the flaw detected in the tendering stage by the operator? And only after almost awarding then Virgin complains. Didn't Virgin buy Northern Rock on the cheap at the expenses of taxpayers and yet we have to take the loss. There are many questions from me pointing at Virgin and yet none take noticed of it. It seems that Virgin wanted to take everything and anything on the cheap from taxpayers to fund Branson's paradise islands.
Alex Lee - Barnsley
Can anyone come up with a positive suggestion to ensure that the 'scandals' of money wasting by politicians, who are 'advised' by their departmental officials, are thoroughly and immediately and if found at fault, dismissed from their jobs - irrespective of their position. It is clear from your report that the likes of Homer are at least some tainting but move on at a high level never to be brought to task.
The request for an official enquiry always allows time for the perps to gather all the legal defences into place to defend. Why not treat the wrong doing as a police eqnquiry? Get them in, question them, hold them and charge them. Yes the UK is renowned for fair play but there is certainly a case that the people who are elected to serve should be easily deselected.
Have I heard that somewhere before? And that the thousands of so called advisers, who no doubt have no fear of repurcussion for wrong doing i.e. the banking fraternity who have assisted in bringing the country to its knees, also are scrutinised as in any 'normal company employment' as to their worthiness. Do such people ever attend a job appraisal with their managers as is done in the 'real' world?
There really is not a day that passes when I read/hear of practices that degrade the majority of hard working people. Is it any wonder that there continues to be the stigma of a two tier system and culture throughout political life: attain employment in that strata, even at the lowest council level and you are one step on the wonderful gravy train where you can work one day a year and claim thousands.
You can fiddle your expenses, no its called claiming within what was advised as the rules, promise all at times of election. Doing nothing thereafter. I would, as would many others, be prepared and welcome the opportunity to 'work' for nothing in an attempt to end this 'rotten' culture in the UK.
Marcel Ranford - Port Talbot, West Glamorgan, UK
Those responsible must be dismissed - not allowed to retire early on full pensions or shuffled off to other departments on equal or higher salaries.
Roger Baker - Felixstowe/Suffolk/private individual
This surely illustrates the decline of the civil service over the last 30 years, quite likely even longer. There has been evidence that the impartiality of the civil service can be challenged with several departments hostile to any change of direction.
Then there is the profound incompetence of the Ministry of Defence and especially the procurement incompetence. Several years ago, the Home Office was deemed not fit for purpose and it is common knowledge that staff in the Education Ministry are obstructive
Howard Lucas - Cranleigh, Surrey
This happened on Justine Greening's watch so she should not be in a Cabinet position. Within the Department for Transport, the buck stops with the permanent secretary. The three suspended officials must also go if incompetence or impropriety on their part is evident but with adequate management above them the problem would have been identified and addressed before so much money was wasted.
My suspicion is that the senior civil servants involved will cover up as much as they can and sacrifice a few low ranking individuals who can be sent packing with their gold plated index linked tax payer funded pensions. Thank goodness Richard Branson had the guts to actually confront the DfT and expose the scale of the incompetence within.
Philip - Ipswich
The officials responsible for this debacle must be sacked. Such action will act as a warning to others.
CCCannon - Marlborough
I agree with the comments of Roger Baker. Additionally, however, the minister with the responsibility at the time Justine Greening should also be dismissed and not allowed to move on to another department.
Gordon Cooling - Boston Spa,Wetherby
Those responsible must be sacked - not allowed to retire early on full pensions or shuffled off to other departments on equal or higher salaries. Including the minister responible at the time, Justine Greening. It is time we saw some action that would apply in the private sector as soon as the truth is known.
john bourne - witham
I think this Greening girl needs her backside kicked back into the private sector; I don't think we the taxpayer can afford this kind of mistake.
K Evans - London
