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Friday, 19 December 2014

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West Coast railway franchise fiasco inquiry finds "serious problems"

AN inquiry into the West Coast railway franchise fiasco has found "serious problems" and "unacceptable flaws", Transport Secretary Patrick McLoughlin admitted today.

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Businessman Sam Laidlaw was asked to investigate the bidding process which saw FirstGroup chosen to run trains on the line, before the deal was scrapped ahead of a High Court case launched by Sir Richard Branson's Virgin Rail, which lost the contract.

Mr McLoughlin today told the Commons: "I do not hide from the seriousness of his (Mr Laidlaw's) findings; they make extremely uncomfortable reading for the department.

"They caused serious problems for the bidding firms, including FirstGroup, who were in no way at fault.

"They must and will be acted upon."

Labour said the report was "damning".

Mr McLoughlin announced earlier today that Virgin would operate services on the London to Scotland route for another 23 months, until November 9 2014, after which the West Coast line will be let under a long-term franchise.

The Transport Secretary said Mr Laidlaw's investigation found Department for Transport (DfT) officials "wrongly calculated the amount of risk capital bidders would have to offer to guarantee their franchise proposals".

Mr McLoughlin added: "These incorrect figures varied in ways which were wrong.

"Significantly, he also states for the first time that ministers made the original provisional award without being told about the flaws and after being given inaccurate reports."

Three civil servants were suspended after the deal collapsed and Mr McLoughlin said "any specific personnel issues" were for the department's permanent secretary.

"This is an extremely serious issue for my department and the Civil Service, but I am determined we learn the lessons and get on with the job we are here to do," said the Conservative minister.

The botched franchise agreement will cost taxpayers at least £40 million, Mr McLoughlin said previously.

Shadow transport secretary Maria Eagle told MPs the final report was "damning" and attacked ministers for blaming officials.

She said: "For all the effort by the Government to pin the blame on just three civil servants in briefing after briefing, and to hide behind an internal (HR) human resources process - the results of which will never be made public - some things are very clear; it was decisions and failures by ministers that led to the collapse of rail franchising at huge cost to the taxpayer."

The DfT later confirmed the suspensions had been lifted.

Ms Eagle accused the Government of a "bizarre restructuring" of the department which left no-one in charge of rail.

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