The Government's calamitous climb-down over the West Coast Main Line deal

By Peter Hoskin
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The word “shambles”, particularly with the prefix “omni-” in front of it, has been overused recently. But it’s the word that most readily applies to today’s news that the government is to scrap the deal awarding the West Coast Main Line franchise to Firstgroup. And the reason why? In the words of Patrick McLoughlin, “completely unacceptable mistakes made by my department in the way it managed the process”. Apparently, as the Department for Transport press release puts it, “These flaws stem from the way the level of risk in the bids was evaluated.”

The fiscal cost to the DfT is, as these things go, quite small: £40 million will have to be reimbursed to the various parties in the deal. But the embarrassment is huge. It was only a few weeks ago that the then Transport Secretary, Justine Greening, was deflecting Richard Branson’s concerns with the words, “I suspect that, had [Virgin] won the bid, they would have been perfectly happy with the process.” Yet now the Virgin Boss has been broadly vindicated. Thanks to errors committed along Whitehall, Virgin is now back in with a shot at the contract. FirstGroup’s shares have plummeted in price.

What makes this story even more piquant is the fact that ministerial-departmental relations are currently up for debate. Where does responsibility lie? Who should be checking what? How can officials be made accountable for their failures? We do not have all the details in this case, but we have been told that DfT staff will be suspended while an investigation takes place. The department’s permanent secretary even contributed a quote to the official press release. “I am determined to identify exactly what went wrong and why,” he says, “and to put these things right so that we never find ourselves in this position again.”

As well as an investigation into the departmental screw-ups, there will also be a review into the wider rail franchise programme. And so, much is cast into doubt again — not what the Government will have wanted after an uncertain few months. And that goes doubly so for those Tory ministers who will soon be catching the train to Birmingham.