This could be the civil service's expenses-gate. Its Lehman moment. Its hacking crisis.

By Tim Montgomerie
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This morning's Times is estimating (£) that the rail franchise fiasco may end up costing £300 million. As Pete reported yesterday errors by civil servants forced the new Transport Secretary into a "calamitous" climb down. It seems that auditors from PriceWaterhouseCoopers were called in by Justine Greening one week before the reshuffle. Those auditors discovered that officials hadn't properly accounted for inflation in their decision to award the West Coast Mainline to FirstGroup rather than Sir Richard Branson's Virgin Trains. It sounds like an error as basic as it was enormous. Even Sue Cameron - the civil service's representative on Fleet Street - concedes this morning that mandarins have committed a massive blunder but her solution is to call for a declaration of peace between ministers and civil servants. Her sources in Whitehall clearly fear that reformers like Francis Maude will see this an opportunity for fundamental reorganisation of Whitehall.

The Government should certainly see this episode as a short-term embarrassment for transport ministers but, much more importantly, a great opportunity to get a much better Whitehall machine. Episode after episode is shouting the same message. We have a civil service not fit for purpose. It can't run IT projects. It can't keep costs under control. Whether it's Treasury officials versus IDS or the education blob against Michael Gove large parts of the civil service actively work with outside vested interest groups against ministers and declared policy. When civil servants mess up they don't get fired they get moved.

Ministers like Francis Maude are very aware of all of this and are agitating for deep reform. They want ministers to have more powers to appraise and sack civil servants. They want the civil service appointments merry-go-round to end and officials to be in place for long enough to see projects through and therefore be held accountable for whether those projects succeed or fail. They want more alternative voices and sources of wisdom and expertise inside departments. They know that good policy is 10% inspiration and 90% perspiration. Without a proper capacity to properly implement policy then there's little point even coming up with good ideas.

Number 10 is unfortunately in the hands of Jeremy Heywood and officials. Political direction of the government is weak, partly because of the nature of coalition government but also, more worryingly, because David Cameron seems comfortable with Sir Humphry running the show. Never let a good crisis go to waste and, make no mistake, this moment is a crisis for the civil service. Will the Prime Minister seize the moment and order a far-reaching review into the size and organisation of Whitehall...? No, I don't think he will either.