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West Coast fiasco: Emails probed, civil servant banned

Virgin train on West Coast Main LineOfficial investigators have demanded an electronic audit of emails between the Department for Transport (DfT) staff in an attempt to reveal evidence of an ‘Anyone But Branson’ campaign during the West Coast Main Line franchise fiasco. This comes as MPs have heard that the most senior civil servant at the department was barred from reviewing the competition until only weeks before the contract was initially awarded to FirstGroup.

This follows allegations in the media that there was a culture against Virgin in the department, which was reflected in ‘derogatory’ emails. Insiders say that the culture was rooted in the success of Virgin and tough renegotiation of the franchise in 2006, which left officials in Whitehall feeling beat and cornered after the company’s team outwitted them.

On top of this, DfT officials are also being accused of loosening up the figures around the amount of risk capital needed from bidders so that one company was favoured over another. Key data was changed to make sure FirstGroup stayed in the bidding process, with its subordinated loan facility being reduced. After the deal was handed to FirstGroup and subsequently cancelled, ministers spent £1 million on developing plans for the government to take over the line’s operations. This was before they asked Sir Richard Branson to continue the operations for up to one year.

Giving evidence to the Transport Select Committee, Transport Secretary Patrick McLoughlin said that two independent probes into the fiasco have asked for ministers to instigate an ’email capture’ system to electronically scan for and identify any potentially biased references to Virgin Trains and Sir Richard Branson during the bidding process. He admitted that the DfT made regrettable mistakes in how it handled the bidding process for the West Coast Main Line franchise, the busiest route in Britain. He explained why the department went ahead with the process despite knowing that the process was flawed. Basic errors led to a disastrous failure, he noted. They have apologised to the bidders and taxpayers, who are right to expect better.

Transport Select Committee chair Louise Ellman says it’s astonishing that the government was forced to cancel the franchise and delay others. The Secretary of State said in September that he was content with how the West Coast Main Line competition was handled by the DfT and that the legal challenge launched by Virgin Trains would be strongly defended.

Meanwhile, it’s been revealed that the most senior civil servant in the DfT was kept away from reviewing the West Coast Main Line competition until only weeks before the department awarded the contract to FirstGroup. Permanent secretary Philip Rutnam admits that he didn’t have access to the important details and figures until late July. He also admitted to MPs that it was shocking that he didn’t know about the crucial information – like how much the train operators were bidding and what risk capital they would be putting up to insure against failure.

Rutnam insists, however, that he was following protocol. He told MPs that, under the confidentiality agreements in place for major procurements, commercially confidential information doesn’t come to him or other senior officials until the end of the process.

The DfT is under pressure to reveal who made the decision to go ahead with the franchise bidding process in March. The decision was made despite officials knowing they didn’t have the right models to evaluate the bids, as well as that the situation was vulnerable to legal proceedings.

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