Railways fiasco
‘proves need for
regional control’

Shadow Transport Secretary Maria Eagle said proposals to hand councils across the North of England power over rail contracts for services on the Northern and TransPennine routes should be supported.

Leeds City Council is leading a consortium of northern councils which are looking to take the power to let the two key contracts from the Department for Transport (DfT), before they are due for renewal next year.

“I think this incontrovertibly shows that there are problems with how this is run (by the DfT), and therefore alternatives need to be looked at,” Ms Eagle said.

“We’re very supportive of devolution as an agenda for local rail and other local transport services.”

Three civil servants were suspended yesterday after the Government was forced into a costly and embarrassing U-turn over the West Coast affair.

Laying the blame for the fiasco “wholly and squarely” on his own officials, new Transport Secretary Patrick McLoughlin said he was cancelling the competition for the London to Scotland line.

In August – with Justine Greening in charge at the DfT – the department had announced that the new franchise for the West Coast had been awarded not to Sir Richard Branson’s train company Virgin Rail, which had operated the line since 1997, but to the rival transport company First Group.

Describing the franchise process as “flawed” and “insane”, Sir Richard launched a legal challenge.

Mr McLoughlin pulled the plug on the process in the early hours of yesterday morning, saying “unacceptable mistakes” had been made by the DfT in the way it managed bids.

He said the mistakes had been uncovered as the DfT prepared for Virgin’s legal challenge, and that taxpayers will now face a £40m bill as the DfT pays back the money which the four bidding rail companies spent on their franchise bids.

The civil servants who have been suspended were among those who had been involved in the West Coast franchise competition, the DfT said.

Mr McLoughlin ordered two independent inquiries into what went wrong with the West Coast process, and put on “pause” the bidding process for three other rail franchises in the South of England.

Passengers are being assured that services will continue as normal on the West Coast line, with Virgin possibly being asked to carry on for the time being or the DfT operating the line itself, in the same way as it is already supervising East Coast services.

Labour leader Ed Miliband dubbed the West Coast process “a fiasco and another Government screw-up” while representatives from the rail union TSSA spoke of passengers paying “sky-high prices for this long-running farce”.

Mr McLoughlin said: “The original model didn’t take into account inflation and also some elements of the passenger number increases over a number of years.

“I want to make it absolutely clear that neither FirstGroup nor Virgin did anything wrong. The fault of this lies wholly and squarely with the DfT. Both of those two companies acted properly on the advice that they were getting from the department.”

Sir Richard, who had questioned FirstGroup’s ability to live up to its franchise promises for the whole length of the proposed contract, welcomed Mr McLoughlin’s decision and said he was hopeful that Virgin would carry on running the franchise.

FirstGroup said it was “extremely disappointed” at the announcement that its successful attempt in gaining the West Coast contract had now been overturned, adding that it had submitted “a strong bid, in good faith and in strict accordance with the DfT’s terms”.

But Mr Miliband added: “When you look at the latest fiasco with the West Coast line – another Government screw-up, another Government mistake, another case of them blaming someone else, apparently they are saying it is the fault of their civil servants – I think competence is an issue.”

The general secretary of the RMT transport union, Bob Crow, said: “The whole sorry and expensive shambles of rail privatisation has been dragged into the spotlight this morning and, instead of re-running this expensive circus, the West Coast route should be renationalised on a permanent basis.” The Campaign for Better Transport said the West Coast announcement “highlighted the weaknesses in the franchise process”.