Thank you, Auric. Now you deserve a lie-down. You cheated, too, but mainly at cards.
This ConDem lot do it on a national scale
Whatever the West Coast Main Line mess is all about (and the story of low-level civil-servants cocking-up the sums looks more ragged by the hour ✱), it is intensely political.
As they say, it doesn’t add up:
- The heavy-lifting was done with Theresa Villiers as Minister of State and Philip Hammond as Secretary of State. He was plucked forth, the emergency replacement for Liam Fox (fallen on sword) at Defence. She was lately whipped away and sent to Northern Ireland.
- Justine Greening was slotted into Hammond’s warm seat in October 2011, and promptly shunted out again to Overseas Development at the start of this September.
- By all accounts the most Greening was told (and that late on) involved “minor irregularities”. The main lead in today’s Times [£] has this:
Three Department for Transport (DfT) officials were suspended after it emerged that they had failed to assess the impact of inflation and rising passenger numbers on expected returns when deciding to award the £9billion contract to FirstGroup. The fallout immediately engulfed other lines, including long-distance trains to the West Country and key commuter routes into London as Mr McLoughlin announced a pause in bids to run three franchises due to begin next year.
The Times understands that Mr McLoughlin’s predecessor, Justine Greening, learnt of a potential flaw in the West Coast bid a week before the Cabinet reshuffle on September 4.
Ms Greening called in auditors from PwC to vet figures compiled by DfT officials. Mr McLoughlin was informed on Monday evening that the official figures did not add up.
We also have a side-box accompanying that Times piece:
No 10 said that government ministers should not be expected to take the blame for the “highly technical” errors in the West Coast bidding process. Justine Greening, the former Transport Secretary, and Theresa Villiers, the minister in charge of railways who oversaw the decision, are safe in their new roles because they were assured by officials that the process was robust.
Err … right.
- So when Hammond was Secretary of State, he never laid eye or finger on the £9billion franchise? He must have been remarkably busy to have to pass a matter of such importance all down to the wee girl. Luckily, then, he doesn’t have to take responsibility.
- Yet when Greening got the hot-seat, suddenly it all went to the top?
- In all that time, nobody capable of reading a prospectus was around to suggest that FirstGroup were — how shall we say … — massaging the figures? Yet, when the franchise result was announced, every commentator was leery, and pounced on just that.
The Guardian, editorialising on the same story, is a whit clearer in alleging motives:
When the franchise was awarded to FirstGroup, industry critics tended to dismiss cries of foul from the existing franchisee, Virgin Trains, since Richard Branson advisers had reportedly, in an unguarded moment, described it as a licence to print money. But the claim that First’s revenue projections were based on a “preposterous” increase in journeys was more sympathetically heard. They were not due to happen for 10 years, and there were allegations that the company would game the system – an accusation it has faced in connection with its Great Western contract.
Now, isn’t that a golden — nay, Auric — phrase to treasure: game the system? The Guardian suggests that the gamesmanship and Goldfingering was happening elsewhere, even in the DfT:
… darker rumours of institutional antipathy for Virgin Trains have circulated the rail industry for years. Those gained further credence with Wednesday’s announcement. It stems from a renegotiation of the west coast franchise in 2006 – the consequence of a bungled upgrade of the route – that left the DfT feeling that it had been outwitted and outmanoeuvred, to the benefit of Branson and to the detriment of subsidy-paying taxpayers. Over the past 10 years, the Virgin rail operation has paid out £381.7m in dividends, split between Virgin Group, a 51% shareholder, and Stagecoach, which owns the remaining 49%. One industry source said the about-turn would reignite fears, voiced privately by Virgin, that it was always doomed to lose west coast.
Anyone smell rats?
Let’s stick with The Times, its main editorial, a moment longer:
Not one but two reviews are now under way to find out what went wrong and whether the bid process is fit for purpose. But certain aspects of the narrative are already clear. Over 15 months, the Department for Transport allowed basic errors in inflation and passenger growth projections to distort the auction for the West Coast franchise. It failed to factor inflation into the real value of the bidders’ revenue forecasts and to take proper account of the fact that most of First Group’s anticipated passenger growth was to take place towards the end of the 15-year franchise — too far into the future for any sober actuary.
First Group was awarded the franchise because it bid £700 million more than Virgin, even though its high debt burden raised serious concerns among analysts as well as rivals about whether the company could afford it. Virgin’s relatively conservative bid failed despite its strong record in customer service and investment. When Sir Richard Branson demanded a judicial review the Government at first expressed confidence in its decision. When the time came for Mr McLaughlin to state his case in court, he executed the most dramatic U-turn of this Parliament instead.
Hold on: Malcolm is confused. Greening summoned auditors from PwC to vet figures compiled by DfT officials only in late August, after First Group had been given the goodies. Yet a 15-year franchise extends too far into the future for any sober actuary. Then, only when it all went legal, the lawyers told McLoughlin to pull the plug? Does that make sense, at all?
Before we pass on:
- Hammond was an international business consultant, and adviser to the World Bank;
- Villiers was a barrister and university law lecturer;
- Greening was a high-flying accountant and manager with, among others, the afore-mentioned PwC.
Now for the local news
It might sound familiar, and have echoes of the above.
This one is from the Ham & High, by-lined to Tara Brady, but not on the website (yet):
Doctors in Camden have been snubbed by an NHS trust after it awarded a contract to cover emergency out-of-hours to a private company.
Campaigners from Keep Our NHS Public (KONP) are angry the new contract was handed over to a company called Harmoni. Haverstock Healthcare Ltd, a consortium of local GPs who already run urgent care at the Royal free Hospital, Hampstead and University College London Hospital (UCLH), Bloomsbury, was not even short-listed.
- The local authorities were not consulted.
- There was no public consultation.
- An anonymous outside operation is preferred over local knowledge.
Makes perverse sense in this political climate.
It’s all too secret for the plebs to be involved:
An NHS North Central London spokesman said the scoring process used during the bidding process was confidential and so cold not explain what a private company was chosen over local GPs.
He said: “Haverstock was invited to participate in the procurement process following their expression of interest, and made a submission.
“Unfortunately, they were unsuccessful in being short-listed to allow them to take part inn the final selection stage.”
Doubtless all those “processes” were “robust”.
✱ And already has!
The BBC reports (4 October 2012 Last updated at 19:36):
Former Transport Secretary Justine Greening did not know about the problem which led to the collapse of the West Coast Main Line franchise award, the Department for Transport has said.
The award of the franchise to FirstGroup was scrapped on Wednesday because of bidding process “flaws”.
The Times has reported that she learned of a potential flaw a week before the Cabinet reshuffle on 4 September.
The DfT says this was not the error that caused the process to collapse.
Three civil servants – who face possible further disciplinary action pending an investigation – have been suspended after the government admitted major failings over the contract to run the rail line.
BBC transport correspondent Richard Westcott said the department told him Ms Greening had been made aware of an area of “potential concern” but that she had been told it would “not affect the outcome”.
She asked officials to check it further and it turned out to be a “minor error”. The department insists it is not related to the main flaw that they found later on and which brought the whole process down.
Two days gone; and this
still haven’t manufactured a straight story.