Oh No Minister!
I cannot remember so big a hash up in a government department since I started working as a hack in the 1970s. The rail franchise failure is massive. People talk of us taxpayers being in for £40m – but it is likely to be far, far more.
There are the lawyers’ fees and the new raft of private sector accountants who will doubtlessly be hired to check the figures.
Then there are the vast sums required to compensate the rail companies to ensure that they keep running trains after their franchises come to an end.
Speaking of legal fees – Richard Branson’s Virgin Trains may have effectively won their case, but FirstGroup can now be expected to sue over their own issues in the process.
Yet the Department for Transport is a department that has been headed first by Philip Hammond – a man deeply versed in City finance – and latterly by Justine Greening who is a fully qualified accountant. How can they have got all this so wrong?
What is the state of the DfT’s civil service infra-structure? Were private sector accountants involved in the process? If so which of them?
We have long been told by rail experts, including the former train operators’ Chairman George Muir, that the franchising system doesn’t work anyway, and cannot.
It will stick in the coalition government’s throat like a claw, but the most likely outcome of this grim scandal may prove to be the necessary re-nationalisation of the entire rail system. In a cruel irony, the DfT will then have even greater powers to make a mess of not just three franchises, but of the whole bang shooting match.
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There are 26 comments on this post
Jon,
I am, of course, rolling around with laughter at this one. Either that or I burst into economic tears. This evil, thieving nonsense has been apparent for over thirty years and STILL it goes on – apparently nobody has told Sid yet.
It is commonsensical that all systems need to be administered. So, why be surprised if you replace a nominally altruistic bureaucracy with a profiteering bureaucracy? A generation ago the establishment said openly they intended to steal everything not nailed down, and they did. Naturally, they had to hire a compliant bureaucracy to help them do it. So they did and called them “consultants,” who were suitably bribed with large unearned fees.
Meanwhile the whole process has exposed the civil service as just as culpable as the politicians in corrupting what is left of our society and culture (you remember, those entities which “don’t exist,” according to Thatcher and Ayn Rand).
And still no bankers arrested……none charged…..none in jail……I guess there’ll be no “British Spring” hey?
Philip , I am glad you are rolling around with laughter. I for one am sick to the core of being financially, professionally and ethically abused whilst the thieves continue with their noxious games, but I agree with you to a point, however surely the pivotal theme, being dishonesty is not able to be correlated with either a nationalised or private industry. It is those who are backed up by the law, in all its forms and are allowed to get away with it.There will be no UK spring here,because the majority who take care of the male and female brats of this era come from a background where ethics were unspoken and people knew the difference between honour and dishonour. Now we write about ethics and are shot down as though they are a snobbish element in day to day life. Who has put about these perculiar perceptions ?One conclusion may be that it is the dishonest who thrive on criminality.
Dear Mr Snow,
I have to say, I’m confused. What exactly were the irregularities that the MfT referred to that led to the cancellation of their decision and the overal competition? I think it’s anything but clear.
Also, had the government already signed a contract? If so, surely this is a massive blow to the legitimacy of contract law in the eyes of businessmen and women working with the government. FirstGroup must be seething with rage over this balls up.
Cann please enlighten us as to what the hell is going on??
Kind regards,
Ben
Re nationalisation of the rail system would be a pointless and v expensive exercise. Better to keep the current “bidding system”, but make it totally transparent with an agreed procedure and allow all the bids to be made public after the decision. Then allow a short period of time for an appeal. All merit to Richard Branson for exposing the useless, incompetent and overpaid civil servants who actually run this country. Also shame to the MPs who are not more vigilant in their responsibilities of government to fully supervise their departments.
“All merit to Richard Branson for exposing the useless, incompetent and overpaid civil servants who actually run this country.”
“Also shame to the MPs who are not more vigilant in their responsibilities of government to fully supervise their departments.”
…well said fella. Post of the day/week/month/year. In fact, two of the best sentences **ever** posted on this blog.
So here’s a challenge for you Jon. You love going after politicians (possibly the blue ones more than the red ones), But how about going after some of those wasters & freeloaders who are permanently in power. I mean our glorious civil service. How about calling them to account, and get an apology* out of them
Bet you can’t.
* they’re all the fad these days. Yesterday I heard some BBC mug interviewing the transport minister and asking him to apologise. It’s a bit like being asked to apologise for your auto-cue breaking down. and the mug behind it. Like it makes a difference !!
Re nationalisation is not the answer. Competitions should be allowed in order to allow competitive pricing. Unless renationalisation can bring a fairer price then it is not the answer.
Maybe they ought to also look again into the procurement procedure for the IEP (Inter City Express). Most Industry experts are saying that we have signed up to an overweight, expensive to lease and expensive to run white elephant that is being forced onto the train operating companies by the DfT and is not what any of them really want
Oh great! Let’s replace Virgin’s excellent service by going back to British Rail.
For once, I don’t think politicians are to blame in this case – other than the original privatisation & agreeing the franchising process. The process is technical & complex, partly because it’s a long contract, partly to ensure fairness. but is isn’t rocket science – nor has it just appeared on the Dept of Transport brand new from outer space. Those accountable would seem to be some civil servants and possibly private sector advisers. If they are accountable, that should be made public. But that still begs the question as to when Branson challenged the basis of the decision, did Ministers ensure that a proper independent check was carried out? Or, because it was at the end of the long & expensive process, did they take the easy way out? Was anyone in the Dept of Transport aware that something was wrong? When? (As for renationalisation – I thought that was being done by giving everything to First Group?)
* Claw in the throat? I can’t remember the film, but the bad guy (Japanese or Chinese) called himself “Mr Craw” instead of “Mr Claw”. Have you got the reverse problem, Jon?
I can’t believe that this is the only government department that is so inept when it comes to matters financial. A close transparent scrutiny of all dealings of this type throughout government , e.g. Ministry of Defence, would no doubt reveal millions more of tax payers’ money seeping away. So much for Cameron’s election promises that the tory government would ensure efficiency savings to help offset the deficit in public finances.
Bring back BR – it must surely be cheaper in the long run to bring back franchises, as they expire, to State ownership.
The whole system is muddled, not transparent, rigid and expensive with little accountability. Here in Cornwall we have 30-40 year old rolling stock and it takes longer to reach London than 20 years ago.
We have so many companies taking a ‘cut’ from the system – rail companies. rolling stock leasors, ticketing companies and so on. We also have the ‘fines’ collected from Network Rail by the operators retained as profit. The time is up for this ‘gravy train’!
Much talk today about a u-turn on the railways, but, no mention of derailment.
For a u-turn on the railway – go to Ely – the North Curve.
Signed, a BR ‘Blue’ Anorak !
From this a great debate will ensue, no doubt. The public were simply not convinced that this was a credible change to make. It is better to get this aired, debated and got right now than to neglect the underlying issues. If it isn’t right, it’s wrong. Let Virgin continue until the questions are aired, debated and lead to a better way ahead.
Jon
The current system was never thought up as a whole – several different ideas seemed to have dropped onto a civil servant’s desk at the same time, with the transport Minister pressing for a way to privatise the railways. Four ideas were merged into one, which was deemed the cheapest way of managing a declining rail sector. But the railways grew as the economy grew. The current system doesn’t really create a real market and is immensely complex. In some ways it is now simply the government running the railways at arm’s length. The Conservatives defend it because they created it, but I don’t think even they think it is, or ever was, a good idea. The whole system needs to be rethought and reconfigured, probably joining up operations, rolling stock and track and divided the system into regions.
I have to admit this made me smile this morning. Finally they’ve been found out. Outrageous that Virgin had to get as far as court action and outrageous that ministers sat on the report Mr Branson gave them in August. Don’t know whether to laugh or cry!
Being one of the poorer people who is employed in this industry I can only say it doesn’t work in this guise and never will, it’s a service industry as is a library or hospital and is there to serve and help the community and not to make a profit. That’s the reason the entire network became British Rail in 1948. Our countrys’ population has increased many times over since then and staffing goes down every year as passenger numbers go up….. and still money is wasted painting trains different colours and re-franchising. The West Coast has had tens of millions of pounds of investment poured into it over the last ten years, all from the tax payer. Why does it have to now be run as a profit making business for shareholders,. Can’t the tax payer make a profit. How much has the East Coast made or lost in the last three years…. Answers on headed paper only please from the dft…………………..
Whatever the outcome of this fiasco and I have totally failed to understand the reasons behind the current mess, other than the inevitable corporate rivalry, damaged egos,and political machinations [nicely timed to coincide with the Labour Party Conference}
Please, please no return to British Rail and nationalisation .
Dear Hack
It is highly unlikely that First group will sue the DfT as they have a vested interest in getting more franchises or what ever next they will be called. First will be getting their dosh back (in a brown envelope no doubt), but will all the bidders including those not short-listed get their cash back?
As for re-nationalising the railway system – it is clear that is an impossibility, given the deliberate way it was privatised…just think of all that state compensation, ROSCO’s; Network Rail’s debt all the engineering contractors and long term franchises still running…no, BR will never happen again because of the state we’re in…it’s called the state of the government and what a state it’s in. We’re just waiting for the next statement of state – meanwhile all’s well with the railways on the Isle of Man – whoops sorry, forgot they’re state owned!
You rightly challenged Simon Burns this evening about what ministers knew at the beginning of August; it seems to me that Justine Greening, McLaughlin’s predecessor, needs to explain her apparent inability to spot basic flaws in the process, even after Virgin had flagged them up.
But what of Theresa Villiers, who had direct responsibility for Rail at the DfT until the reshuffle, and Phillip Hammond who changed the franchise bid process last year ??
If ministers want to continue blaming only the civil servants, they are effectively conceding that they themselves have no real idea of what is going on, that they are in fact completely dependent on what they are told.
The question is, will their Hubris lead on to their Nemesis?
That might actually depend on Channel Four News.
well said andrew
Jon,
I have to admit I am sore with you for taking Richard Branson seriously in all this, given his massive failures with the West coast line, the amount of public subsidy he and his business mates have received, and the disruption their favoured trains have caused to other services. In my personal view, he is about as serious and virtuous as the average British banker!
Bringing the railways back into public ownership VERY popular with far-from lefty Any Questions. As well-regarded transport commentator Christian Wolmar (http://www.christianwolmar.co.uk) points out, it wouldn’t cost anything either – just let franchises run out. I back that!
“it wouldn’t cost anything anyway”!!!!!!! Although the rail companies are subsidised, it would cost that plus the millions that the companies themselves have pumped into the system
.On top of that can you imagine the rise in union militancy to price their members out of a job?
those who call for a return to state ownership clearly do not remember the overmanned, union led industries of the past and their expensive inefficiencies.This shambles can be rightly put at the door of governments.Firstly at whoever devised a complex difficult to understand bidding system,secondly the current ones who clearly did not understand the implications of the bids and their decision.
More importantly than that, though,it brings into focus the extreme power of an unelected civil service,many of whom believe they are the government.We have seen it recently in other adpects of government where departments have clearly briefed against and challenged government and ministerial decisions