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Railways: Franchises

Volume 739: debated on Tuesday 9 October 2012


Asked by

To ask Her Majesty’s Government what is their estimate of the cost to the public purse of cancelling the contract award for the West Coast Main Line railway franchise.

My Lords, my right honourable friend the Secretary of State for Transport will make a full Statement in the other place at the earliest opportunity. The department will remunerate fully bidders for the direct and reasonable costs of putting together their bids and expects this cost to be approximately £40 million. The department expects additional costs from mobilising Directly Operated Railways, reissuing the tender and carrying out two independent reviews. The department will monitor these costs closely and be fully transparent in keeping the House informed.

My Lords, it is very regrettable that the noble Earl has not taken the first opportunity in Parliament to say sorry for this fiasco. He should be truly ashamed of what has gone on so I invite him to take the opportunity to apologise. Why are the Government saying there have been regrettable and unacceptable mistakes and yet no Minister is accepting responsibility?

My Lords, some noble Lords express disappointment that a full Statement has not been made. Nobody asked for a full Statement. I was very willing to answer a PNQ yesterday afternoon but there was not one because we have the topical question today. As for ministerial responsibility, noble Lords know perfectly well that this was a highly regrettable mistake by officials, not by Ministers.

Will the noble Earl send word to his colleagues elsewhere that no new franchises should be let for any railway until full consideration is made of the high level of risk which the Government are seeking to transfer to the private sector? I believe that the private sector is unable to bear that risk because predicting revenues 15 years hence is nearly impossible. I commend him to the Mayor of London who is running the London Overground railway on an entirely different basis where the revenue risk lies with the GLC and the people running the franchise are paid to operate the railway efficiently but are not expected to take these unbearable risks.

My noble friend asks extremely good questions and that is the purpose of the Brown review which will look into the franchising system and report back to us by the end of the year.

My Lords, does the noble Earl agree, given the scale of the debacle we have seen on the west coast main line, that the responsibility of senior officials and Ministers should be examined in the forthcoming review? Is he aware that since last Tuesday the only steps that have been taken have been the suspension of three fairly junior officials and the establishment of a review under a member of the DfT’s own board, whose colleagues include all of the senior Ministers and officials of the department? Does the noble Earl agree that this is not a wise proceeding in public policy and it is probably not very moral either?

My Lords, I do not agree with the noble Lord. The first step that the Government have taken is to set up two inquiries. The first one, headed up by Sam Laidlaw, will look at exactly what went wrong. If there was ministerial failure, no doubt he will identify that.

My Lords, if there is anything wrong with the report, the noble Lord will be able to challenge me in this House on that very point. The first inquiry will look at what went wrong. The second inquiry will look at the wider franchising issues, as I said in response to my noble friend. We should be proud of our civil servants. I certainly feel honoured to be served by them. However, officials are human and can make mistakes, even big ones. Nevertheless, I want to make it perfectly clear that I retain full confidence in my department’s officials and I am more than content to account for their activities in your Lordships’ House.

My Lords, in the light of the noble Earl’s earlier answer about the award of other franchises, is he aware of the concerns that are already there about the award of a new franchise for the West Country? Can he indicate the likely impact of any review and the rerunning of this bid on the award of other franchises, including one that has a considerable impact on the economy of the south-west?

My Lords, it is a little early for me to answer in that much detail, but the process for the western region is being paused. However, the difficulty, of course, is with the west coast main line franchise.

My Lords, the House should congratulate the noble Earl on being one of two junior Ministers in the department who have survived. Is it not the case that the other Ministers who presided over this debacle scuttled just before the news broke, thereby denying the absolutely fundamental principle of parliamentary democracy that the buck stops with Ministers?

My Lords, the chairman of the Public Accounts Committee has pointed out that since 2006 there have been eight separate Secretaries of State—more than one a year—and since 2001 there have been six different Permanent Secretaries at the department. In view of that, are the Government surprised when things go wrong in a department?