1. ITV Report

West Coast Mainline fiasco cost taxpayer £50m

Virgin Trains Photo: PA

A critical report by MPs has condemned the £50 million cost to the taxpayer caused by the West Coast mainline fiasco.

The rail franchise bidding process for the service that links the West Midlands with London and the North-West, was cancelled dramatically by the Department for Transport last October. It followed the discovery of huge errors in calculation and the handling of procurement processes.

Today the cross party Public Accounts committee said basic errors, and a lack of common sense at the department, were to blame for the franchise process being cancelled.

The franchising process was littered with basic errors. The department yet again failed to learn from previous disasters. The department failed to respond appropriately to early warning signs that things were going wrong.

– Margaret Hodge MP, Committee Chair
Virgin Trains had lost out on the deal to First Group, but it was scrapped after flaws were found in the bidding process. Credit: PA

The report showed that officials made a number of mistakes in calculation when assessing the rival bids including a failure to factor in the effect of inflation. It says that First Group, who were initially made preferred bidders, were treated differently to their rivals Virgin, who having been rejected were mounting a legal challenge.

MPs said they were concerned that the basic mistakes could be repeated in future projects such as for HS2 and Thameslink.

Following cancellation, Sir Richard Branson's Virgin Trains was asked to continue running the service until 2014 when a new bidding process will be started.

Remarking on the £50 million cost to the taxpayer of the cancellation, Mrs Hodge said: "If you factor in the cost of delays to investment on the line, and the potential knock-on effect on other franchise competitions, then the final cost to the taxpayer will be very much larger."

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