The Department for Transport today scrapped the bidding competition for a 15-year franchise to run Great Western rail services – one of three to be suspended last October in the wake of the fiasco over the flawed award of the West Coast Main Line contract.
But Transport Secretary Patrick McLoughlin announced that the two other competitions – for Essex Thameside and Thameslink, Southern & Great Northern – will be resumed, in a bid to breathe new life into a franchising system which was thrown into disarray by the West Coast debacle.
Unions accused Mr McLoughlin of taking a "sticking plaster" approach to a privatised system which should now be ditched.
In October the Government U-turned on the decision to award FirstGroup the West Coast Mainline, after finding "significant technical flaws" in the way the procurement was conducted.
Virgin are now running the service until November 2014, with the fiasco costing the taxpayer £43 million.
Irresponsible decisions, along with civil service failures, led to the collapse of the West Coast Main Line franchise deal,that's according to a report out today by the Transport Committee.
Last year Virgin Trains lost the contract to FirstGroup, but the deal was scrapped after ministers admitted there were flaws in the bidding process.
Today's report calls on the government to explain why it happened and what lessons can be learned.
This episode revealed substantial problems of governance, assurance, policy and resources inside the Department for Transport.
Embarking on an ambitious, perhaps unachievable, reform of franchising, in haste, on the UK's most complex piece of railway was an irresponsible decision for which ministers were ultimately responsible. This was compounded by major failures by civil servants, some of whom misled ministers.
Many of the problems with the franchise competition, detailed in the Laidlaw report, reflect very badly on civil servants at the DfT. However, ministers approved a complex, perhaps unworkable, franchising policy at the same time as overseeing major cuts to the Department's resources. This was a recipe for failure which the DfT must learn from urgently.
In its report on the west coast mainline fiasco, the Transport Committee has said embarking on the reform of franchising on the UK's most complex piece of railway was "irresponsible" and needed greater senior executive involvement and more technical expertise.
"A more direct description of what happened is that ministers and senior officials were lied to about how the outcome of the franchise competition had been reached." said the MPs' report.
"We cannot categorically rule out the possibility that officials manipulated the outcome of the competition not only to keep First Group in the running for as long as possible, as Mr Laidlaw suggested, but to ensure that First got the contract."
A Government department was today slammed for being "irresponsible" over its role in the collapse of the £5 billion West Coast Mainline rail contract.
A committee of MPs said the Transport Department had embarked on an "ambitious, perhaps unachievable" reform in haste, and claimed that ministers and senior officials were lied to.
FirstGroup was told it had won its bid to take over the franchise from Virgin Trains, but the decision was scrapped after the discovery of "significant technical flaws" in the way the procurement was conducted.
Virgin has now been told it can run the service until November 2014, with the fiasco costing taxpayers over £40 million.
The mistakes came to light after bidder Virgin Trains, which had run the West Coast Mainline since 1997, launched a legal challenge against the decision.
A Government-commissioned report led by businessman Sam Laidlaw last month gave a damning indictment of how the competition was handled.
Three members of staff at the DfT were suspended over the episode.
A second review following the West Coast Mainline fiasco has been published. It concludes that the franchising system should continue, but with stronger and simpler systems in place.
It has dismayed rail unions who say the network should be re-nationalised.
The author of the report, Eurostar boss Richard Brown, said there is no guarantee that mistakes will not happen again in the future. He said he wants a simpler system put in place that places less strain and fewer demands on those bidding for these lucrative franchises.
It all 'came to a head' when the franchising system was 'halted' following the collapse of the West Coast Mainline deal, just as Richard Branson was about to take legal action.
The Transport Secretary Patrick McLoughlin, is now considering these fresh proposals that says continue with franchising, simplify it, make it more rigorous to test it.
The rail unions though are very unhappy, they think a re-nationalisation is in order to get the railways 'moving better'.
The Transport Secretary Patrick McLoughlin is due to give evidence at the inquiry into the Government's handling of the West Coast Mainline franchise today.
Virgin Trains lost the Government contract to rivals FirstGroup in August, but the deal was scrapped after Ministers admitted there were flaws in the bidding process.
Rail franchise contracts should be reviewed every five years in order to avoid the controversy of last year's West Coast Mainline contract.
That is according to a Transport Select Committee report which also recommends delegating the letting and management of future contracts to a separate body with better business knowledge.
MPs have been hearing how an independent report into the West Coast Rail franchise fiasco was changed by the Department of Transport before it was published.
They have been hearing evidence about how the bid to run the line through the Midlands collapsed.
Virgin Trains lost the Government contract to rivals FirstGroup in August, but the deal was scrapped after ministers admitted there were flaws in the bidding process. Today it has been revealed names of civil servants involved were removed from a report published earlier this month.