By Daniel Hunter
The Public Accounts Committee has criticised the Department for Transport's handling of the West Coast Main Line franchise deal, claiming the DfT made 'fundamental errors'.
The 'complete lack of common sense' shown by the DfT is set to see the final bill for the taxpayer to reach '£50 million at the very least'.
The cost might be "very much larger", the Public Accounts Committee warned.
The committee accused the department of making "fundamental errors" and failing to learn from "previous disasters".
A spokesman said the department had taken steps to ensure there could be no repeat of the failure.
“The Department for Transport’s complete lack of common sense in the way it ran the West Coast franchise competition has landed the taxpayer with a bill of £50 million at the very least," the Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, 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.
“The Department made fundamental errors in calculating the level of risk capital it would require bidders to put on the table and it did not demand appropriate levels of capital from both bidders. Faced with the possibility of legal challenge, it cancelled the competition.
“The franchising process was littered with basic errors. The department yet again failed to learn from previous disasters, like the Metronet contract. It failed to heed advice from its lawyers. It failed to respond appropriately to early warning signs that things were going wrong.
“Senior management did not have proper oversight of the project. Cuts in staffing and in consultancy budgets contributed to a lack of key skills.
“The project suffered from a lack of leadership. There was no single person responsible from beginning to end and, therefore, no one who had to live with the consequences of bad policy decisions. For three months, there was no single person in charge at all. Not only that, there was no senior civil servant in the team responsible for the work, despite the critical importance of this multi-billion pound franchise.
“We are astonished that the Permanent Secretary did not oversee the project because he was told he could not see all the information which might have enabled him to challenge the processes, although it was one of the most important tasks for which the department is responsible.
"Given that the Department got it so wrong over this competition, we must feel concern over how properly it will handle future projects, including HS2 and Thameslink. The Department needs to get its house in order and put basic principles and practices at the heart of what it does, with an appropriately qualified and senior person in charge of the project throughout and an accessible leadership team ready and willing to hear and act on warning signs.”
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