Rail Franchising - It's A Mess

Transport Secretary Patrick McLaughlin must be getting used to being hauled before the House of Commons to make statements telling his colleagues what a complete shambles the rail franchising process is. Yesterday he was there yet again, explaining why the process for InterCity West Coast (ICWC) had been such a mess, as incumbent Virgin Rail Group readied itself to carry on a little longer.

He told of “significant errors ... inadequate planning ... flawed process”, but there are more specific and telling revelations. Sam Laidlaw’s review also found that there had been “inconsistencies in the treatment of bidders”, which confirms a point I made when discussing the antipathy that had grown up within the Department for Transport (DfT) over a number of years towards VRG.

When VRG made their legal challenge, they did not touch on this issue – because clearly they were unaware of it – but it is not only material to the process, but also signally disturbing. What Laidlaw is merely hinting at – but, as Sir Sean almost said, I think we got the point – is that the DfT were prepared to favour one bidder, which turned out to be FirstGroup, in order to rid themselves of VRG.

Put directly, that is bang out of order, and it should therefore surprise nobody that three Civil Servants were suspended over the affair, once the errors in the calculations had been discovered and the re-franchising abandoned. It also makes the next stage in the affair that much more sensitive: the DfT really will have to show that there is no favour or disfavour being shown to any bidder.

And there is also a need to do something, and soon: there are other franchises, notably Great Western (the incumbent, also a sensitive point, is FirstGroup), and what is now called Essex Thamesside (formerly C2C, and before that LTS Rail), coming up for bidding. The current process must be sorted soon, or if not, a revised process set up – if there is to be franchising at all in future.

The reason for that last point is that there is now rather more talk of moving, for some of the passenger network at least, to a concession system, like those in operation at both Merseyrail Electrics and London Overground. Commentators such as Christian Wolmar, who has declared an early interest in being the Labour candidate for the next London Mayoral election, are supportive.

Arranged against them, as Wolmar has noted, is the Association of Train Operating Companies (ATOC), for whom the idea of not being able to extract the maximum amount of gravy from one’s train is clearly anathema. But any Government should be able to see that the public purpose is the one that should take priority, rather than the profit maximising imperative of the few.

And that is the problem now facing Patrick McLaughlin. No pressure, then.