PR industry salutes Virgin's ICWC campaign

This from PR Week...
 
Virgin Trains and Fishburn Hedges' successful campaign to save the brand's rail franchise has won Campaign of the Year at the PRWeek Awards 2013.

Inevitable and well deserved. 

DfT - Uniformly dreadful

So. The Public Accounts Committee has published its report into the cancellation of the InterCity West Coast franchise competition.

The accompanying press release is littered with phrases like "complete lack of common sense", "fundamental errors" "littered with basic errors", "failed to learn from previous disasters", "failed to heed advice from its lawyers", "failed to respond appropriately to early warning signs", "did not have proper oversight of the project" and comments that "the project showed a lack of leadership".

The release continues: "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...".

"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."

Quite so.

Of course it is all too easy to snipe from the sidelines.

Therefore, Eye is determined to make a constructive contribution to helping DfT "get its house in order".

On page 42 of the PAC report is this telling gem:

£230,000 on uniforms that will never be worn!!!

Eye insists that all officials at the Department (as well as Villiers, Hammond and Greening) are required to wear these totems of profligacy when in Whitehall and on or about the railway.

Perhaps that might engender a greater sense of team spirit and visible accountability?

UPDATE: This from Alias Schmidt & Jones...

Hey, are there any picture of these uniforms? 

And are they now for sale somewhere?

 If so, where can I get one? 

If not why not?

Eye understands that they are in secure storage and ready to be used as required. Apparently there are sufficient for any large-ish size TOC!

 

Ministers not responsible for ICWC fiasco - Official

Good news for the government in the Transport Select Committee's report into the InterCity West Coast fiasco!

We now know that the following is self evidently not the case:

“More than 45 million pounds of public money has been wasted, the department and the United Kingdom have suffered huge reputational damage and the railway industry is left in a state of uncertainty and therefore Ministers in post at the time of this fiasco should consider their position.”

Indeed!

Furthermore the following actions are not required:

“Ministers at the time must take responsibility for their mistakes and misjudgements.”

Quite so.

And how do we know that Hammond, Greening and Villiers should shoulder none of the blame? 

Because the following coalition members of the TSC voted against the above paragraphs being included in the final report:

• Steve Baker (Con)
• Karen Lumley (Con)
• Karl McCartney (Con)
• Adrian Sanders (LibDem)
• Iain Stewart (Con)

Just fancy that! 

UPDATE: This from Diamond Bob...

I thought Eye readers might be interested in these wise words from iDave when reflecting on another leader whose organisation went seriously awry:

"People want to see real accountability for what has happened. When people have broken the rules, they should face the consequences and this needs a change of culture absolutely."

Yes, Prime Minister. Absolutely.

DfT publishes Laidlaw Inquiry report

This from the DfT (includes links to the actual report)...

West Coast Main Line: Final report of the Laidlaw Inquiry

06 December 2012 11:40
 
The independent inquiry into the cancelled West Coast Main Line franchise competition has concluded that the project failed because of an accumulation of significant errors related to inadequate planning and preparation, complex organisational structure, and a weak governance framework.

Transport Secretary Patrick McLoughlin asked Sam Laidlaw, the chief executive of Centrica and a non-executive DfT board member, to conduct an urgent investigation following the discovery of unacceptable flaws in the procurement process that led to the competition being cancelled on October 3.

His final report, published today by the Department for Transport, finds that:

• The DfT used flawed and inconsistent methodology when guiding bidders on the amount of risk capital (known as the Subordinated Loan Facility) they would need to offer to guarantee their franchise against default (Inquiry report paragraph 4.31, p22);
• The Subordinated Loan Facility figures resulting from the flawed methodology were then varied in a way that contravened franchise competition rules (3.4, p11);
• Ministers made the original August 14 provisional contract award without being told about the critical flaws (2.12, p8) and having been given “inaccurate reports” (3.8, p12).
• But the Laidlaw Inquiry also concluded that:
• The report’s recommendations to strengthen accountability and governance structures “if acted upon quickly and effectively, will help to restore confidence in the DfT’s ability to conduct effective rail franchising and procurement” (paragraph 8.6, p79);
• While there were inconsistencies in the way First Group and Virgin Trains Ltd were treated during the franchise process, the report finds that there is no evidence of a culture of bias against Virgin at the DfT (paragraph 2.6, p7);
• There is nothing in the report to suggest that the flaws discovered in this franchise competition exist in any other DfT procurements (paragraph 8.3, p79).
• The DfT is today publishing its formal response to the report which commits the Department to implementing swiftly a series of actions that will enable it to resume the franchising programme, with the confidence of the rail industry, as soon as possible.

These include:

• Ensuring future franchise competitions are delivered at a good pace based on sound planning, a clear timeline, rigorous management, and the right quality assurance;
• Creating a simpler and clearer structure and governance process for rail franchise competitions, including the appointment of a single director general with responsibility for all rail policy and franchising;
• Ensuring we have the right mix of professional skills, in-house, and where necessary from professional external advisers.

Sam Laidlaw said:

“Building upon and confirming the conclusions from my initial findings, the final report provides an in-depth analysis of the events that led to the flaws whereby the InterCity West Coast competition was cancelled. Alongside this I have also made a series of recommendations for the future.

“I have explained in detail the technical nature of certain errors, specifically around modelling flaws and the Subordinated Loan Facility sizing process. In addition, the report outlines an accumulation of contributory causes including a lack of transparency, inadequate planning and preparation, as well as a complex and confusing organisational structure with weak quality assurance and insufficient governance oversight.

“While it is clear that a number of serious and regrettable errors have occurred, I believe that if acted upon quickly and effectively, my recommendations will help to restore confidence in the DfT’s ability to conduct effective rail franchising and procurement.”

Patrick McLoughlin said:

"The final report from the Laidlaw Inquiry makes extremely uncomfortable reading for the Department. It has identified precisely what went wrong, revealing serious failures, as well as offering us a number of sensible recommendations to put things right.

“We will not allow these mistakes to be made again and the Department is determined to ensure all future franchise competitions are conducted on the basis of sound planning, the rigorous identification and oversight of risk, and the right quality assurance.”

He added:

“Sam Laidlaw has delivered an uncompromising report that offers us a way to face up to a number of shortcomings and I would like to thank him and his team for producing these findings with such diligence and speed.”

DfT Permanent Secretary Philip Rutnam said:

“There is no question that this has been a serious blow for the Department and I am determined that we learn everything we can from this episode.

“We will implement all of Mr Laidlaw’s recommendations, and go further, to ensure we have the right set of skills, support and training to ensure failures like this do not happen again.”
 
Notes to Editors

1. The Laidlaw Inquiry final report to the Transport Secretary is available here:
https://www.gov.uk/government/publications/report-of-the-laidlaw-inquiry

2. The Department’s response to the Laidlaw Inquiry’s final report, setting out the actions being taken immediately to resolve the report recommendations, is available here:
https://www.gov.uk/government/publications/response-to-the-report-of-the-laidlaw-inquiry

3. The Transport Secretary’s oral statement to the House of Commons is available here:
https://www.gov.uk/government/speeches/laidlaw-inquiry-final-report

4. The Laidlaw Inquiry’s final report is only part of the work the Department is doing to review its rail franchising policy. It will also take into account the forthcoming NAO report into the lessons from the cancellation of the InterCity West Coast franchise and the conclusions of Richard Brown’s review of the future of the rail franchising programme, due to be submitted to the Secretary of State by the end of December.


- ENDS -

Virgin gets 23 month extension on ICWC franchise

So Virgin gets a 23 month extension to the InterCity West Coast franchise.

• Revenue and cost remains with DfT (so risk transfer went well then).

•  Virgin to get a guaranteed 1% of revenues under 'management contract'

• The mad midi franchise of two years that was to follow this extension will now not take place.

Here the DfT press release...

Virgin Trains to run improved West Coast services

Rail passengers will experience better services including 28,000 more seats a day under an agreement announced today for Virgin Trains to continue operating rail services on the West Coast Main Line.

The new franchise agreement will run for up to 23 months after which the West Coast Main Line will be let under a long-term franchise.

It coincides with the early completion of a Government-backed deal to roll out 106 new Pendolino carriages, providing passengers with four new 11-carriage trains and lengthening 31 existing trains from nine carriages to 11. A new hourly service between London and Glasgow will also be introduced.

Patrick McLoughlin said:

“We are determined to ensure not only that passengers continue to experience the same levels of service they have in the past, but that services improve. There will be a new hourly service linking Glasgow and London and we will also work with Virgin Trains to explore other service improvements.

“I am also extremely pleased that passengers will benefit from up to 28,000 more seats daily thanks to the delivery of 106 new Pendolino carriages onto the West Coast Main Line which has happened on budget and ahead of schedule.”

Passengers travelling on Virgin Trains will also find it easier to claim compensation if their train is severely delayed thanks to plans for Virgin Trains to introduce an improved Passenger’s Charter incorporating a Delay Repay scheme from 1 April 2013, subject to agreement.

Notes to Editors

1. The 23 month franchise will run from 9 December 2012 until 9 November 2014 after which the West Coast Main Line will be let under a long-term franchise. The Department for Transport (DfT) will be able to shorten this period by up to six months if a subsequent franchise can be let on a shorter timescale.

2. The franchise will operate as a management contract with both revenue and cost risk being borne by the DfT. In return Virgin Rail Group (VRG) will receive a margin of 1% on revenue for operating services. The franchise also makes a provision for the DfT and VRG to agree revised commercial terms that would see VRG take greater revenue and cost risk in the period to 9 November 2014.

3. The 106 Pendolino carriages project has been delivered on budget and ahead of schedule and has resulted from a successful collaboration between the Department for Transport, Virgin Trains, Alstom, Angel Trains and Network Rail.


- ENDS -

West Coast franchise agreement reached?

Sources suggesting that Virgin and DfT have reached agreement on the ICWC franchise.

Believed to be an extension for 13 months.

No information on contractual details.

Expect an announcement shortly...

UPDATE: This from @Captain_Deltic, via twitter...

Taking a punt, look for Virgin to get a 2 year extension with DfT's bonkers idea of bidding for an interim 2 year ICWC franchise binned.

Interesting! Anymore for anymore?

Virgin on the ridiculous - part 94

This from Our Man by the Photocopier...

Virgin Trains has issued a timely press release about Christmas travel which includes the following wise advice:

Planning ahead is the best way to ensure you get back home to your nearest and dearest without a hitch this Christmas.

With less than a month to go before the present West Coast franchise runs out of steam and with still no confirmation of what will happen after 02.00 on 9 December let’s hope this release was sent as an advisory to DafT, where there is precious little indication of any kind of planning and absolutely none of actually getting things done.

Indeed, if the present impasse between Euston and Horseferry Road is not resolved pdq, the only way to get home for Christmas on West Coast will be a nice brisk walk.

McLoughlin & Rutnam in front of TSC today

This from the Transport Select Committee...

ORAL EVIDENCE – WEST COAST MAIN LINE FRANCHISE 

The Transport Select Committee will call the Secretary of State for Transport, Rt Hon Patrick McLoughlin MP, and the Permanent Secretary at the Department for Transport, Philip Rutnam, to give oral evidence on the cancellation of the competition to run the West Coast Main Line franchise.  

Wednesday 31 October at 2.45 pm

Location:  Grimond Room, Portcullis House

Announcing the session Tranport Committee Chair Louise Ellman MP said:

“It is astonishing that the Government has had to cancel the West Coast Main Line franchise competition and delay other competitions. Just last month the Secretary of State told us that he was content with how the Department for Transport had handled the West Coast Main Line competition and that Virgin’s challenge to the outcome would be defended robustly. 

“I expect the Department’s review of what went wrong to be available by the end of this month and we will want to examine that very carefully. We will also want to know how much this episode has cost the taxpayer, what lessons will be learnt, and what will be the wider implications for franchising. In addition, I expect the Committee to look closely at the Government’s review of franchising when it is published at the end of this year."

ENDS

You can view the session live here.

Official Railway Eye Laidlaw Joke

Welcome to the Official Railway Eye Laidlaw Joke!

And here it is:

Q: How come everyone who knows how to run the railway is either cutting hair, driving a taxi or in a 'matrix'?

A: "Unfortunately, no one can be told what the Matrix is. You have to see it for yourself."

Indeed.

ICWC - Unleash the NAO

This from the National Audit Office...

Work in progress: Cancellation of the competition for the Intercity West Coast franchise

Study outline

The Secretary of State for Transport announced today (29 October 2012) the interim findings of the Laidlaw Inquiry into the reasons for the cancellation of the competition for the Intercity West Coast franchise. The Department has also given the National Audit Office access to many of the documents and other evidence supplied to the Laidlaw Inquiry. On the basis of that examination we can confirm that the information that we have seen supports the initial findings made by the Laidlaw Inquiry on what happened and the contributory factors. 

As the Laidlaw Inquiry has highlighted, there are limitations on the conclusions that we too can draw at this stage.  We are conducting further inquiries and once these are completed, we will report to Parliament to provide assurance including on the extent to which wider issues are raised  and are likely to affect the Department’s other projects and programmes, for example concerning:

• the Department’s approach to developing and quality assuring models and other technical tools which it uses;
• the operation of key committees including the information provided to them and how decisions are recorded;
• the rigour with which the Department follows required processes; and
• the skills and capacity available to run projects and programmes.

Reporting schedule

We aim to publish this report before Christmas 2012.

ENDS

DfT: Statement on Laidlaw Inquiry

This from the Department for Transport...

West Coast Main Line: Laidlaw Inquiry interim findings...    
 
The independent inquiry into the Department for Transport’s handling of the franchise competition to run the West Coast Main Line has submitted an initial findings report to Transport Secretary Patrick McLoughlin.

In the interests of transparency, Mr McLoughlin has today published that report, alongside a covering letter, and this afternoon delivered an update to Parliament about this report and wider progress on ensuring continuity of service on the West Coast Main Line.

Sam Laidlaw, the senior business figure and DfT non-executive director leading this independent review, has asked the DfT to release the following statement on behalf of his inquiry:

    “In the limited time available this is necessarily only a preliminary report. What is clear however is that in seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process.

    “These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure and a weak governance and quality assurance framework. The full causes and the lessons to be learnt will be addressed in the final report of my independent Inquiry to be published at the end of November.

    “Firm judgments should not be made based upon what are provisional findings or wider conclusions drawn at this stage.”

ENDS

No mention of the "inconsistency in treatment of ICWC bidders" referred to by the SoS in the House.

UPDATE: Interim version of Laidlaw Inquiry report published here.

McLoughlin to issue ICWC statement this afternoon

So. Transport Secretary Patrick McLoughlin is appearing before the House of Commons today to give an update on the InterCity West Coast franchising fiasco.

Interesting that this is taking place two days before he is due to attend the Transport Select Committee with Philip Rutnam, the DfT's Permanent Secretary.

Also interesting that this announcement was not scheduled in Commons' business until 13:00 today (in the slot reserved for 'Ministerial Statements' - probably some time after 16:30).

And finally it is worth noting that this statement is taking place after Sam Laidlaw was due to present the interim results of his Inquiry into the West Coast fiasco last Friday.

With various comings and goings expected at Marsham Street in advance of this afternoon's statement it could all get very interesting.

Richard Brown Review - Remit published

This from the Department for Transport...

Text of letter from the Secretary of State to Richard Brown
 
15 Oct 2012
 
Following my decision to cancel the competition for the InterCity West Coast franchise, I am asking you to lead an independent Review into the Department’s wider rail franchising programme.
 
I would like your Review to look in detail at the implications for the remainder of the rail franchising programme, in particular, whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible
 
Terms of Reference of the Review are enclosed.
 
Decisions on how to run the Review and who to involve in it are for you as leader of the Review. You may want to draw on independent advice from outside the Department.
 
I ask that you report your findings to me by the end of December 2012.
 
In addition, an independent Inquiry, into the lessons learned from InterCity West Coast, is being undertaken by Centrica Chief Executive Sam Laidlaw. I have asked Sam Laidlaw to provide initial findings before the end of October.
 
Terms of Reference: Brown Review of the Rail Franchising Programme
 
1. The review should consider the implications for the remainder of the rail franchising programme of the position reached on the InterCity West Coast competition.
 
2.This review should take careful account of the points and lessons learned identified in the Laidlaw Inquiry and should also consider:

• How to structure risk transfer between the Department and rail franchisees in order to create optimum incentives in the long-term interests of passengers and taxpayers, and the ability to adapt to changing circumstances.
• How to structure the bidding and evaluation processes to ensure a robust and fair competition, including evaluation of the risk presented by different bids as a basis for decisions that take these risks appropriately into account.
• The timing of the remainder of the franchising programme, so that it can be resumed on a robust basis as soon as possible.
• How the Department can take the learning points from the Laidlaw Inquiry and facilitate a clear and proportionate framework for franchising which balances Government's administrative and commercial judgements with the need for the market to have predictability, transparency and a proportionate application of legal rules.

3. The review should make recommendations on the basis of its findings.
 
4. The Terms of Reference may be refined further following the publication of the Laidlaw Inquiry. The review shall be completed by 31 December 2012 and published thereafter.
 
5. The review will be led by Richard Brown, Chairman, Eurostar.
 
6. The review team should include external expertise as well as expertise from within Whitehall, and some cross-membership as appropriate with the review of lessons learned.

ENDS

Eye prefers Sir Charles Trevelyan's proposed remit published on Eye last Friday.

Laidlaw Inquiry - Remit published

This from the Department for Transport...

Text of letter from the Secretary of State to Sam Laidlaw
 
15 Oct 2012
 
Following my decision to cancel the competition for running the InterCity WestCoast franchise, I am asking you to lead an independent Inquiry into the Department’s handling of the competition.

I would like your Inquiry to identify the lessons to be learned for the Department and for you to recommend what measures the Department should implement to ensure the sound running of future competitions. Terms of Reference of the Inquiry are enclosed.
 
Decisions on how to run the Inquiry and who to involve in it are for you as leader of the Inquiry. You may want to draw on independent advice from outside the Department and from other Non-Executive Board Members.
 
I ask that you report your initial findings to me on Friday 26 October and to provide a final report by the end of November.
 
Terms of Reference: Inquiry into the Lessons Learned for DfT from InterCity West Coast (“ICWC”) competition
 
1. The Inquiry shall identify the lessons to be learned from the Department’s handling of the franchising process for ICWC in order to ensure the Department maximises benefits to transport users and value for money for taxpayers in future franchise competitions.
 
2. The Inquiry will comprise an immediate study of the lessons learned following the discovery of significant technical flaws in the way the franchising process for ICWC was conducted which resulted in the cancellation of the ICWC franchising process on 3 October 2012, in particular:
 
a. The course of events in DfT that led to these technical flaws in order to identify what happened and why it happened up to the point that the intention to award the contract was announced on 15 August 2012;
 
b. The roles and responsibilities of different advisory and decision-making parties within DfT and externally in relation to these flaws, including the Board Investment and Commercial Committee, the Contract Awards Committee and the Rail Refranchising Programme Board; how well these committees performed their roles, and what can be learned from this about the appropriate structure for governance and assurance of major contract awards;
 
c. The arrangements for ensuring appropriate review of the technical elements of contract award and appraisal and appropriate quality assurance.
 
3. The Inquiry should make recommendations on the basis of its findings.
 
4. The Inquiry will be led by Sam Laidlaw, DfT’s lead Non-Executive Board Member who also leads on procurement among Government Non-Executives. He will draw on others as he sees fit, including from other Non-Executive Board Members. By agreement, Linklaters and Ernst & Young have been appointed to provide an external perspective to the Inquiry.
 
5. The Inquiry should be completed as soon as possible. Initial findings shall be made available to the Department by 26 October.
 
6. The Inquiry will be taking place in parallel with the Department’s HR investigations. The Laidlaw Inquiry Report will be published no later than end November 2012.

ENDS

Virgin set to get extension as DOR deactivated

This from the Department for Transport...

Department for Transport to negotiate with Virgin on temporary operation of West Coast rail services

The Department for Transport will negotiate with Virgin Rail Group for them to continue providing rail services on the West Coast Main Line for a temporary period.

The current franchise is due to expire on 9 December after which it is the government’s intention that Virgin remain as operator for a short period – expected to be between 9 and 13 months – while a competition is run for an interim franchise agreement. This interim agreement, which would be open to any bidders, will then run until the new long term West Coast franchise is ready to commence.

The government believes that this is the best way to ensure services are maintained and that there is no impact on passengers.

Transport Secretary Patrick McLoughlin said:

    “The cancellation of the InterCity West Coast franchise is deeply regrettable and I apologise to the bidders involved and the taxpayer who have a right to expect better.

    “My priority now is to fix the problem and the first step is to take urgent action to ensure that on the 9 December services continue to run to the same standard and passengers are not affected.

    “I believe Virgin remaining as operator for a short period of time is the best way to do this and my officials and I will be working flat out to make this happen.”

On 3 October the previous competition to run trains on this line was cancelled following the discovery of significant technical flaws in the way the franchise process was conducted.

The department also paused the on-going franchise programme including live competitions on Essex Thameside, Great Western and Thameslink and set up two independent reviews into what went wrong with the West Coast competition and the wider DfT rail franchise programme.
 
Notes to editors

• The Transport Secretary has ordered two independent reviews:
• The first will be an urgent independent examination into the lessons to be learned from the department’s handling of West Coast competition. Conducted by independent advisers and overseen by Centrica chief executive Sam Laidlaw and former PricewaterhouseCoopers strategy chairman Ed Smith, both DfT non-executive directors, this review will look as soon as possible at what happened and why with a view to delivering an initial report by the end of October.
• The second independent review will be undertaken by Eurostar chairman Richard Brown CBE, and examine the wider rail franchising programme. It will look in detail at whether changes are needed to the way risk is assessed and to the bidding and evaluation processes, and at how to get the other franchise competitions back on track as soon as possible. This will report back by the end of December.

ENDS

UPDATE: This from Directly Operated Railways...

Taxpayers will be relieved to know that we are not so much deactivated, as waiting in the wings! 

DfT: Throwing good money after...

According to Her Majesty's Daily Telegraph...

The Department for Transport has asked headhunters to search for senior managers who could run the West Coast rail franchise on behalf of the state-backed Directly Operated Railways (DOR) from December 9.

A spokesman for the DfT said the decision to appoint recruiters was part of the department’s “contingency planning” to determine whether a senior management team could be found quickly enough if the DOR is put in charge of the franchise.

What a lot of wags there are in the Department for Transport!

Safety cases not withstanding.

And precisely how much is this costing and who is paying?

UPDATE: This from Captain Deltic...

Is this the smoking gun that proves an 'ABB' mindset really exists?

First for faith over adversity?

This from the Scotsman...

First Group, the Aberdeen-based transport firm that beat Sir Richard Branson’s Virgin Rail to win the west coast main line franchise, expects to take over the running of the route on time despite the ongoing legal challenge.

Hmmm....

As the franchise documentation has been returned to the bidders following Virgin's legal challenge and mobilisation is assumed to take 120 days from contract sign, First's confidence in being able to meet the 9th December start date seems very brave, as without a contract they are presumably mobilising at risk?

Eye wonders how First's costs are being covered or whether they are being underwritten?

And if so, by whom?

Virgin gets its day in court!

So purveyors of popcorn are in for a bumper month of sales!

Last Friday saw a pre-hearing for Virgin's application for a Judicial Review into the process behind the InterCity West Coast franchise award.

M'learned friends are expected to square up in court on the 17th or 18th of this month, with legal debates expected to last a number of days.

Hopefully all interested parties will remember that this Thursday is the cut off point for submitting evidence...

UPDATE: This from Steve Strong...

As no doubt the wheels of Justice will take many months to turn, DOR must now be a shoe-in for running InterCity West Coast from the 9th December.

Unless of course the newly emboldened ORR objects...