Assessment failures were ‘clearly responsibility of officials and not ministers’, Philip Rutnam tells former transport secretary
The most senior civil servant at the Department for Transport has issued an apology to former transport secretary Justine Greening over his officials’ handling of the west coast mainline franchise.
In a sign of the depth of contrition among senior civil servants, Philip Rutnam made a point of reaching out to Greening, who is said to be livid at the conduct of officials in her former department.
Greening, moved from the transport department in last month’s reshuffle to become the new international development secretary, is understood to have let her displeasure be known in Whitehall. She is particularly angry because she summoned officials to give an explanation after Virgin’s complaint over the decision to strip it of the west coast mainline and award the franchise instead to FirstGroup. Officials initially told Greening they were confident the assessment process was reliable. However, when she asked them to double-check, civil servants reported they had identified one error, but said they were confident it would not have changed the outcome.
This alarmed Greening to such an extent that, at the same meeting on 3 September, one day before the reshuffle, she ordered a full-scale review which was designed to run a fine-tooth comb through the franchise process.
The findings of this review prompted Patrick McLoughlin, who replaced Greening as transport secretary, to abandon the process last week. He said the fault lay “only and squarely within the Department for Transport”. Three officials from his department were later suspended.
In his note to Greening, Rutnam reiterated that the problem was “clearly the responsibility of officials and not ministers” and acknowledged that during the franchise process “both you and Theresa Villiers [then a transport minister] were assured by officials in this department that the process was robust and sound”. That was “manifestly not the case”, added Rutnam.
No 10 said on Thursday that the first the prime minister knew of the severity of the problems with the west coast bid was when McLoughlin made his announcement, a month after the reshuffle on 4 September, in which Villiers was promoted to Northern Ireland secretary.
The apology and Greening’s anger is another example of the often poor relations between ministers in the Conservative-Liberal Democrat coalition and civil servants. The Public and Commercial Services union, which represents one of the three suspended officials, has described the decision as “deplorable, but sadly not out of character” for the government.
The episode has also highlighted questions over the Department for Transport’s practice of only showing ministers anonymised details of franchise bids to ensure they cannot be open to charges of favouritism. Some ministers are concerned that this gives too much power to officials and makes it more difficult for ministers, who are accountable to parliament for the work of their entire department, to maintain proper oversight.
McLoughlin is due to decide on Monday who will run the line while investigations are held before the franchise process begins again.
This will follow two separate investigations also announced by the transport secretary, one into the west coast bid process and the second into the overall franchise system.
The transport department has said that the problems found with the Virgin and First Group bids were focused on assessment of the train companies’ forecasts of passenger numbers and the calculation of inflation. Officials told the Guardian the same mistakes were made in assessing all four original bids for the contract, including two which were dropped at the first stage. However, the decision to suspend the original award suggests that the same error applied to different bid numbers would have differing levels of impact on the assessment.The second reviewwill be led by the chairman of Eurostar, Richard Brown. He is likely to put more focus on ministers since the current franchise system was introduced by the coalition government following a review commissioned by the first coalition transport secretary, Philip Hammond, who was replaced by Greening when he became defence secretary in October 2011.