00″ height=”100″ />Kate Mingay, one of the three civil servants suspended by the Department for Transport (DfT) after the West Coast rail franchise fiasco, has taken the unusual step of making a statement through her solicitor saying there were “complete inaccuracies in the portrayal of her role”. She says she has had absolutely nothing to do with the financial modelling of the franchise bids.
The suspensions are in severe danger of looking like scapegoating. We still don’t know precisely why the three have been suspended and it doesn’t look as if we’re going to at least until the DfT completes the first of two reviews ordered by the new transport secretary, Patrick McLoughlin. Clearly, careers are on the line.
On Saturday, The Guardian reported the problem involved the input of data into the financial model used in the evaluation of franchise bids, mixing real and inflated figures for revenue and passenger numbers. But the DfT won’t say more and most commentators have had to resort to joining the dots.
One big question remains, however: will the role that ministers have played in all this be examined by the departmental inquiry? My worry is that, given the review is to be headed by Sam Laidlaw, a non-executive director of the department, the role of ministers might not feature too prominently.
Last Wednesday morning, soon after the government announced it was to run the bid process all over again, George Muir, former director general of the Association of Train Operating Companies, said on BBC radio: “The problem goes back to the new franchising policy, a policy that can’t work… You can’t get private companies to take a 15-year revenue risk.” He went on to explain that, under the old ‘cap-and-collar’ method, this risk used to be shared with government.
It occurs to me that Richard Branson’s original complaint wasn’t with data entry errors – which he couldn’t have known about – but with the new policy that Muir referred to, implemented by ministers, that sought to transfer all revenue risk to the franchisee, even when their forecasts appeared to be unrealistic. Branson described this policy as “insane”.
If that is the case, then any data entry errors made by civil servants would be ancillary to the main problem, an issue that ministers might be happier to see played down, while three professionals lose their reputations and their careers. And that should concern every single one of us involved in public procurement.
☛ Andy Davies is a CIPS Fellow. This is a personal view.