12 December 2012

The full Laidlaw report details exactly what went so spectacularly wrong with the West Coast Mainline franchise process and why. The assessment is damning and highlights some fundamental flaws both in the franchise process and in the Department for Transport.

At the heart of this fiasco is the story of a department attempting an innovative approach to commissioning but never getting to grips with it. The Treasury signed off the process on the basis that this was “a pilot to inform future decisions, but would not represent a final model for future franchises”. Even if the pilot was going to work, it is clear that trying something this big and complex while the department was undergoing a huge re-organisation and cutbacks was a mistake.

The Laidlaw report lays bare severe failings at all levels:

•Cutbacks and turnover resulting from the 2010 Spending Review sapped the department’s capacity and capability for such a major undertaking
•External advice was underused – presumably also to reduce costs
•Responsibility and accountability had been fractured through the organisational re-design
•Pressures on “relatively junior civil servants” were intense with a lack of senior leadership and an “overriding priority to achieve stated timetable deadlines”.

There were also clear individual failings. “Inaccurate statements” were made by officials to the then minister of state on top of the technical errors.

In his response, Philip Rutnam, the Permanent Secretary, argues that the errors were “specific to the West Coast competition… rather than being a cause for wider concern”. There may be some truth in that, given that this was a pilot. It is also an understandable response that defends the rest of the department and removes any link with the wider cutbacks.

However, this raises two major concerns: would a permanent secretary be upfront if their department was being stretched beyond its limits while being asked to conduct something as big and complex as this?

And, while the legal position is clearly tricky, there is no mention of individual responsibility or accountability. Whatever the pressure, misleading ministers is an extremely serious issue.

In our report Transforming Whitehall we raised the issue of a ‘fragile’ Civil Service due to the cuts. With further reductions in “bureaucracy” announced in the autumn statement, this is an early glimpse of what happens when parts get stretched too far.


Two things strike me about this incident and the Laidlaw findings. There are many contributory factors and the relative importance of each of them is debatable. Over-stretch may well be part of the story but the organisational changes at all levels and the lack of ownership of the project seems to be important too. But in view of the complexity, you are right to be sceptical of Philip Rutnam's reassurances. It is possible that they will avoid making the same mistake again but the conditions which now exist are capable of creating a similar cock-up elsewhere.

My second observation is that this review reinforces my view that the obsession we have in this country with treating the civil service as a monolith to be reformed by the centre - in the form of the Cabinet Office- is barking. Surely experience shows that the Cabinet Offices attempts at reform have absorbed vast amounts of time and resources - with patchy results and a diversion of Departments' own management capacity from meaningful reform relevant to their own needs and circumstances.

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