'Errors' in West Coast bid

Today's interim report shows just how important our calls were in the summer to find out what went on behind closed doors when deciding the future operator of the West Coast franchise and that it should be opened up to proper detailed scrutiny.

As well as the technical errors the review has identified, it raises fundamental questions around why more favourable treatment was given to one bidder over another and the lack of a clear and consistent account of how and what decisions were made.

All of this is a matter of serious concern and we hope these issues will be explored in greater detail in the final report by Sam Laidlaw.

Regardless of the catalogue of problems identified with the assessment process itself, we remain very clear that our own bid was robust and deliverable.

Lessons must be learned to prevent the process failures we saw with the West Coast competition from happening again and to protect the taxpayer and passengers from phoney bids that game the system.

In the short term passengers will need to be reassured by the Government that their day-to-day service won't be affected by the cancellation of the competition to run the West Coast franchise.

Longer term, the Government will need to work hard to restore confidence in the franchising process as these decisions affect millions of passengers on a daily basis.

Passengers will also want to know that the burden of costs arising from this cancelled process will not be directly passed on to them through hikes in fares.

In dealing with this, my department has been frank and open about its mistakes and is absolutely determined to find out exactly what happened.

It is clear that the inquiry has identified a number of issues which confirm that my decision to cancel the franchise competition was necessary.

These include a lack of transparency in the bidding process, the fact that published guidance was not complied with when bids were being processed, inconsistencies in the treatment of bidders and confirmation of technical flaws in the model used to calculate the amount of risk capital bidders were asked to provide to guard against the risk of default.

The Laidlaw inquiry also mentions factors "that appear to have caused or contributed to the issues raised".

Do you agree ministers must take responsibility for serious or systematic performance failures, flawed policy and poor design?

Ministers must not be allowed to shuffle off responsibility - not my words but the words of the Prime Minister. This isn't just a faulty process, it's a faulty Government.

I would guess that bidders for other franchises will claim back the costs of their bids as well, so yes I think it’s likely that it may well be £100 million.