It won’t come as a surprise to anyone with a whit of understanding about this government to hear that they have ignored the pleas from the rich and famous, various captains of industry, including Lord Sugar, and over 150,000 voters in their haste to wring as much money as they can from the bid for the East Coast rail franchise.
FirstGroup have consistently rated amongst the worst of the train operators in recent passenger satisfaction surveys – the Department for Transport should insist that they make improvements in their existing services before being able to take on other franchises. Virgin have received far greater popularity ratings than FirstGroup in the latest survey report by Passenger Focus, the independent public body set up by the Government to protect the interests of Britain’s rail passengers.
At a national and local level the government and its subsidiary levels are taking a wrecking bar to established facilities and services in a reckless – certain not wreck-less – fashion. The government withdrew funding from Remploy, which lead to the organisation closing twenty-seven factories that employed thousands of disabled workers. The government’s reasoning was simple: the £25,000-a-year per man subsidy would be better spent on individual support to get workers into mainstream employment. Local government bosses disagreed. The leader of one of the local councils, Liam Smith of Barking and Dagenham Council, voiced scepticism about the government’s promise that workers would find jobs in the mainstream market. He had to implement cuts of £14m from the council’s public spending last year and £20m more will follow next year. “The government says these people will be helped into local employment but where are these jobs?” said Mr. Smith. “A single vacancy in this area can attract 100-plus applicants. I know fit, young people with university degrees who can’t get a job stacking shelves at Tesco. What hope do these disabled people have in that climate?” The government should either focus on the long-term cost of their decision at Remploy or admit that they don’t care about the employment possibilities for the long-term disabled.
The Government should look at more closely at the cost-benefit impact of schemes that are intended to provide the opportunity of employment, as is the case at Remploy, or contracts that will bring in more than they do currently, as is the situation with the FirstGroup bid. Economics comprises more than just the highest bidder – look what happened with G4S at London 2012. Decision-making without cost-benefit analysis will only lead to ever greater economic catastrophe and the governments cock-ups are endless. French firm Atos was paid in excess of £120m in the last financial year to carry out about 725,000 face-to-face medical tests on benefit claimants. The assessments were first introduced on a pilot basis by Labour in 2008 and rolled out across the country by the coalition government post-May 2010. These medicals typically last around 45 minutes. Let’s be generous and say that each medical lasts an hour including paperwork from client to client. That means that each medical is costing more than £165 each. You might expect for that kind of money, that the calibre of the assessments would be exemplary, but sadly not so. Officials at the DWP, relying on the Atos assessments, have got many decisions wrong, with nearly four out of 10 appeals upheld at tribunals. The National Audit Office said it was unclear whether the quality of the tests was to blame for the number of wrong decisions. From these examples it is clear that their is not enough analysis predicating government thinking.
On previous occasions when Virgin Rail have lost a bid for a rail operator franchise. the companies that were awarded contracts failed to deliver the revenues or improvements set out in their bids. Transport Secretary, Justine Greening, said the government would “push on” with the 13-year contract because it is a “good deal for taxpayers”. The contract signing could happen on Wednesday. Mrs Greening told the media today that the bidders had “bought into” the “fair and well-established process”. She claimed that if Virgin had won the bid it would have “been perfectly happy with the process”, which is not what the doubts are about. Virgin’s argument is that it is economically impossible for FirstGroup to make improvements and additions to service on the scale that it has, and yet pay much more than Virgin Rail are currently paying for the franchise. Mrs. Greening is ignoring an e-petition that currently stands at 157,321 signatories that the process should be put on hold for further parliamentary scrutiny. If that fails, Mrs. Greening had better hope that FirstGroup can honour their commitments or her job will be up for grabs next.