Great Western Coffee Shop

'Poor management' failed Tube firm Metronet

"Poor and inadequate" management by the Department for Transport (DfT) of the failed Tube maintenance firm Metronet cost taxpayers up to ^410m, MPs said.
Managers ignored a 2004 warning from the National Audit Office (NAO) about overseeing upgrade work, the Commons Public Accounts Committee report said.
Metronet, responsible for maintaining nine of the London Underground lines, went into administration in 2007.
The DfT said previous legislation stopped it managing Metronet contracts.
The report put the loss to the taxpayer at between ^170m and ^410m.
Edward Leigh MP, chairman of the committee, said: "The taxpayer has lost up to ^410m as a result of the DfT's inadequate management of the risks arising from the Metronet contracts for upgrading the infrastructure of the Underground. This committee finds it unacceptable that the department ignored the warning by the National Audit Office in 2004 to avoid a hands-off approach to overseeing the upgrades. The department's assumptions were flawed from the outset. It was naive in assuming that Metronet would establish strong financial management and corporate governance. And its assumption that Metronet's lenders would exert strong influence on Metronet's governance and financial health in order to protect their investment was undermined because the department shouldered 95% of the lenders' risks," he added.
Mr Leigh said the way Metronet was handled by the DfT exposed it to "big financial risks".
"These mistakes must never be repeated on future large contracts and government departments must establish and exercise the right to intervene where problems of this magnitude occur," he added.
The report criticised the DfT's "cavalier attitude to protecting public money" but added that "the root causes of the loss to the taxpayer lay in the way the devolved delivery arrangements were set up".
Metronet and Tube Lines were set up under the Public Private Partnership (PPP).
A DfT spokesman said: "The NAO itself recognised that 90-96% of the money spent through the Metronet Public Private Partnership was economic and efficient and that the fundamental failure lies with Metronet.
"We were also prevented from micro-managing the contracts under the terms of the London devolution legislation which is why since the PAC hearing an independent advisory panel has been established to provide expert scrutiny and advice on the TfL investment programme, including the former Metronet contracts."

The end of the controversial Public Private Partnership on the Tube network has been signalled with a deal to bring all maintenance work back in-house.
Transport for London said it had agreed to buy the shares of Bechtel and Amey (Ferrovial) from Tube Lines for ^310m. It said the agreement will involve no extra financial call on the government, taxpayers or farepayers. It added that said the first priority will be to complete the upgrade of the Jubilee Line as soon as possible.
Transport for London (TfL) said that, freed from the complex PPP structure, it was confident of generating substantial savings.
The agreement will mean a "revised approach" will be taken to reduce the impact of line closures beginning with a much less disruptive upgrade programme on the Northern Line.
Mayor of London Boris Johnson said: "This deal is excellent news for London." He said he was confident London Underground and private contractors "are more than capable of delivering the improvements to London's transport network we need, on time and on budget".
Tube Lines was responsible for the Jubilee, Northern and Piccadilly lines.
The deal brings to an end the ^30bn PPP, promoted by Gordon Brown when he was Chancellor, under which large sections of the Tube were sold off on 30-year leases.
Bob Crow, general secretary of the Rail Maritime and Transport union, said the move was "a recognition on a massive scale that transport privatisation does not work and RMT's campaign to roll out the renationalisation of the rail network will continue regardless of who forms the next government".
The takeover follows the collapse of Metronet, the maintenance giant responsible for two-thirds of the Tube, whose staff now work for TfL.

Transport for London to cut 250 more jobs

Up to 250 jobs are to be cut on the underground following the takeover of maintenance firm Tube Lines.

Duplication of jobs and an efficiency drive will lead to managers, clerical and admin staff being laid off.

Tube Lines maintained the Jubilee, Piccadilly and Northern lines but its work was taken in-house this year.

The move comes as unions and transport bosses say they will hold talks to try to stop to a second strike over 800 job cuts.

Transport for London (TfL) said it was aiming to achieve the 250 reductions through cutting temporary posts and voluntary redundancies.

Andie Harper, chief executive of Tube Lines, said: "The acquisition of Tube Lines has given TfL greater flexibility to manage the vital programme of Tube upgrades, saving millions of pounds for London's fare and taxpayers. We are now beginning a consultation with staff and unions on the future shape of Tube Lines in the light of that acquisition."

But Bob Crow, general secretary of the Rail Maritime and Transport (RMT) union, said: "We have been warning repeatedly that transport in London is being lined up for a jobs massacre and this latest announcement is another bitter blow. We have no doubt that even heavier cuts are being cooked up behind the scenes. Our fight for jobs and services goes on."

Fresh talks aimed at averting more strikes by London Underground workers are to be held at the conciliation service Acas next week.

Members of the RMT and Transport Salaried Staffs Association (TSSA) walked out for 24 hours last week, causing disruption to services.

The unions are fighting plans to cut 800 jobs. TfL said there would be no compulsory redundancies.

The unions have announced three further 24-hour strikes for 3 October, 2 November and 28 November.