COMMENT
and PPI. If TfL’s borrowing limit had been raised, it would have directly increased public borrowing by that amount.
“As for the DfT and Thameslink, I think behind it all is conservatism, an absence of expertise that would allow them to do anything else, and the fact that they would be entering a new and complicated world to do it differently. It quite suits them to have one bottom line on a bundled contract, because that provides them with their decision.”
Procurement specialisation
“The last successful case of industrial poli- cy procurement in the UK,” Professor Wil- liams said, “was North Sea oil, where 75- 80% of the value of the contracts, the rigs and the pipeline and the rest, was manu- factured in the UK, as a result of industrial policy under Thatcher. That did require a departmental specialism – a sub-section which actually understood the industry, understood the technology, understood the capabilities of producers, and worked to match supply and demand. I don’t think the DfT has that kind of expertise.
“The DfT has a procurement department – but that is all about issuing contracts and managing them, not anything to do with arranging things so that train manufactur- ing in the UK would be maintained and en- couraged.”
That is precisely the opposite of what many think happened with the Thameslink roll- ing stock decision.
that gives you the right answer to the two questions.”
Bundling blunder
He continued: “The real success we had was that the CRESC report, ‘How not to build trains’, highlighted bundling as the basic mistake, and that’s been carried through into the select committee report, and I hope we do in time learn how to un- bundle things.
“Fundamentally, that’s because it’s not about least cost, but also about industrial policy. Each one of those jobs at Bombar- dier in Derby represents a family living in decent circumstances, buying a house, buying a car, bringing up kids decently: the job underpins desirable values. Contrast
“It’s also about our £80bn balance of pay- ments deficit, and the amount we import.”
There was disappointment in some circles at reports that Transport Secretary Jus- tine Greening will not allow TfL to extend its borrowing limit in order to pay for the Crossrail rolling stock directly: instead, private financing will again play an impor- tant role. Some saw the decision as being an extra boost to Siemens, which can bor- row more cheaply than Bombardier.
Professor Williams said: “From the Treas- ury’s point of view, this is not a procure- ment issue – it’s a public debt issue, it’s PFI
that with East Manchester, for example, which never recovered from early 80s de- industrialisation.
“That was something that all men of good- will wanted to do,” he said. “It was clearly in the national interest, and would be po- litically advantageous; it wasn’t a party po- litical issue. Derby Council is Conservative. People like Margaret Beckett, one of the most active of local MPs, is Labour.
“In retrospect, it was quite extraordinary. You couldn’t find anybody to stand up and defend the decision and the criteria – in- cluding the Transport Secretary! What’s really hard to explain is why we still don’t know the detail of the contract. My assump- tion is we don’t know that partly because if people knew there was a several hundred million pound advantage to Siemens tied in with the bundling, that would cause further political problems.
“Although everybody agrees that things should be done differently, we still don’t know what the original terms of the con- tract are. And the next major contract, Crossrail,
after apparently the turning rail technology magazine Dec/Jan 12 | 19
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