The contract for the running of the West Coast main line has been cancelled, after significant flaws emerged in the franchise process.

This announcement will mean that no franchise will be awarded the railway contract after Virgin’s current contract expires on the 9th of December, with state-owned Directly Operated Railways to run the service instead.

The Department for Transport (DfT) has indicated that key staff involved in the process will be suspended, after flaws emerged in how bidding risks were evaluated.

Such flaws have been linked to the models associated with costs and levers associated with service delivery. A failure in applying effective benchmarking from within the Civil Service resulted in the creation of a untenable contract.

Martyn Hart, Chairman, National Outsourcing Association said: "Another government outsourcing fiasco, developed by people who appear not to understand outsourcing at its most basic level. You’d think that the Department for Transport would understand what drives costs on a railway, but it would seem not. "

DfT spokesman, Philip Rutnam, said “The errors exposed by our investigation are deeply concerning. They show a lack of good process and a lack of proper quality assurance.”