Spreadsheet Blamed For UK Rail Bid Fiasco

First time accepted submitter Bruce66423 writes "As a sometime computer programmer who was always very sniffy about the quality of the stuff being knocked up by amateurs aka power users, the current claim that it was a messed up spreadsheet that caused a multi-million pound fiasco is very satisfying. 'The key mechanism... mixed up real and inflated financial figures and contained elements of double counting.'"

Comments

English as a first language

[Okian Warrior]

For those of us who speak English as a first language, here's a translation:

"A messed-up spreadsheet caused a multi-million-pound fiasco."

I think it refers to government financing for some sort of rail transport project in England, but I'm not as sure about that part.

Re:English as a first language

[Anonymous Coward]

I'll try and lay it out in brief:

In the 90's the public Inter city rail system was privitised.

Since then, companies bid for contracts to provide services (13 years in length iirc)

One of the main francises was recently up for renewal (the main route from London to Scotland)

The current holders lost out to a new comer and challange the bid in the courts as being to good to be true.

They lost the trial and the contract was awarded.

It has since transpired (thanks to documents examined in court or documents given a second examination because of the trial, I'm unsure which) that the way the bid was assessed was incorrect.

This was due to a new system being put in place and used for the very first time.

The Minister in charge of this was removed from their Job about 3 weeks before any of this came to light.

This is the first source I've seen providing any actual excuse for what's happened other than "Unexceptable errors".

Re:English as a first language

[didroe84]

The way our railways were privitised (which has been a total disaster btw), is that the government leases out monopolies on routes to companies for 10-15 years. This is about one of the routes coming up for renewal and the contract being taken away from the current operator (Virgin). After the announcement of the winner, Virgin said the other company had made an unrealistic bid and wouldn't be able to operate the route at the quoted rate. Now it turns out the government department overseeing the bidding process has messed up the calculations when assessing the feasibility of the bid.

Re:English as a first language

[Anonymous Coward]

Let's try and fix that for you:

In the 90s the UK rail system was privatised, with various franchises set up to run passenger services on different routes.

The length of the franchises has varied over the years. The government wanted to let longer (~15 years) franchises to try and persuade the franchisees to invest in the routes they serve (short franchises meant they wouldn't be running the show long enough to see a return on their investment).

Five years ago another franchise (the East Coast route from London to Scotland) was let to the National Express group. Two years in they found that they'd bid too high for the franchise and couldn't afford the payments they'd promised the government (or at least weren't making any money). So they walked away and left the government with the keys.

The government had come up with a new method of evaluating franchises to try and avoid this in the future. This was used for the franchise in question (West Coast route from London to Scotland, Manchester, Birmingham). The incumbent, Virgin, put in a bid, as well as three others. One of the others (First) was announced as the winner, but Virgin kicked up a fuss saying that First's bid was too risky: First's bid offered more money to the government late in the franchise, and little in the first years. Virgin's was more evenly spread.

Virgin called for a judicial review of the franchising procedure, as they were entitled to do. The government insisted that the process was followed correctly and said First would take over in December. They started gathering evidence to present their case.

This week they found that they had made major mistakes and would have the book thrown at them if they went in front of a judge. So they called the whole process off and will refund all bidders the money they spent on their bids. (40 million pounds or so.)

Apart from the obvious political fallout there's the issue of who's going to run the railway when Virgin's current franchise period ends. It was extended once for the Olympics, and European competition law might say that it can't be extended again. The government may have to operate it directly instead. But they're already running the East Coast route. And there are four or five smaller franchises that were due to be let over the next two years. The franchise letting process is going to have to be ripped out and put back together again. The process of letting all those franchises will have to be put on hold. Will the government have to take those over in the short term as well? Can they find enough railway managers to do that?

In short, it is a ghastly mess.

So what?

[betterunixthanunix]

Spreadsheets are popular for the following reasons:

1. They are programs that are not based on assigning values to variables
2. Users get a visual representation of where values are being assigned and how values are related to each other
3. The syntax of expressions is familiar, and there is little syntax that users need to learn beyond that

I suspect there are better ways to get all of the above, but that is irrelevant. Does the submitter think that people who use other programming languages do not make such catastrophic mistakes? I think history says otherwise:

https://en.wikipedia.org/wiki/Knight_capital

https://en.wikipedia.org/wiki/Ariane_5_Flight_501

Bugs can be costly, regardless of whether those bugs are in spreadsheets or Ada programs.

ubiquitous

[cratermoon]

Spreadsheets -- well, Excel really -- are inescapable in business.

I know personally of complex multimillion dollar deals in the oil and gas business involving buying and selling entire refineries and gas pipelines where the numbers were all worked out on a spreadsheet.

The insurance industry lives on the spreadsheets put together by the actuaries.

The only consistent reason I've seen for Excel users will give up their rows and columns and have bespoke software created is when the dataset gets cumbersomely large. A secondary reason is when the kinds of calculations needed can't be cobbled together with Excel's function and macro tools. Even then, it's not unheard of for users to demand summary/aggregate reports and analytics that they then copy the numbers from into their spreadsheet to do their scenarios.

Just keep in mind the next time you hear about big money moving around in some deal -- somewhere someone probably had a pivot table for that.

Re:WTF

[Anonymous Coward]

It's funny though how the IT department always has to take over and maintain the garbage spreadsheets and databases put together by the "power user" in various organizations when that person leaves or is transferred. We inherit this utter crap and then are expected to maintain things that never should have been built in an end user computing platform like Excel or the like.