Cuts in senior staff jobs blamed for West Coast Mainline franchise fiasco

More than 30 senior civil servants in the Department for Transport, including some with direct responsibility for franchising, were axed in the run-up to the West Coast Mainline fiasco, i has learnt.

Documents show that dozens of directors in the department were "eliminated" as part of an aggressive cost-cutting programme while 400 more junior posts were also closed.

Insiders believe that the speed and scale of the staff reductions – alongside cuts in financial consultancy spending and the introduction of a new "fiendishly complicated" 13-year franchise agreement - led to the mistakes being made which are forecast to cost the taxpayer more than £100m. All three areas are set to form part of a departmental inquiry into what went wrong.

Today the Transport Secretary Patrick McLoughlin (pictured inset) will report to Parliament on the investigations into the fiasco and announce details of what will happen to the West Coast franchise after 9 December, when Virgin's contract officially runs out.

Senior department officials have been in discussions with Virgin about giving the company a temporary extension to run the line while the franchise process is re-run and two inquiries establish what went wrong. Mr McLoughlin is likely to confirm that extension today.

Among the posts abolished in the restructuring programme was the Director of Procurement – whose role was to oversee the franchise agreements. The directors of Rail Strategy and Rail Contracts, both of whom would have had a role in the process, were also axed.

One source with extensive knowledge of the department told i: "We always thought the cuts would mean something had to give. We just didn't know it would be this bad."

Another said: "The job cuts at the Department for Transport were faster and more brutal than pretty much anywhere else in Whitehall. They have suggested that it was all been successfully achieved. But with what we know now, you would have to question that."

i understands that staff cuts and restructuring will form part of the inquiry being carried out by Centrica chief executive Sam Laidlaw and Ed Smith, former strategy chairman at PricewaterhouseCoopers.

Next month the think-tank Institute for Government is due to publish a report on the effects of restructuring on Whitehall departments. It looks in detail at the Department for Transport's decision to move faster in cutting staff. A spokeswoman for the Institute said: "This does raise questions over whether the civil service headcount reductions of 20 per cent or other recent changes have disrupted matters."

The House of Commons Transport Select Committee wants to investigate whether the Department was capable of dealing with bids said to be so large the paperwork needed to be transported in vans.