Government takes over running of Southeastern services following 'serious breach'
The rail company, which serves parts of East Sussex, was found to have not declared more than £25 million of historic taxpayer funding
Last updated 24th May 2022
The Government is to take over running services on train operator Southeastern after a "serious breach" of its franchise agreement.
Transport Secretary Grant Shapps said an investigation by his department identified evidence that since October 2014 the company has not declared more than £25 million of historic taxpayer funding which should have been returned.
Further investigations are being conducted and the Government said it will consider options for more action, including financial penalties.
Mr Shapps said:
"There is clear, compelling and serious evidence that LSER has breached the trust that is absolutely fundamental to the success of our railways. When trust is broken, we will act decisively.
"The decision to take control of services makes unequivocally clear that we will not accept anything less from the private sector than a total commitment to their passengers and absolute transparency with taxpayer support.
"Under the new operator, we will prioritise the punctual, reliable services passengers deserve, rebuild trust in this network, and the delivery of the reforms set out in our Plan for Rail - to build a modern railway that meets the needs of a nation."
Southeastern is run by Govia and operates services across south-east England, covering London, Kent, East Sussex and the High Speed 1 Lines.
Conservative MP for Bexhill and Battle, Huw Merriman has said a need for "confidence in our railways" has likely led the Government to take action against Southeastern Railways.
"This has just been announced at 7 o'clock and I understand the Serious Fraud Office will be involved in this, so there is a limit to what I can say.
"It is my own constituency train operator. I have a season ticket with Southeastern."
The chair of the Transport Committee added:
"It won't make any difference for me as a passenger, the same lovely staff will still drive us where we need to go, the trains will still look the same, but the senior management has been removed.
Rail, Maritime and Transport union general secretary Mick Lynch said:
"This latest public sector rescue of a privately operated rail service should kill off the risky and expensive nonsense of rail privatisation once and for all.
"It appears that this collapse is all about Govia playing fast and loose with their financial commitments and raises serious questions about the viability of their other operations including the busy Thameslink services.
"It's time to put the rest of Britain's failing private rail operations out of their misery, cut out the middleman and build a public railway that's fit for a green, post-Covid future."
The Government will take over running services on Southeastern from October 17, saying a serious breach of the franchise agreement's "good faith" obligation in relation to financial matters was identified,
Ministers stressed the announcement will have no impact on frontline staff, who they said have been at the frontline of delivering services throughout the Covid pandemic.
"The decision is no reflection on their professionalism and dedication and will not affect jobs," said the Department for Transport.
A brief statement on Southeastern's website said:
"Our passengers will see no change in our day-to-day operations.
"All tickets will remain valid after transfer and new tickets can continue to be purchased in the usual way."
Southeastern is operated by Govia, a joint venture between transport operators Go-Ahead (65%) and Keolis (35%).
The company employs 4,000 workers and runs more than 2,000 services on weekdays.
It has almost 400 trains and serves 180 stations.
Southeastern's latest contract started in April 2020, running until October 16, with the option to extend at the Department for Transport's discretion until March 2022.
During the course of the contract term, Southeastern said it would deliver a range of "customer experience improvements" including exploring options to boost capacity as additional rolling stock becomes available.
Go-Ahead Group's chairwoman Clare Hollingsworth said:
"It has always been this group's intention to provide the best possible public transport and to work in partnership with the Government and related agencies.
"We recognise that mistakes have been made and we sincerely apologise to the DfT. We are working constructively with the DfT towards a settlement of this matter."
The group said the release of its results for the year ended July 3 2021, scheduled for September 30, has been postponed.
The group also announced that Elodie Brian has resigned as group chief financial officer and will be standing down from the board with immediate effect.