THE Department for Transport has issued a penalty notice and fined the former operator of Southeastern £23.5 million for breaches in its contract. These led to a multi-million pound shortfall, and it has now been revealed that this had been accumulating since 2006.
In September last year the transport secretary announced that, following the breach of trust, Govia’s Southeastern contract would not be renewed. The DfT had discovered that between October 2014 and March 2020 Southeastern had ‘deliberately concealed’ over £25 million in taxpayer funding for HS1 access charges, which should have been returned to the government.
The DfT has also uncovered evidence of similar underpayments by the operating company London and South Eastern Railway Limited during Southeastern’s previous franchise agreement, which ran between April 2006 and October 2014.
Transport secretary Grant Shapps said: ‘I took decisive action and did not renew the contract with Southeastern following this appalling breach of trust. Our rapid and firm action protected taxpayers and passengers – ensuring much-needed services continued to run.’ He continued that Southeastern’s behaviour had been ‘simply unacceptable, and this penalty sends a clear message that the government, and taxpayers, will not stand for it.’
The DfT was already recovering £64 million from Southeastern in relation to breaches of the franchise agreement, but the new penalty notice adds a further £23.5 million.
RMT general secretary Mick Lynch said: ‘The privatised financial scandal on Southeastern is no fluke. It reinforces our case that franchising on our railways was always a racket and that this scam was the tip of the iceberg. Financial sanctions are not enough. Govia should be stripped of the rest of their lucrative London commuter routes as part of a plan to rid our railways of the privatisation nonsense once and for all.’
Go-Ahead Group, which is the majority shareholder in Govia alongside the French firm Keolis, has made a short announcement today confirming the DfT’s action, adding: ‘The amount payable to the DfT is expected to be settled from LSER’s restricted cash balance.’ Go-Ahead had previously apologised for the franchise breaches.