The Government will take over running services on Southeastern, after a ‘serious breach’ of the franchise agreement’s ‘good faith’ obligation in relation to financial matters was identified, Transport Secretary Grant Shapps announced today (Tuesday, September 28).
The Department of Transport (DfT) said operation of all Southeastern services will transfer from London South Eastern Railway (LSER) to SE Trains Limited on October 17.
An investigation conducted by the DfT has identified evidence that since October 2014, LSER has not declared more than £25m of historic taxpayer funding which should have been returned.
The DfT added that to date £25m has been reclaimed and further investigations are being conducted by the owning group into all related historic contract issues with LSER.
Following these investigations, the DfT said the Government will consider further options for enforcement action, including statutory financial penalties under the Railways Act 1993.
The Transport Secretary said: “There is clear, compelling and serious evidence that LSER have 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.”
Today, Bexhill and Battle MP, Huw Merriman, who chairs the Transport Select Committee, said a need for ‘confidence in our railways’ likely led the Government to take action.
On BBC Radio 4’s Today programme, he said: “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. If there appears to be evidence of wrongdoing, then it is right to sweep away.”
The DfT said transferring the running of services to the Government’s in-house Operator of Last Resort (OLR) will ensure passengers see no interruption to their services.
It added that the organisation is run by experienced railway managers, who already own and oversee London North Eastern Railway and Northern.
In an announcement on its website, Southeastern 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.”
Hastings and Rye MP, Sally-Ann Hart said: “I am pleased to see that the Government has taken the decisive and right decision to take over the running of the Southeastern franchise.
“From October 17, the Operator of Last Resort will take over the running of rail services in order to protect taxpayers’ interests. This follows evidence found by the Department for Transport that since October 2014 historical taxpayer funding of £25m, which should have been returned, had not been declared. Trust and transparency with taxpayers is crucial, and ensuring this can be maintained is what this announcement will do. Further investigations are now taking place.
““I want to reassure local residents in Hastings and Rye that these new arrangements will have no impact to customers on the service that is provided and the tickets on offer. The services provided on the Southeastern lines will continue to run as normal.”