The government will take over running services on Southeastern trains from October 17, after a serious breach of the franchise agreement’s “good faith” obligation in relation to financial matters was identified, Transport Secretary Grant Shapps has announced.
An investigation conducted by the Department for Transport has identified evidence that since October 2014 LSER (London and Southeastern Railway) has not declared over £25 million of historic taxpayer funding which should have been returned.
To date £25 million has been recovered and further investigations are being conducted by the owning group into all related historic contract issues with LSER. Following these investigations, the government will consider further options for enforcement action, including statutory financial penalties under the Railways Act 1993.
Passengers will see no changes to fares, tickets or services.
Transport Secretary Grant Shapps, 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.”
The running of services will move to the government’s in-house Operator of Last Resort (OLR) which already owns and oversees London North Eastern Railway and Northern.
Today’s decision will also have no impact on frontline staff of LSER.
In future, government will move the services back into the private sector on a new Passenger Services Contract.
In late 2002 the franchise ran into financial trouble, the strategic rail authority gave a £58 million injection to bail it out, with the franchise end date brought forward from 2011 to 2006.
However, despite the cash injection, continuing poor management of its finances the SRA ( strategic rail authority) stripped Connex of the franchise in June 2003, the SRA transferred the services to South Eastern Trains the next day. The company was publicly owned and operated as Southeastern, and on April 1st 2006 they began operating the new integrated Kent franchise.