Government takes over Southeastern rail services from TODAY after franchise holder failed to declare £25million of taxpayers’ cash
- Switch involves Dept for Transport running trains under Operator of Last Resort
- Staff will remain in place and passengers are unlikely to see immediate changes
- Franchise owned by Govia – a joint venture between Go-Ahead Group and Keolis
- An investigation found Govia had not declared over £25m of taxpayer funding
Train services on Southeastern’s network will be taken over by the Government today after the franchise holder failed to declare over £25million of taxpayers’ cash.
The switch, announced last month, involves the Department for Transport (DfT) running trains under the Operator of Last Resort (OLR).
Southeastern’s network is one of the busiest networks in Britain, stretching across south-east England including London, Kent, East Sussex and the High Speed 1 line.
Passengers are unlikely to see any immediate changes as the trains, timetables and fares will stay the same, and staff will remain in place.
The franchise was owned by Govia – a joint venture between Go-Ahead Group (65%) and Keolis (35%) – since 2006.
Go-Ahead Group’s chief financial officer Elodie Brian resigned after the decision to take over the franchise was announced.
Transport Secretary Grant Shapps said at the time an investigation by his department identified that Govia had not declared more than £25 million of historic taxpayer funding which should have been returned.
Train services on Southeastern’s network will be taken over by the Government today after the franchise holder failed to declare over £25million of taxpayers’ cash (file photo)
He added that the Government would not accept ‘anything less’ than ‘absolute transparency with taxpayer support’.
Further investigations are being conducted and the Government is considering options for more action, including financial penalties.
Anthony Smith, chief executive of passenger watchdog Transport Focus, said: ‘Whoever runs Southeastern, passengers will want a reliable service which delivers on their key priorities: a punctual, reliable, clean train, with enough room to sit and stand, and value for money fares.’
The OLR also runs services previously operated by two other franchises.
It launched London North Eastern Railway in June 2018 and Northern Trains in March last year.
Analysis shows that the takeover of Southeastern’s network means around a quarter of passenger journeys in Britain will be on trains under public sector control.
Southeastern’s network runs across South East England, covering London, Kent, East Sussex and the High Speed 1 line
This graphic shows the UK rail network split by operator. Only LNER and Northern are operated by the Government, but Southeastern is joining them today and ScotRail in March 2022
UK rail franchises under Government control
Southeastern’s services will be run from today by the Government Operator of Last Resort, which already oversees London North Eastern Railway and Northern. Here is why the other two franchises ended up in the control of the DfT:
LONDON NORTH EASTERN RAILWAY (LNER)
The Government’s Operator of Last Resort has run services on the East Coast Main Line as London North Eastern Railway since June 2018, following the failure of the Virgin Trains East Coast franchise.
Trains on the route were brought back under public control with the London North Eastern Railway (LNER) brand being resurrected from the 1940s.
The East Coast route connects London King’s Cross to stations in the North and Scotland including York, Leeds, Newcastle, Edinburgh, Aberdeen and Inverness.
VTEC, a joint venture between Stagecoach (90 per cent) and Virgin (10 per cent), began operating in March 2015.
The firms agreed to pay the Government £3.3billion to run trains until 2023, but the contract was ended prematurely after they failed to achieve revenue targets.
Stagecoach lost around £200million over the course of the contract. VTEC was the third private operator to fail to complete the full length of a contract to run East Coast services.
GNER was stripped of the route in 2007 after its parent company suffered financial difficulties, while National Express withdrew in 2009. Trains were run by the DfT for six years up to VTEC taking over.
Rail services on the Northern rail network were taken under public control on March 1, 2020 following years of poor performance.
Arriva-owned Northern had received the lowest overall score of all train companies in a major survey by watchdog Transport Focus, with just 72 per cent of passengers were satisfied with their journey.
And Office of Rail and Road figures showed only 55 per cent of Northern trains arrived at stations within one minute of the timetable in the 12 months to February 1, compared with the average across Britain of 65 per cent.
The chaotic introduction of new timetables in May 2018 saw hundreds of Northern trains cancelled each day.
Northern was Britain’s fifth-biggest rail operator based on passenger journeys. It began operating in April 2016 and was awarded the franchise until March 2025, but Grant Shapps announced in January that its contract would be ended five years early.
Problems faced by the firm included cancelled infrastructure projects, delays in the delivery of new trains and prolonged industrial action.
Cat Hobbs, director of public ownership campaign group We Own It, said: ‘Again and again, privatisation is failing our railway and franchises are being brought into public ownership one by one.
‘Profit-driven companies won’t put passengers or the public first – especially as the railway is a natural monopoly where we don’t have a choice between companies.
‘It’s time to bring the whole rail network into public hands where it belongs. Public ownership would save around £1billion a year.’
Southeastern has been running services since 2006, operating one of the busiest networks in the country including the UK’s first domestic high-speed service with Javelin trains.
It employs 4,000 workers and serves 180 stations using a fleet of almost 400 trains.
According to the firm’s website, 640,000 passengers use 2,016 services every weekday. It also runs 1,755 train services on Saturdays and 967 on Sundays.
Southeastern’s latest contract started in April 2020, running until October 16, with the option to extend at the DfT’s discretion until March 2022.
At the time of the announcement, Go Ahead’s chairwoman Clare Hollingsworth said: ‘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.’
Rail, Maritime and Transport union General Secretary Mick Lynch previously said: ‘There now needs to be a forensic examination of all the private rail contracts.
‘It defies belief that even after this scandal was exposed that Govia are still running UK rail services.
‘They should be kicked out and the whole network should be brought into public ownership.’
Shadow transport secretary Jim McMahon added: ‘This is yet another example of the complete failure of the franchise model, which prioritises private company profits over passengers and service.
‘Labour has long argued that public ownership of the rail network will provide better value for the taxpayer. Ministers have the opportunity to bring all the rail franchises back in house over the next six months.
‘They must acknowledge their previous approach just hasn’t worked.’
It comes after the Government in May unveiled long-awaited reforms of the country’s fragmented railway network, including a new centralised price and reservations system.
By launching a new public body, Great British Railways, whose name has echoes of nationalised British Rail in the previous century, Prime Minister Boris Johnson’s government has already begun to take greater control of the sector.
But it insists that the new route taken is not equivalent to renationalisation of the railways – a sector that continues to be hit hard by the pandemic depressing passenger numbers.
Britain’s rail tracks are already in state hands but the trains are run by mostly private companies enjoying large government subsidies.
And since privatisation of the sector in the mid-1990s, the taxpayer has been forced to take control of financially-struggling franchises.
Should the government eventually hand the running of Southeastern back to a private company, it will meanwhile not be under the franchise system, which was scrapped a year ago for new contracts.
Private rail operators are still paid management fees for running services but now face tougher scrutiny and greater state involvement.
Go-Ahead Group’s chief financial officer Elodie Brian (pictured above) resigned after the decision to take over the franchise was announced
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