Govia slapped with £23.5m penalty over Southeastern scandal
17 March 2022, 08:34
The rail firm was stripped of the franchise in October last year due to the serious breach of its contract.
Rail firm Govia has been handed a £23.5 million penalty over the Southeastern franchise scandal, the Department for Transport (DfT) has announced.
The company – a joint venture between Go-Ahead Group (65%) and Keolis (35%) – deliberately concealed more than £25 million of historic taxpayer funding relating to High Speed 1, which should have been returned.
Its operator, London and South Eastern Railway Limited (LSER), ran Southeastern services from 2006 until it was stripped of the franchise in October last year due to the serious breach of its contract.
🚨I've issued a £23.5m penalty to LSER over the serious breach of trust that meant we did not renew its contract for Southeastern.
We're recovering the money owed and this fine on top sends a clear signal to the industry that we will act to protect taxpayers.
— Rt Hon Grant Shapps MP (@grantshapps) March 17, 2022
Control of services on the network – which stretches across south-east England including London, Kent and East Sussex – was handed to the DfT’s Operator of Last Resort.
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.
“LSER’s behaviour was simply unacceptable and this penalty sends a clear message that the Government, and taxpayers, will not stand for it.”
Work by the DfT uncovered evidence that LSER concealed taxpayer funding between October 2014 and March 2020.
The review also identified similar behaviour during its previous franchise agreement that ran from April 2006 until October 2014.
The £25 million penalty is on top of £64 million the DfT said it is recovering from Govia in relation to the breach of its franchise as well as “other balances identified, adjustments to profit share payments and interest owed”.
A Go-Ahead spokesman said: “We accept this penalty. Since these events came to light, our corporate governance procedures have been enhanced and the group is under new leadership.
“Go-Ahead remains committed to UK rail and we are determined to play a role in making the Williams-Shapps plan for the industry a success.”
Despite losing the Southeastern franchise, Govia continues to operate Govia Thameslink Railway.
This is Britain’s largest railway franchise, consisting of Southern, Thameslink, Great Northern and Gatwick Express services.
Rail, Maritime and Transport union (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.”
