Southeastern have been taken over by the government after a serious £25 million breach.
Kent’s largest rail company failed to declare more than £25 million of taxpayer money over a seven year period, a government investigation has revealed.
This means that the Department for Transport will now step in to control the day-to-day running of Southeastern, and the government have confirmed that Southeastern’s contract will not be extended.
The major rail provider runs services across Kent, but the government insist there will be no changes to ticket prices or timetables for people in Kent.
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The government will take over running services on Southeastern 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 has not declared over £25 million of historic taxpayer funding which should have been returned.
Money 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.
A government spokesperson said: “On the basis of the available evidence, we consider this to be a significant breach of the good faith obligation within the franchise agreement and will not be extending a further contract to LSER.
“The government believes it is essential that there is public trust in operators, who should prioritise the very best for passengers. Given the government’s commitment to protecting taxpayers’ interests, this decision makes clear we will hold private sector operators to the highest standards, and take swift, effective and meaningful action against those who fall short.
Transport Secretary Grant Shapps, said: “There is clear, compelling and serious evidence that for years, 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.”
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. The organisation is run by experienced railway managers, who already own and oversee London North Eastern Railway and Northern.
Today’s decision will also have no impact upon the frontline staff of LSER.
The Transport Secretary has tasked the leadership of the OLR to focus on the delivery of punctual and reliable services, on an affordable and sustainable railway, by rapidly progressing the reforms established by the Williams-Shapps Plan for Rail.
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