The Department for Transport (DfT) has announced that it will take over running services currently operated by Southeastern from 17 October 2021. The Government stated this was “after a serious breach of the franchise agreement’s ‘good faith’ obligation in relation to financial matters was identified”.
Transport Secretary Grant Shapps revealed that an investigation conducted by the Department for Transport had identified evidence that, since October 2014, LSER (London & South Eastern Railway – the company that operates Southeastern services) has not declared over £25 million of historic taxpayer funding which should have been returned.
The DfT has now confirmed that, 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 says that it will consider further options for enforcement action, including statutory financial penalties under the Railways Act 1993.
The rollout of Class 707 trains on Southeastern will continue.
The DfT statement continued: “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.
“Passengers can also be reassured that there will be no changes to fares, tickets or services.”
Transport Secretary Grant Shapps stated: “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 choice of date – 17 October 2021 – marked the end of LSER’s current direct-award contract with the DfT. The company had hoped for this to be renewed, but instead operation will pass to the government’s in-house Operator of Last Resort (OLR), run by Robin Gisby, which already owns and oversees London North Eastern Railway and Northern.
A Southeastern spokesman commented: “We can confirm that today the Secretary of State has announced that the operation of all Southeastern services will transfer from London South Eastern Railway to SE Trains Limited on 17 October 2021.
“SE Trains Limited is a wholly owned subsidiary of DfT OLR Holdings Limited (‘DOHL’), the public sector owning group with responsibility for LNER and Northern Trains Limited. It was established by the Department for Transport under Section 30 of the Railways Act 1993 to continue to provide rail services if a franchise comes to an end and is not immediately replaced.
“The decision will have no impact on passengers or the frontline staff of LSER. All Southeastern passengers, and suppliers can expect operations to continue as usual.”
Robin Gisby, chairman of SE Trains, added: “This decision doesn’t affect the day-to-day operations of our train services, and we will continue to work hard to provide passengers with a great experience. I’d like to reassure all passengers that this is very much ‘business as usual’ with no immediate changes. Tickets will remain valid after transfer and new tickets can continue to be purchased in the usual way.
“We’re committed to ensuring a smooth transition for passengers, colleagues and our suppliers to continue to deliver punctual, reliable and safe services.”
The Transport Secretary has tasked the leadership of SE Trains 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.
The government will also continue to deliver tangible improvements across the network, including:
• Completing the roll out of the Class 707 trains onto Metro routes to provide more spacious, comfortable journeys;
• Investing in passenger improvements on the existing fleet of trains;
• Improved security across the network.
The DfT has confirmed that it intends to move the services back into the private sector on a new Passenger Services Contract, allowing private sector investment and innovation to lead the way in delivering a regional railway that works for its passengers.