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The UK government will from next month take over all services on London and Southeastern railways after an investigation identified “serious breaches” of the group’s franchise agreement.
The government will run the services from October 17, transport secretary Grant Shapps said on Tuesday, after the probe found that the rail group had not declared more than £25m in taxpayer funding that should have been returned since October 2014.
“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,” Schapps said in a statement.
“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,” Shapps said.
LSER’s owners, the Go-Ahead Group, have said that the funds have been repaid and that it is conducting an internal investigation. The group’s annual results, which were due on Thursday, have been postponed, and its chief financial officer Elodie Brian resigned on Tuesday with immediate effect.
Control of operations will be transferred to the government’s Operator of Last Resort within weeks. Officials have said there should be no impact on passenger service or on LSER’s frontline staff. The government operator oversees the London North Eastern Railway and Northern rail services, taking control of the latter in 2020.
“We recognise that mistakes have been made and we sincerely apologise to the Department for Transport. We are working constructively with [them] towards a settlement of this matter,” Go-Ahead group chair Claire Hollingsworth said in a statement.