Southeastern: what went wrong with the train firm and what happens now?

Rail firm joins LNER and Northern as state-owned operator run by the Department for Transport

On track: Southeastern rail services will continue as normal (Southeastern)

One of the UK’s leading commuter rail services has been stripped of its franchise. Southeastern will be taken into public ownership from 17 October.

It is the latest troubled train operator to have been taken over by the government – but in unusual circumstances.

These are the key questions and answers.

Who is Southeastern – and what does it do?

The Southeastern brand is owned by London & South Eastern Railway (LSER), itself part of Govia – a joint venture between the UK-based Go-Ahead Group (owning 65 per cent) and the French company Keolis (35 per cent).

The government says: “It operates one of the busiest networks in the country.” The firm serves more than 180 stations with 12,800 trains per week, and has more than 4,000 staff.

Southeastern trains run on the “classic” lines connecting several London termini – Blackfriars, Charing Cross, London Bridge and Cannon Street – with southeast London, Kent and parts of East Sussex including Hastings on the coast.

In addition it operates the UK’s highest-speed domestic routes, using 140mph “Javelin” trains that connect London St Pancras with Ashford, Canterbury, Margate, Dover and Folkestone.

Prior to the coronavirus pandemic, the firm carried 640,000 passengers every weekday.

Its latest contract from the Department for Transport (DfT) began on 1 April 2020 and runs until 16 October 2021. The franchise agreement was expected to be routinely extended – but instead the government will take over operations.

What went wrong?

Between 2014 and 2019, LSER is thought to have failed to pay over £25m owed to the government.

The transport secretary, Grant Shapps, tweeted: “Investigations have identified a serious breach of good faith by Southeastern.

“To protect taxpayers’ interests and passengers I have ordered the Operator of Last Resort to urgently take over the running of rail services in the South East.”

Who is the “Operator of Last Resort”?

Mr Shapps’ own Department for Transport (DfT) . The operator is a state-owned company with the catchy name of DfT OLR Holdings Ltd (DOHL). The government says: “DOHL maintains the continuity of passenger rail services if a passenger rail franchise terminates and is not immediately replaced.”

Previously it has taken over a series of operators which are financially unable to carry out their franchise agreement – such as Virgin Trains East Coast, now LNER – or where service standards are felt to be unacceptable, as with Northern Rail.

DOHL has set up a subsidiary, SE Trains, to run the service, with the same staff – but different senior management. Passengers should not notice any difference in schedules or fares.

Govia continues to run the UK’s biggest rail franchise in terms of passenger numbers: GTR, which includes Southern. Great Northern and Thameslink.

What has the reaction been?

So far, mostly furious. The general secretary of the RMT union, Mick Lynch, said: “There now needs to be a forensic examination of all the private rail contracts with those caught cooking the books called to account.

“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. “

The Association of British Commuters tweeted: “The alleged fraud by Southeastern goes back to 2014. Nothing less than a full investigation into ALL private rail franchises will now suffice.”

Huw Merriman, the MP for Bexhill & Battle, is a season-ticket holder on Southeastern and chair of the Transport Select Committee. He told BBC Today: “It’s a very serious issue and I am very sorry for all the staff who have given their all on the frontline since the pandemic.

“The government would have had two options here: one, just to accept some resignations; or take decisive action to remove the train operation in its entirety.

“I can understand why the secretary of state and the rail minister have done this. We need confidence in our railways right now.”

Could more rail firms be brought into public ownership?

Yes. The government is setting up what is effectively a successor to British Rail, called Great British Railways (GBR).

The organisation will own and manage rail infrastructure, set most fares and timetables, and sell tickets. While GBR will issue contracts to private firms to run trains, this will be done on an outsourcing basis rather than the current franchising system.