Southeastern loses franchise over “breach of trust”

Train operator Southeastern has lost its franchise after failing to declare more than £25 million of taxpayer funding, according to the Department for Transport.

It is the first time a train operator has been renationalised over a breach of trust, rather than for quality of service or financial performance.

Secretary of State for Transport Grant Shapps said the state-owned Operator of Last Resort would take over the running of rail services in south-east London, Kent and East Sussex from October 17, to protect the public interest.

Elodie Brian, the chief financial officer of Southeastern’s majority owner, Go-Ahead, has resigned with immediate effect after 13 years in the role.

A statement from the DfT said it had found evidence that since October 2014, historical taxpayer funding of £25m, which should have been returned, had not been declared. It described this as a serious breach of the franchise agreement’s “good faith” obligation.

According to newspaper reports, the discrepancy involves payments for using High Speed 1, the line Southeastern shares with Eurostar services to the Channel Tunnel.

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