3 November 2021
RMT Press Office:
Investigation into Southeastern financial debacle is ‘fatally compromised farce’ says RMT.
RMT, the UK’s leading specialist transport union, has slammed the Department for Transport’s ‘independent’ review into financial ‘bad faith’ on Southeastern railways, describing it as a ‘fatally compromised farce’ in which the public could have no confidence.
The union has called on the Public Accounts Committee to examine the actions of the DfT and reiterated its demand that the government cancel its tendering process for the Thameslink, Southern and Great Northern franchise, currently held by the same company that ran Southeastern, and run it in public ownership through the Operator of Last Resort.
The union’s call followed a letter from Secretary of State Grant Shapps to correspondence from General Secretary Mick Lynch which posed a series of questions about the Department’s handling of the Southeastern debacle. Mr Shapps’s letter confirms that:
• The supposedly ‘independent’ review into Southeastern’s wrongdoing, including into whether any further money is due to be repaid to the British taxpayer, is being led by the chairs of the companies involved, people who are employees and in the case of Go-Ahead, shareholders, of the companies responsible;
• That the Department for Transport is not conducting its own review but will only examine evidence given to them by the company’s review;
• That the results of the review will inform the decision as to whether Govia will be allowed to continue running the Thameslink, Southern and Great Northern franchise;
• The letter also raises more questions about how much the DfT knew about financial irregularities at the time it awarded Southeastern a government bailout in March 2020. LSER made a £7.9 million profit out of the 6-month EMA.
RMT General Secretary Mick Lynch said:
“This review is a fatally compromised farce. The government has accused this company of breaching financial good faith to the tune of at least £25 million, stripped it of its franchise and admitted that there may be more to uncover, so these people have form, yet unbelievably, it’s quite content to let them effectively investigate themselves.
“To make matters worse, these groups have a material interest in clearing themselves to make sure they keep their last franchise. This is totally irresponsible and either means the government doesn’t want anything else to come out or that they’ve got no confidence that their officials could uncover the truth even if they tried.
“I’m calling on the Public Accounts Committee to question the government as a matter of urgency and I’m reiterating my demand that the government takes the Thameslink, Southern and Great Northern franchise into public ownership now.”
Notes to editors
• Mr Shapps’s letter can be read in full here: https://bit.ly/3CQxhEU
• Mick Lynch’s original letter can be read here: https://bit.ly/3BDAw1a
• The Chairs of the owning Groups are Clare Hollingsworth from Go-Ahead Group and Marie-Ange Debon from Keolis. Both are paid officers of their companies and in the case of Clare Hollingsworth, have holdings of shares.
• The DfT awarded an Emergency Measures Agreement to Southeastern on 31 March 2020, on the same day that it filed a formal dispute with Go-Ahead over its profit reporting. In his letter, Mr Shapps insists that the ‘most material issues’ were hidden in LSER’s accounts at that time and were not known to the DfT. Yet a dispute over profit-sharing which the company estimated could make them liable for around £8 million was lodged on the same day as the EMA was signed which allowed them to make a £7.9 million profit over 6 months.
• RMT’s report into financial irregularities at LSER can be read here: https://www.rmt.org.uk/news/publications/rmt-policy-briefing-fit-and-proper-people29921/