The fee to UK taxpayers for subsidising Southeastern, one among Britain’s largest rail operators, has soared to £415 million within the yr to March, based on the most recent company filings.
This determine is greater than thrice the subsidy the corporate obtained earlier than the Covid-19 pandemic, regardless of fare rises and elevated passenger numbers.
Southeastern, which serves Kent, East Sussex, and London, noticed a ten% rise in passenger journeys and a 4.7% enhance in practice providers over the previous yr. But, spiralling prices have pushed the operator’s want for state support even increased, up from £402 million the earlier yr.
The operator was absolutely nationalised in October 2021 after its earlier house owners, Govia (a three way partnership between Go-Forward and France’s Keolis), didn’t declare greater than £25 million in taxpayer funding relationship again to 2014. Even when in non-public fingers, Southeastern obtained important subsidies, together with £132 million within the yr to June 2019, that means authorities assist for the rail operator has quadrupled since earlier than the pandemic.
Passenger numbers stay under pre-pandemic ranges. Within the yr to March, Southeastern recorded 128 million passenger journeys, a notable drop from 179 million journeys within the yr to March 2019. Regardless of these decrease numbers, Southeastern and different practice operators proceed to rely closely on authorities assist to stability their books.
Rail fares in England and Wales rose by 5.9% in 2023, following a 4.9% rise the earlier yr. Regardless of these fare hikes, Southeastern attributes the necessity for extra taxpayer funding to rising operational prices, together with elevated fees for entry to the Excessive Velocity 1 (HS1) line, which Southeastern shares with Eurostar. Southeastern additionally cited important will increase in electrical energy prices, monitor entry fees, and practice leases as contributing components.
Paul Barlow, finance director at Southeastern, acknowledged that the corporate stays “fiercely committed” to lowering the taxpayer burden, however acknowledged that rising prices, pushed by inflation exceeding 10%, have been unavoidable. Southeastern is likely one of the few operators dealing with important extra prices from operating high-speed providers on HS1, and the corporate is actively partaking with business companions to scale back the monetary pressure on the federal government.
Southeastern has additionally launched measures to extend capability, corresponding to scrapping first-class fares, liberating up an extra 4 million standard-class seats every year. Nevertheless, the persevering with reliance on public funds highlights the broader challenges dealing with the UK rail business because it grapples with rising prices and post-pandemic restoration efforts.
