South Eastern rail funding rises to £415m, more than tripling since pre-covid despite rising fares.
The cost to UK taxpayers of funding Southeastern, one of Britain’s biggest rail operators, rose to £415 million in the year to March, according to the companies’ latest filings.
This figure is three times the funding received by the company before the Covid-19 pandemic, despite the increase in fares and passenger numbers.
Southeastern, which serves Kent, East Sussex, and London, has seen a 10% increase in passenger journeys and a 4.7% increase in train services over the past year. However, rising costs have made user demand for help even higher, up from £402 million last year.
The operator was nationalized in October 2021 after its previous owners, Govia (a joint venture between Go-Ahead and France’s Keolis), failed to declare more than £25 million in taxpayer funding from 2014. Even when it is in private hands, in the Southeast. they have received significant funding, including £132 million in the year to June 2019, which means government support for rail operators has quadrupled since before the pandemic.
Passenger numbers remain below pre-pandemic levels. In the year to March, Southeast recorded 128 million passenger journeys, a significant drop from 179 million journeys in the year to March 2019. Despite these low numbers, Southeastern and other rail operators continue to rely heavily on government support to balance their books.
Rail fares in England and Wales are set to rise by 5.9% in 2023, following a 4.9% increase last year. Despite this increase in fares, South East is putting the need for more taxpayer funding on rising operating costs, including the increased cost of access to the High Speed 1 (HS1) line, which South East shares with Eurostar. Southeast also cited significant increases in electricity costs, tracking access costs, and rail leases as contributing factors.
Paul Barlow, finance director at South East, said the company remained “very committed” to reducing the burden on taxpayers, but admitted that rising costs, driven by inflation of more than 10%, were inevitable. Southeastern is one of the few operators facing additional costs arising from operating high-speed services on HS1, and the company is working closely with industry partners to reduce the financial burden on the government.
Southeast has also introduced measures to increase capacity, such as the abolition of first-class fares, freeing up 4 million additional seats per year. However, the continued reliance on public funding highlights the wider challenges facing the UK rail industry as it grapples with rising costs and pandemic recovery efforts.
