Southern Rail Report 'Shameful' £100m Profits Despite Being 'Unable To Run A Functioning Service'

'They have opted to hoard cash instead of protecting the travelling public.'

02/09/2016 08:57 | Updated 02 September 2016

Southern Rail commuters have spoken out in disbelief after the rail operator can report profits of nearly £100 million despite being “unable to run a functioning service”.

Go-Ahead, which owns the rail operator Govia, has confirmed statutory profits before tax increased 27% to £99.8 million in the year to 2 July, with revenues up 4.5% to £3.4 billion. 

Govia Thameslink Railway were on Friday keen to point out that Southern Rail, had not made a profit, rather its parent company, Go-Ahead, had in other areas of its business. 

“Southern made zero profits last year. All our income went into delivering the service. The profits figure being reported relates to other businesses owned by our parent company, primarily the bus division. Southern is not expected to make a profit in the coming year either.”

The RMT slammed the profit report as “shameful” and commuters were aghast at how such profits were possible when the service Southern Rail provides is “such a joke”.

The news also reignited debate around the merit of nationalising the rail service.

Dominic Lipinski/PA Wire
Southern Rail’s owner has reported profits of nearly £100 million

The Guardian quoted David Brown, Go-Ahead’s chief executive, as saying he would forgo his annual bonus and had declined a pay rise.

The company has also introduced passenger satisfaction measures in its annual bonus plan, the newspaper reported. 

The results come a day after the government unveiled a £20m fund and a new review board to improve Southern rail services.

Last month commuters faced days of commuter chaos after talks aimed at resolving a bitter row over the role of conductors broke down, resulting in a 40% reduction in services for several days. 

London Mayor Sadiq Khan said “long suffering commuters across South London will be shocked” at the profit announcement, which he contrasted with both the standard of the rail providers’ service, and the Government’s response to it, which he labelled “wholly inadequate”. 

Khan said the Government “should speed up handing over the commuter lines” to Transport for London (TFL) to “ensure we give commuters the efficient and reliable rail service they deserve, while providing value for money”.

Speaking on LBC, Transport Minister Chris Grayling, dismissed Khan’s suggestion TFL should take over. 

“I don’t believe for a moment that TFL has the skills to run the mainline from Cambridge to Brighton and why should the mayor of London run services between Southampton and Brighton,” he said. 

“Right now this is not about re-organisation. the last thing passengers need is a big re-organisation, they need someone to solve the problem.”

RMT general secretary Mick Cash said it was “shameful that they have opted to hoard cash instead of protecting the travelling public”.

“While Go-Ahead have been driving Britain’s biggest rail franchise into total meltdown the cash has been sloshing through the boardroom at obscene levels. This is reward for total failure on a scale which is off the map,” he said in a statement.

Cash said “just a fraction” of the profits would be enough to keep the guards on Southern trains, keep the passengers safe and resolve the industrial dispute between RMT and the company.

He added that given the company’s profit report today, it could “clearly fund improvements” itself, “if they weren’t wholly dedicated to trousering fare-payers money in shed loads”.

Cash said it was “deeply cynical” that the company brought forward its profit announcement so it “clash” with the strike action by guards next week. 

“They are a money-raking disaster that has turned Britain’s railways into a global laughing stock and they should be slung out and replaced by the public sector option,” he said. 

Writing in the Evening Standard on Thursday, Grayling said that he had made Southern’s issues “my priority” when he took over the job six weeks ago.

Grayling blamed service issues on the union who “are opposed to the continued modernisation of the railways and desperately cling to 1970s working practices”.

“That is mainly why journeys have been disrupted for months. Train guards  have been calling in sick in unprecedented numbers and at short notice as part of what is clearly an organised attempt to disrupt services — and that’s on the days without strikes. Southern’s parent company GTR and the unions need to reach an agreement soon so its passengers can travel on time,” Grayling wrote. 

Following the Southern profit announcement, angry commuters directed their frustrations as Grayling.  

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