Go-Ahead shares plummet after company hid £25m of taxpayer funding
Go-Ahead group shares fell by 24.93 per cent after it was revealed that the Southeastern train operator had hidden taxpayer funding from the Treasury.
The government has announced it will take control of the Southeastern rail contract after the transport company admitted financial errors and repaid £25m of historic taxpayer funding which should have been returned. Yesterday Go-Ahead’s share price stood at 769.5p, down by 255.5p compared to the previous close.
Commenting on the case Transport Secretary Grant Shapps, said “when trust is broken, we will act decisively.”
“The decision to take control of services makes unequivocally clear that we will not accept anything less from the private sector than a total commitment to their passengers and absolute transparency with taxpayer support,” Shapps said.
An investigation conducted by the Department for Transport has identified evidence that since October 2014 the London and Southeastern railway operator had not declared millions of pounds worth of taxpayer funding.
A total of £25m has been recovered and the government will consider further options for enforcement action, including statutory financial penalties.
The running of the London and Southeastern railway, which connects London with busy commuter areas in Kent and East Sussex, will be transferred to the government’s in-house Operator of Last Resort which will ensure passengers see no interruption to services.
The government said that the railway operator had breached its “good faith obligation,” and that taking control of the railways was in the best interests of taxpayers.
Fares are not expected to rise as a result of government ownership and the contract will be provided to another private sector operator in the future.
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