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Go-Ahead Group PLC said on Thursday it received a lower-than-expected fine from the UK government, in relation to its mishandling of its former London & South Eastern Railway Ltd franchise.
The Newcastle, England-based bus and train operator has been issued a £23.5 million fine from the UK government's Department for Transport. This is lower than the £30 million provision allocated in Go-Ahead's accounts published last month for the year that ended July 3, 2021.
Shares in Go-Ahead were up 14% to 704.00 pence each in London on Thursday morning.
The amount will be settled from LSER's restricted cash balance, Go-Ahead said.
DfT did not renew Go-Ahead's franchise agreement in September of last year, with the government stepping in to run operations as the 'operator of last resort'.
This was the result of ‘serious errors’ identified in LSER's dealing with DfT over several years.
‘LSER had deliberately concealed over £25 million of historic taxpayer funding relating to HS1, which should have been returned to the taxpayer,’ DfT said on Thursday.
‘I took decisive action and did not renew the contract with Southeastern following this appalling breach of trust,’ said Transport Secretary Grant Shapps.
DfT said it is recovering £64 million from LSER in relation to the breaches of the franchise agreement, and Thursday's fine is in addition to this amount.
‘LSERs behaviour was simply unacceptable and this penalty sends a clear message that the government, and taxpayers, will not stand for it,’ Shapps continued.
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