Strike-hit train company benefits from £100m taxpayer-funded boost

The main train company for Brighton and Hove has been handed a £100 million financial boost by the government.

Govia Thameslink Railway (GTR) included a reference to the extra sum in its newly filed annual report and accounts.

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And as a result the strike-hit train operator, which runs Southern, Thameslink and the Gatwick Express, restated some of the figures in its latest accounts.

The accounts showed an operating profit in the most recent financial year of £4.6 million – down from a restated £5.7 million profit in the previous year.

But a year ago the company announced an operating loss of £15.6 million.

The restated figures for the latest year alone mean that GTR is £21 million better off.

In the “notes to the financial statements” GTR said: “In the financial statements for the year ended (Saturday) 1 July 2017 the company has changed the way in which it accounts for the rail defined benefit pension scheme.”

This affected the “income statement”, GTR said, “reflecting that the long-term contractual responsibility for the rail pension scheme rests with the DfT (Department for Transport).

“The franchisee is only responsible for agreed funding contributions over the period of the franchise.

“The company has revised its accounting policy to now only recognise the group’s resulting share of service costs in its income statement.”

The note said that the revised method for pension accounting had been “announced” in November 2016.

But the original announcement by the Go-Ahead Group, which owns 65 per cent of GTR, appears to have gone unnoticed and unremarked by the unions, media and politicians.

It said that the changes were “in line with emerging industry practice”.

So while GTR has benefited from restated income totalling more than £110 million over the five years to last July, other train operating companies may also have gained.

GTR’s accounts, filed last Tuesday (3 April), indicated a pre-tax profit of £4.91 million from revenue of £1.26 billion. Revenue, also known as turnover, was £1.14 billion in the previous year.

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The company’s annual report said that Govia’s “philosophy of operating its businesses within a devolved framework enables companies to work closely with the communities they serve”.

It said: “The franchise has been structured to facilitate the transformation and modernisation of passenger services, enabling capacity improvements through the government’s Thameslink programme infrastructure project, the introduction of several new fleets of trains and the modernisation of working practices.

“Unfortunately this modernisation agenda has been impacted by the much-publicised industrial action by both the RMT and ASLEF unions.”

The report, which was written before the deal struck with ASLEF, added: “Both unions have publicly declared their intent to resist the further introduction of driver-controlled trains and are resisting any plans on a national level.