DfT stays silent on SWR strike payout


The RMT union has accused the Government of operating behind a cloak of secrecy over the potential for millions of pounds of taxpayers’ money to be used to prop up the struggling South Western Railway (SWR) franchise.

SWR is in a long-running dispute with the RMT over the issue of the retention of guards on trains, which most recently saw a five-day strike in June.


In its preliminary accounts, published in May, SWR’s major shareholder FirstGroup booked a loss of £102m as its share of future losses on the franchise, which was ‘due to a number of uncertainties’. These included ‘the level of strike amelioration recoverable from the DfT, and we remain in negotiations with them’.

It added ‘progress has been made and we continue to be engaged in discussions with the DfT to agree potential commercial and contractual remedies’.

However it went on to declare the franchise an ‘onerous contract’ meaning that it is expected to cost more to run than will be received in revenue.

The SWR franchise agreement states that: ‘The Secretary of State, in his discretion, may at any time decide to reimburse or ameliorate net losses of the Franchisee arising from Industrial Action….’

Last month Kate Hoey, MP for Vauxhall, asked ministers a number of parliamentary questions about the issue including what payments have been made to reimburse SWR for revenues lost as a result of official industrial action, and what estimate officials had made of SWR’s revenue and other losses.

In each case, transport secretary Grant Shapps claimed that: ‘This information is subject to commercial confidentiality between the parties.’

The RMT has previously raised concern that such payments may be prolonging the dispute by removing any incentive for SWR to negotiate. It estimated such payments at £26m by the end of last year.

A spokesman told Transport Network that the union did not know what, if anything had been agreed. He said: ‘The whole thing is shrouded in a cloak of secrecy. We won’t know anything until it’s been thoroughly digested and repackaged.’

Regarding the firm’s claims of financial difficulty, which have led to it seeking to renegotiate the franchise, the spokesperson said: ‘You don’t walk up to the till at Tesco’s and say you can’t afford to pay.’

A spokesperson for SWR declined to add to the information in the FirstGroup preliminary results, but said: ‘The strikes are completely unnecessary as no jobs are at risk and we have offered a guarantee of a guard on every train as part of a framework to resolve this dispute. In fact, our plans over the course of the franchise mean we will continue to recruit and employ more guards, not fewer.’

Transport Network asked the Department for Transport (DfT) on what grounds it was considering paying compensation.

A DfT spokesperson said that all franchise agreements contain a clause similar to the one in the SWR agreement, adding: ‘Any information provided under this clause is subject to commercial confidentiality.’

The spokesperson did not explain why commercial confidentiality applied.


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