CEO rejects bonus and pay rise as Southern sees 27% increase in profits
David Brown, the CEO of Go-Ahead, the company that owns Southern rail operator Govia, has turned down his annual pay rise and bonus due to the ongoing travel disruption faced by commuters using the franchise. Last year, Brown received a package of £2.2m. The company today reported profits of almost £100m, an increase of 27%, leading to criticism from unions and politicians. The results were released a day after the UK government pledged £20m to improve services provided by Southern. Brown stated that Network Rail would be custodians of the money, which would be invested in infrastructure.

The chief executive of Go-Ahead, which owns Southern rail operator Govia Thameslink Railway (GTR), has waived his bonus as the company reported profits of nearly £100m, despite widespread problems at Britain’s busiest commuter franchise.

David Brown apologised to passengers following a summer of travel misery. He said he took the decision in June to turn down his annual bonus and pay rise. “It just felt like the right thing to do,” he said, adding: “It’s not just about us, it’s largely about the infrastructure.”

Brown is set to get paid about 40% less than last year, when his pay packet amounted to nearly £2.2m. The company has also introduced passenger satisfaction measures in its annual bonus plan.

Go-Ahead’s 27% increase in profits infuriated unions and opposition parties. The RMT union said the company was a “money-raking disaster”.

Jenny Randerson, the Liberal Democrat transport spokeswoman, said Southern was “taking the public for a ride while passengers are left fuming on platforms … When will ministers stand up to Southern and take away its franchise? This is a scandal.”

The shadow transport secretary, Andy McDonald, concurred. “Over the past year Southern has established itself as the standard bearer for dysfunctional privatised rail services. Passengers are enduring the worst delays in the country, fares are up 25%, and public investment to improve Southern services seems a long way off.”

Commuters have suffered months of travel chaos amid the company’s bitter disputes with unions and staff shortages. Southern introduced an emergency timetable in July and blamed “unprecedented” levels of staff sickness, but will on Monday restore more than one-third of the 341 daily services previously cut. Brown said the goal was to have all services back by the end of October.

Statutory profits before tax at Go-Ahead rose to £99.8m in the year to 2 July, with revenues up by 4.5% to £3.4bn. The company’s main bus division had a record year, while Southern’s operating company, GTR, made a single-figure million loss and will remain in the red this year and next.

Brown said the group was subsidising the GTR franchise, adding: “There is no profit at the expense of Southern commuters at this moment in time.”

But Aslef, the train drivers’ union, asked whether Brown and the other board directors should be handing back their salaries after another year of failure.

Mick Whelan, the Aslef general secretary, said: “This is like living with Alice in Wonderland. A company which has failed to deliver for passengers every day for the last year – and which only yesterday got its snout back in the public trough with another generous pile of taxpayers’ cash, courtesy of a compliant DfT [Department for Transport] – has just announced record profits for its shareholders.”

The results came a day after the government announced a £20m fund and a new review board to improve Southern’s services and restore confidence in the franchise. Govia is a joint venture between Go-Ahead, which owns 65%, and France’s Keolis, which owns 35%.

Brown said: “A large part of the role of the GTR franchise is to introduce three new train fleets and modernise working practices. During this period of change, Southern services have been disrupted by restricted network capacity, strike action and increased levels of absence. We apologise to the people whose lives have been affected during this time.”

The company was working closely with the DfT, Network Rail and others to get services back on track, he said.

However, there will be more disruption if a 48-hour walkout by guards goes ahead on Wednesday and Thursday. A strike by RMT station staff over the station modernisation programme has been called off and Aslef suspended a ballot for strike action, which could have coincided with the RMT strikes.

Brown rejected criticism from RMT that the government had “propped up Southern with yet another £20m of taxpayers cash,” while the company could fund improvements itself.

“This is not subsidising a private company,” Brown said, adding that the £20m would go into infrastructure and Network Rail would be the custodian.

Govia has been at loggerheads with unions over the use of more driver-only trains and the role of guards. Brown said staff sickness levels had quadrupled at the time of the first dispute in April.



The independent Rail Safety and Standards Board found that the new breed of driver-only trains with CCTV could improve safety, rather than reduce it, as claimed by the unions, the Go-Ahead boss said. He said the company had been careful in introducing changes and new technology, there would be no job losses and pay and conditions were guaranteed.

The use of driver-only trains is becoming standard and the role of guards will become non-existent in the future, he said. Forty per cent of Southern trains are driver only, with drivers relying on CCTV rather than guards before shutting the doors.

But the RMT general secretary, Mick Cash, said: “Just a fraction of these 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. It is shameful that they have opted to hoard cash instead of protecting the travelling public.”

Brown said the £6.5bn Thameslink programme, which comes after 40% passenger growth on Southern over the past five years, would deliver gradual improvements during the next two years.

GTR’s losses were offset by a strong performance at Southeastern and London Midland. The contribution of Go-Ahead’s rail division to the DfT was £222m last year.

Southern is the UK’s largest rail franchise, covering routes from Sussex, Surrey, Hampshire and Kent into London. It also runs Gatwick Express services. GTR operates the Thameslink and Great Northern rail companies. Its parent company, Govia, runs London Midland and Southeastern and has been shortlisted for the West Midlands franchise.