North East transport firm Go-Ahead Group has been issued with a £23.5m fine for what the Government has described as an "appalling breach of trust."
It comes as the Department for Transport (DfT) has also ordered the firm to pay back £64m owed to the taxpayer, and identified fraudulent behaviour possibly stretching back as far as 2006.
Go-Ahead previously reported it had already paid £49.2m to the Government, but had anticipated the total amount owed to be £51.3m.
Read more: Go-Ahead previously reported it faced costs of £81.3m relating to the LSER franchise loss
The Government said the fine sends a signal to rail operators that breaches of public trust will not be tolerated.
Transport Secretary Grant Shapps said: "I took decisive action and did not renew the contract with Southeastern following this appalling breach of trust.
"Our rapid and firm action protected taxpayers and passengers – ensuring much-needed services continued to run.
"LSER’s behaviour was simply unacceptable and this penalty sends a clear message that the Government, and taxpayers, will not stand for it."
In September 2021, the Transport Secretary announced that, following the breach of trust, the franchise would not be renewed with LSER and would be run by the Operator of Last Resort (OLR).
A DfT investigation showed that between October 2014 and March 2020, LSER had deliberately concealed more than £25m of historic taxpayer funding relating to HS1, which should have been returned to the taxpayer.
Its review has also identified evidence of similar behaviour by LSER during its previous franchise agreement that ran from April 2006 to October 2014.
Last month Go-Ahead reported it had provisioned up to £30m for the fine. The amount payable to the DfT is expected to be settled from LSER's restricted cash balance.
On February 24, in a call with journalists, interim group chief finance officer Gordon Boyd said the company did not know whether it would be the subject of a Serious Fraud Office investigation.
The RMT union called on the Government to ban Go-Ahead, citing reported negotiations for Go-Ahead to continue running the Govia Thameslink franchise.
RMT general secretary Mick Lynch said: “It is simply beyond belief that with barely a month to go before this mega rail contact expires this government, even with its history of dodgy contracts, could consider awarding it to a company that has repaid £50m in money it hid from the taxpayer and which it believes worked to conceal this fact.
"As I’ve said time after time, Go-Ahead are demonstrably unfit to operate our railways. They can’t be trusted with public money. The publicly owned Operator of Last Resort stands ready to take over the franchise and it is the government’s public duty to nationalise it and put an end to this scandal once and for all.”
