Figures published this morning show that Southeastern’s compensation and Delay Repay payments to customers in 2015-16 were £2.270m – an increase of 68% in 2014-15.
But other figures from Network Rail show that Southeastern were paid £18.217m in the same period in compensation for unplanned delays caused by Network Rail infrastructure (approximately 65-70% of all delays).
That means that Southeastern made an overall net surplus of £15.947m on delay compensation. And that’s after Southeastern have used Network Rail money to compensate passengers for delays due to Southeastern.
Why is there such a difference between the amount Southeastern receive and the amount they pay out?
Part of it is due to customers not claiming the compensation to which they are entitled, or having difficulty in doing so. Although Southeastern have made some improvements recently, we still get many reports of legitimate claims being refused at first, and only the most determined passengers can get through the appeals process. Claim forms are not routinely handed out on late trains. On c2c services automatic compensation is being introduced for smartcard season ticket holders; but the smartcard season ticket Southeastern are introducing next month will not have this feature.
However the biggest difference is that Network Rail compensation becomes payable if the train is three or more minutes late , whereas Delay Repay only starts after 30 minutes delay. That’s a big difference on London and Kent routes where journey times are shorter and delays of 10-15 minutes are a chronic problem.
Southeastern’s overall profit for most of the period has not yet been published. But in the year to June 2015 they made a profit of £26.8m. If the same level of profit has been maintained since then, it would mean that at least 60% of Southeastern’s profits depend on delays. Some people might wonder whether this is a good incentive to do better.
There’s a public policy issue too. Now that Network Rail is part of the public sector and receives a large Government grant each year, it is essentially taxpayers money that is funding this compensation. Is it right that because compensation is calculated differently at each stage, most of the money is trousered by Southeastern rather than passed on those members of the public who have actually suffered? If the government policy is to pay compensation to passengers after 15 or 30 minutes, why is it right for the government to pay the private operator anything for shorter delays? Indeed wouldn’t it be better to use limited resources to improve services and reduce delays rather than reward the companies involved for failure?
What do you think? Let us know here.
 See Section 3 of the model Schedule 8 (archive): “any Minutes Delay which arise from a single incident or a series of related incidents and which are less than three minutes in aggregate shall be deemed to be zero“.