MPs have criticised the government over its “disastrous” handling of the GTR rail franchise, which operates Southern rail services.

Members of the Transport select committee say the government has failed to properly monitor it and needs to consider if the operators are in breach of their contract.

They also warn the way the franchise finances are arranged exposes the taxpayer to risk.

It has emerged the taxpayer will foot the bill for £38 million of lost revenue because of the strike, owing to the franchise arrangement the DfT has with the operator Govia Thameslink Services.

Southern services, including those running from Ashford and Tonbridge, have been blighted by a long-running industrial dispute over staffing on trains.

There was a breakthrough last week when a deal was brokered with one of the unions to end the dispute.

In a report, the MPs say: “The Department has failed to take responsibility for some of the failings in the handling of the Thameslink, Southern and Great Northern franchise.

“All parties are accountable for the disastrous outcomes on this franchise.”

The report says there could be a case for someone else to take over.

“If GTR is officially found to be in breach of its contract, the Department should consider restructuring the franchise and determine who is best placed to operate it.”

Louise Ellman, the transport select committee chair, said the current crisis on Southern underlined the failings of the DfT.

“They should hold the train operating companies to account.

“Unless that happens the taxpayer will be footing the bill and passengers will suffer.” The taxpayer will pick up the bill for £38m of lost revenue through the strike, rather than the operator Southern.

That is because the management contract for this franchise, where the DfT receives fares income and the operator receives a fee for running services.

A DfT statement said: “We are determined to improve our railways and give passengers the services they deserve, and are investing over £40bn to deliver the faster and more comfortable trains that passengers have told us they want.

“Franchising has brought major investment to our railways and helped to create one of the safest and fastest growing networks in Europe.

“But we can make improvements and the Transport Secretary has been clear that it will take new ways of working, more investment and better collaboration across the industry to tackle the challenges ahead.”