Earlier this year, the National Audit Office uncovered a number of unauthorised redundancy payments made by HS2 Ltd to their staff. This prompted the Public Accounts Committee to set up an inquiry, with a closing date for submissions of yesterday (Tuesday). We submitted to it, and will be watching the oral evidence session next Monday 30th October (its scheduled for 5pm).
And then, after the inquiry deadline had passed, the departure of Steve Allen, HS2 Ltd’s Chief Financial Officer, was announced.
For those who think there is a rotten small about the whole thing, with the CFO’s departure timed to take the blame, HS2 Ltd would like to reassure you.
The current Chief Executive, Mark Thurston, described it as an “honourable decision” – which does rather make one wonder what plum role will Steve Allen find himself in next?
The issue being looked into payoffs to staff at HS2 Ltd. HS2 Ltd don’t have to keep to civil service pay scales, allowing them to pay vastly inflated salaries to their staff, even though they are owned by the Secretary of State for Transport. In return for exceptionally generous salaries paid by the taxpayer, any redundancies that are above statutory minimum have to be agreed by both the Department for Transport and the Treasury.
In March 2016, HS2 Ltd asked for a generous relocation and redundancy package for staff moving from London to Birmingham: the Department for Transport’s response made it clear that only statutory redundancy was available. In April 2016, HS2 Ltd again asked for a more generous redundancy package inline with the pre-existing Civil Service Compensation Scheme, along with a delayed departure time for the staff: a new Civil Service Compensation Scheme was being consulted on at the time. An emailed reply from the Department for Transport again turned down the request.
According to Amyas C E Morse, the Auditor General who produced the NAO report, this second refusal was not passed on within HS2 Ltd. What’s more even though the staff left after a revised Civil Service scheme came into operation before the staff actually left, the redundancy terms from HS2 Ltd were more generous than both the original and the replacement Civil Service scheme, meaning staff were paid over £1.7 million more than they were supposed to get.
Of course, Steve Allen doesn’t quite take any blame himself for not knowing that his staff were not breeching the instructions, preferring to dump blame on the team who worked for him:
“The weaknesses highlighted by the NAO report resulted in both the HS2 Executive and Board being misinformed about the status of critical approvals for redundancies. Those assurances were given by teams for which I was responsible and, obviously, I regret that.”
It will be interesting to see what the Public Accounts Committee make of it when he appears in front of them next week.