Following on from their investigation into HS2 Ltd’s accounts, the Public Accounts Committee have called unauthorised payments to staff “a shocking waste of taxpayers’ money” and said the weak financial controls within HS2 Ltd “creates serious risks of fraud, corruption and error”.
In the report, the MPs point out that Simon Kirby was specifically told by the Department for Transport that HS2 Ltd were not allowed to pay enhanced redundancy payments “but apparently chose not to communicate this to anyone else within the company”. They say that HS2 Ltd and the DfT “should carefully consider whether any further action can now be taken against” Kirby.
More shockingly, the MPs say there is a “serious risk of fraud, corruption and error”, due to a combination of poor financial controls and other systems. The MPs rightly point out that HS2 Ltd was set up 8 years ago with substantial government backing and yet still shows a lack of organisational maturity. Given the vast budget and spending of HS2 Ltd, this is truly concerning.
HS2 Ltd blame this on the staggering turnover of staff which has fallen to a mere 18%: the industry average is 8 – 12%. In fact, of the 1,500 staff, only 280 people have been there more than three years. This is of itself a concern, especially to many of our supporters who are trying to negotiate with HS2 Ltd for compensation.
Another factor which came up in the report is the poor control risk to the program itself. The DfT now claims to be “80% confident that phase 1 (the rail link between London and Birmingham) would open in December 2026”, but neither the DfT or HS2 Ltd could say what the top three risks to the project were. Community engagement was suggested in the oral evidence session as one risk, but there was no hint of an overall sense of the actual or potential problems.
This may be due to another concern highlighted in the report of the many examples of inaccurate information being circulated both within HS2 Ltd and between HS2 and other parts of government, such as deliberately altered information given by HS2 staff ro the National Audit Office investigation into HS2 Ltd.
We have more details of the redundancy payments from earlier this year see here, here and here.