Commons Committee savages HS2 redundancy practices

The House of Commons Public Accounts Committee says HS2 Ltd ran unauthorised redundancy schemes which cost taxpayers £1.76 million.

In its report into HS2’s annual report and accounts, published on December 15, PAC also said: “There appears to be a culture within HS2 Ltd of failing to provide full and accurate information to those responsible for holding it to account.”

HS2 Ltd ran compulsory and voluntary redundancy schemes in 2016-17, despite the framework which governs the company stating that it is only allowed to offer statutory redundancy terms.

A request to the Department for Transport to offer staff enhanced redundancy packages was refused, but the PAC says HS2 Ltd ran the enhanced schemes anyway, committing to payments of £916,000 to 67 individuals under the compulsory scheme, and £1.84m to 27 individuals under the voluntary scheme. HS2 Ltd committed to paying £2.76m, compared with the £1m it would have paid as part of statutory redundancy.

“This means that £1.76m of taxpayers’ money was spent in contravention of the rules governing HS2 Ltd’s finances,” the report says.

Former HS2 Chief Executive Simon Kirby was criticised, with the PAC saying: “Simon Kirby had been specifically instructed by the Department [for Transport] that enhanced redundancy terms were not acceptable but apparently chose not to communicate this to anyone within the company.”

The report also concluded that HS2 Ltd “does not have in place the basic controls needed to protect public money”, and that HS2 Ltd and the DfT “still do not appear to understand the risks to the successful delivery of the programme, which is currently forecast to exceed the funding available by £1.8 billion”.

It recommends that HS2 Ltd should write to the PAC by the end of January 2018, outlining how it will ensure that all staff recognise that they are dealing with taxpayers’ money and that they are required to comply with the specific rules and regulations governing its use. It wants HS2 Ltd to ensure that proposals to operate outside the agreed framework document are reported to both the HS2 board and DfT.

When a departure has been requested from normal governance rules, the PAC says the chief executive should confirm in writing that the departure complies with the responsibility for safeguarding public funds, and report this to the relevant board committee and to the main board as an authorised departure from normal governance rules.