HS2 finance boss to leave following outcry over redundancy overpayments

High Speed 2’s (HS2) chief financial officer Steve Allen is set to leave the company at the end of the financial year.

The announcement of his departure follows a critical report from the National Audit Office (NAO) into HS2’s handling of redundancy payments to staff. On October 11, the Government Internal Audit Agency and Department for Transport (DfT) sent a management letter commissioned by the DfT Permanent Secretary following the National Audit Office’s Comptroller and Auditor General’s verdict that committed expenditure on redundancies of £2.76m was £1.76m more than the statutory levels of redundancy HS2 was authorised to pay staff.

The primary cause of this, according to the management letter, was an enhanced redundancy package which was prohibited by HS2’s Framework Document. The letter adds: “HS2 Ltd did this even after the Department had instructed it not to. A senior official at HS2 Ltd acknowledged this instruction, yet the enhanced scheme proceeded.”

Among the contributory causes identified were that governance bodies at HS2 were “not sufficiently briefed, knowledgeable or effective enough to identify that an irregular scheme was being introduced.” Further causes included the fact that the Framework Document between HS2 and the DfT was “not well understood”, and that there were high levels of staff turnover and insufficient operational controls at HS2.

Commenting on his departure, Steve Allen said: “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.

“So, whilst we are now putting in place the measures to strengthen financial governance systems and to provide robust financial stewardship for the company, I believe it will be appropriate for me to move on.”

HS2 Chief Executive Mark Thurston said Allen had been “absolutely critical” in identifying ways to rectify issues identified in the NAO’s report and DfT management letter, describing his decision to leave the company as “honourable.”

Nine recommendations were made in the management letter, including ensuring that better records are kept, encouraging a “greater consciousness within the company of the need to work within the letter and spirit of documents like Managing Public Money.”