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Mon May 17 2021

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MPs lambast HS2's lack of financial control

15 Dec 17 The House of Commons public accounts committee has slammed the ability of the HS2 team to manage the finances of the £55bn project.

The MPs call for HS2’s former chief executive Simon Kirby to be ‘called to account’.

The public accounts committee (PAC) report on the HS2 inflated redundancy payments scandal says that the £1.76m of unauthorised payments to staff was a ‘shocking waste of taxpayers' money’.

In 2016, HS2 Ltd’s management decided to relocate staff from its London office to Birmingham, and chose to run a redundancy scheme for staff who would no longer be needed or who were unwilling to move.

In April 2016 David Prout, the then-director general High Speed 2 Group within the Department for Transport, told Simon Kirby, HS2 chief executive at the time, that it was only allowed to offer statutory redundancy terms.

However, Mr Kirby left the organisation without passing on this instruction to his colleagues, who then decided to offer staff enhanced redundancy terms. They claimed ignorance of the DfT directive.

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A National Audit Office report into the affair in July 2017 found that HS2 Ltd committed to paying a total of £2.76m in redundancy payments to 94 individuals. In comparison, statutory redundancy terms would have resulted in payments to the same individuals worth a total of only £1m.

The Comptroller & Auditor General issued a qualified audit opinion on the company’s accounts in July 2017 as £1.76m of the redundancy payments were unauthorised.

The summary of the PAC report reads: “The unauthorised schemes were able to proceed because weak internal processes at HS2 Ltd prevented key decision-making and scrutiny bodies from receiving accurate information. HS2 Ltd lacks basic financial controls in other important areas, heightening the risk of fraud and financial errors such as duplicate payments. This situation is exacerbated by an excessively high rate of staff turnover.

“Both the Department [of Transport] and HS2 Ltd need to address these issues as a matter of urgency to ensure that this flagship infrastructure project is delivered successfully and that the company meets the high standards expected of it. We remain concerned that the relationship between the Department and HS2 Ltd was not robust enough to prevent this and that ultimately Simon Kirby, the then-chief executive of HS2 Ltd, has not been held to account for his actions.”

Mr Kirby, who now works at Rolls Royce, issued a statement denying any wrongdoing. "I did not approve the payments at issue and deny any allegation of wrongdoing. I left HS2 in December last year and the decision to make senior managers redundant, and under what terms, was not made until after I left," he said.

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