High Speed 2 Limited Annual Report and Accounts inquiry
Closed
What the inquiry looked at
“High Speed 2 Ltd (HS2) is a company owned by the Government that is tasked with delivering a high-speed rail link from London to Birmingham, Manchester, and potentially beyond. The National Audit Office (NAO) published its audit of HS2's 2016–17 accounts in July. It found that HS2 was making large redundancy pay-outs totally £2.76 million, of which £1.76 million were not appropriately authorised. The Comptroller and Auditor General (C&AG) subsequently qualified the accounts. As a result of the decision to move its headquarters to Birmingham, HS2 needed to make redundancies, and received written advice from the Department of Transport that these should be at levels comparable to market conditions in the rail sector. HS2 asked DfT to allow enhanced redundancy terms but approval was not granted; however enhanced payments were still made. The NAO has not seen evidence that either DfT or HM Treasury approved these payments. The Public Accounts Committee will ask officials from HS2 Ltd and the Department of Transport about the financial health of HS2 Ltd, about why large redundancy payments were made without the appropriate permissions, and what HS2 Ltd will do to satisfy the C&AG's qualification on their audited accounts.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
During 2016–17 High Speed 2 Limited (HS2 Ltd.) made £1.76 million of unauthorised payments to staff—a shocking waste of taxpayers’ money—through compulsory and voluntary redundancy schemes offered at enhanced terms well in excess of those authorised by the Department for Transport (the Department). There is no means for these sums to be recovered. 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 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.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 19 October 2017 to 5 June 2019.
- Oral evidence 30 Oct 2017
- Report 15 Dec 2017
- Correspondence 3 letters
What it recommended
The committee's recommendations are not listed here yet. Read them in 10th Report - High Speed 2 Annual Report and Accounts ↗ on parliament.uk.
Evidence
Oral evidence sessions 1
- 30 Oct 2017No witnesses recordedparliament.uk ↗