HS2 accounts qualified following enhanced redundancy payouts

19 Jul 17

HS2 Ltd ignored orders from the Department for Transport and wasted £1.76m of public money on an excessively generous redundancy scheme, auditors have found.

Auditor general Sir Amyas Morse has qualified HS2’s accounts as a result.

HS2 in March 2016 sought government permission for a redundancy scheme, partly due to its headquarters move to Birmingham.

The DfT said redundancy terms should be at statutory levels, and refused a further request to enhance HS2’s redundancy terms to civil service levels.

Morse said the National Audit Office had seen no evidence that the DfT instruction was passed on within the company, and no retrospective approval was given for the enhanced terms that HS2 offered.

The NAO found HS2 made redundancy commitments of £2.76m, of which an estimated £1.76m comprised unapproved enhancements.

Its report said HS2’s actions showed: “An example of ineffective communication both between the company and the department, and within the company.

“Whilst deriving from a single redundancy scheme, these findings highlight the need for improvements in the company’s general control environment, where the company has itself acknowledged areas of weakness.”

In HS2’s annual report and accounts, published on 19 July, the company noted: “We take our accountability for the money we spend very seriously, with affordability and value for money fundamental principles of what guides the organisation.

“Following the significant issues around our redundancy programme highlighted by the NAO, further enhancements in HR controls and processes will be made to drive the necessary improvements in HR to eliminate errors and ensure that appropriate approvals are sought when required.”

Elsewhere in the report, HS2’s non-executive chair Sir David Higgins said: “We will also continue to learn the lessons when we get it wrong, as we did over our failure to get the appropriate approvals for our redundancy programme.”

HS2 is responsible for building the new high speed rail line from London to the midlands and north, for which detailed routes between Birmingham and the legs to Manchester and Leeds were announced this week by transport secretary Chris Grayling.

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