Today, (Wednesday 19th 2017), the Auditor General Amyas Morse will express his concerns with the annual accounts of HS2 Ltd, with specific reference to a redundancy scheme which offered departing staff payments significantly above what had been agreed to by Government.
HS2 Ltd, which in 2015 was revealed to have 46 staff earning more than the Prime Minister and is exempt from the restrictions of the public sector pay cap, made redundancy payments of £2.76m in the last financial year, £1.76m of which compromised of “unapproved enhancements”, which had been expressly forbidden by Transport Secretary Chris Grayling.
Although HS2 Ltd have been continuously taking on staff, the redundancies happened because many staff did not want to leave London when their jobs were relocated to Birmingham, something which goes some way to undermining the claim from HS2 Ltd that the project will ‘rebalance the economy’ away from the capital.
HS2 Ltd got around rules which cap redundancy payments to civil servants at £95,000 by allowing those leaving HS2 Ltd to go on paid ‘gardening leave’, on full pay after they had effectively left the organisation, with some staff receiving as much as £200,000.
When in March 2016 the Department for Transport told HS2 Ltd that all redundancy payouts should be the standard statutory basis of one week’s pay for every year worked, the then Chief Executive Simon Kirby went directly to Chris Grayling in an attempt to get this ruling overturned, but Mr Grayling backed up what the DfT had said, that only statutory payments should be made available. However, it seems HS2 Ltd completely ignored what they had been told by two different levels of their own management, and made the enhanced payments anyway.
According to the National Audit Office “A senior official at the department [for transport] instructed a senior official at HS2 Ltd that no enhancements would be approved” but the NAO has “not seen any evidence that this instruction was passed on within the company.”
This is not the first time the National Audit Office has raised significant concerns about HS2.
- In May 2013, they commented that there was a lack of clarity around the objectives of HS2, the strategic case was underdeveloped, and there was limited evidence supporting the passenger forecasts and the rationale for building HS2 of capacity shortages on existing lines.
- In October 2014, they said a ‘lack of common sense’ and ‘unrealistic analysis’ had led to an overstating of the HS2 business case by 86%.
- In June 2016 they concluded that HS2 had ‘unrealistic timescales’, that £7bn of cuts had to be found to bring it in on budget, and that HS2 had not passed did not pass review point 1 (which it was meant to have had to pass to be allowed to continue) owing to concerns about cost and schedule.
Joe Rukin, Stop HS2 Campaign Manager responded;
“Right from the start HS2 have been running their own gravy train so it’s no surprise that they have acted as a law unto themselves and it is absolutely clear that this is a rogue organisation within government. This shows that the whole project is being run with a blatant disregard for taxpayers’ money and with no probity. At a time when we supposedly have no money for the public sector workers everyone knows we need, this is beyond disgraceful.”
Penny Gaines, chair of Stop HS2 added;
“While the government claim they have no money for ordinary public sector workers, the amount HS2 Ltd decide they are willing to pay former HS2 staff is obscene. The average payment is twice the typical UK salary. HS2 has always been about jobs for the boys, being paid for by the British taxpayer.”