Latest Rail News

18.12.17

Consider legal action over HS2 redundancies, MPs say

MPs have called for consideration of legal action over excessive HS2 redundancy payouts.

The Public Accounts Committee has criticised the £1.76m of unauthorised payments made during 2016-17 as a “shocking waste of taxpayers’ money.”

In the committee’s HS2 Annual Report and Accounts, it said that the unauthorised schemes were able to proceed due to weak internal processes at HS2 Ltd, which “prevented key decision-making and scrutiny bodies from receiving accurate information.”

It also claimed that HS2 Ltd lacks basic financial controls in other important areas, which it argued increases the risk of fraud and financial errors such as duplicate payments.

The committee said that these issues were then exacerbated by an “excessively high rate of staff turnover.”

In the report, MPs claimed that the then-CEO, Simon Kirkby, chose to run the redundancy scheme despite the then-director general, David Prout, telling him that the company could only offer statutory redundancy terms.

Under the terms of the redundancy scheme 94 individuals received payments totalling £2.76m, whereas under the statutory scheme for these payments would have totalled just £1m.

The committee said that it is concerned that HS2 appears to have a culture of “failing to provide full and accurate information to those responsible for holding it to account.”

The then-HR director, Peter Gregory, reportedly briefed the HS2 Board and the executive committee, telling them that the redundancy scheme had been approved by the department, which the committee argues was factually incorrect.

Additionally, an internal audit found that a presentation on the redundancy scheme from February 2016 had been altered to make it appear to the National Audit Office (NAO) that the enhanced terms had been raised with the department then.

HS2’s internal review is underway, and it has reported that its preliminary findings suggest the work of “a rogue individual” attempting to cover up a mistake.

As part of its own investigation, the committee said that Simon Kirby “had been specifically instructed by the department that enhanced redundancy terms were not acceptable but apparently chose not to communicate this to anyone else within the company.”

“Even though the former chief executive no longer has a contractual relationship with either the company or department, they both should carefully consider whether any further action can now be taken against that individual,” it continued.

“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.”

An HS2 spokesperson said that the new chief executive, Mark Thurston, told the committee that HS2 takes its responsibility for spending taxpayers’ money “very seriously.”

“The NAO report is clear that we did not have the approvals we needed to proceed with these redundancy payments and, therefore, that was a serious error. We are now implementing all of the NAO’s recommendations in full and Mark and the HS2 Executive team will ensure this doesn’t happen again,” they added.

“HS2 is on track and has achieved a lot in its short lifespan. It has been able to do so because of our ability to have the right people in the right jobs at the right time.

“But while that was the reason for these payments it is clear that we got the process wrong and we are now putting the right systems in place to make sure that does not happen again.”

Have you got a story to tell? Would you like to become an RTM columnist? If so, click here.

Comments

Lutz   18/12/2017 at 18:31

HS2 would benefit from a thorough review by the Parliamentary Select Committee for Transport, not just with regard to the unauthorised payments.

Andrew Gwilt   18/12/2017 at 22:12

Lutz is spot on.

DP   19/12/2017 at 07:57

Am I stupid to ask why HS2 is making people redundant in the first place? Or if all these people are surplus to requirements before a metre of track has even been laid, why they were employed in the first place?

Noam   19/12/2017 at 10:12

It may surprise you to learn, DM, that a £50bn+ project requires a fair bit of planning, financing and developing business cases. HS2 had a large office of people in Canary Wharf doing just that. Now that the construction phase is due to begin, these people are no longer required and focus will shift instead to engineering, setting up and running training colleges in places like Birmingham and Doncaster. If you fancy your chances persuading Docklands-based finance analysts to be redeployed as electrification engineers in Doncaster then why don't you offer your services to the company? Otherwise I'm not sure what your objection is. I do agree paying terms almost three times statutory to people who will walk into high-paying jobs elsewhere is excessive.

Mark Hare   19/12/2017 at 12:36

RTM - The guy's name is Simon KIRBY, not Kirkby.

John Grant   19/12/2017 at 14:52

@Noam: The question is, why did HS2 not know they would only be required for a limited time. Or if it did, why were they not on fixed-term contracts? Though I suppose if they were the ones doing the planning maybe they were the only ones that could work out how long they'd be needed for. And couldn't do that until after they'd been hired.

Jerry Alderson   19/12/2017 at 17:53

The article says "under the statutory scheme for these payments would have totalled just £1m." Does it really mean "statutory" or does it mean "contractual"? It's 11 years since I was last an employee of a company that I didn't run so I may be out of date, but at the time *statutory* was one week per full year ***capped at around £300 per week***. So, 500 people with six years' employment = £1m (i.e. 500 x 6 x £300 = £900k). Ps. The place Kirkby (Lancs) is pronounced Kirby so I can understand how RTM got it wrong.

Add your comment

 

related

rail technology magazine tv

more videos >

latest rail news

Northern leaders warn Treasury against scrapping under-fire HS2

23/05/2019Northern leaders warn Treasury against scrapping under-fire HS2

Scrapping HS2 would be a “disaster” and would undermine Britain’s “national prosperity for decades to come,” more t... more >
Network Rail unveils new regional managing directors

23/05/2019Network Rail unveils new regional managing directors

Network Rail has announced five new regional managing directors as part of its “evolution” towards a more passenger-focused approach.... more >
£800m worth of rail haulage contracts awarded by Network Rail

22/05/2019£800m worth of rail haulage contracts awarded by Network Rail

Network Rail has awarded contracts for rail haulage and the operations of its engineering trains and seasonal treatment services for Control Peri... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

rail industry focus

View all News

interviews

Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >
TfN Strategic Transport Plan: not just for transport's sake

22/01/2019TfN Strategic Transport Plan: not just for transport's sake

Peter Molyneux, Transport for the North’s (TfN’s) strategic roads director, has been leading on the development of the seven economic... more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. ... more > more last word articles >

'the sleepers' daily blog

Meeting clients, suppliers and stepping forward

23/05/2019Meeting clients, suppliers and stepping forward

The Midlands 30-year plan will deliver many economic benefits and will need a wide and diverse supply chain to deliver some of the key projects. ... more >
read more blog posts from 'the sleeper' >

comment

The railway franchising model is broken, and passengers are paying the price

13/05/2019The railway franchising model is broken, and passengers are paying the price

Meg Hillier, MP for Hackney South and Shoreditch and chair of the Public Accounts Committee (PAC), gives her view on the state of the UK’s ... more >
NSAR: Tackling the digital skills shortage

13/05/2019NSAR: Tackling the digital skills shortage

The National Skills Academy for Rail (NSAR) chief executive Neil Robertson returns to write for RTM, this time, to assess the digital skills shor... more >
Delivering cost-effective electrification

13/05/2019Delivering cost-effective electrification

David Clarke, technical director of the Railway Industry Association (RIA), sets out the findings of a new report on how rail electrification can... more >
5G: An opportunity to revolutionise on-train connectivity

13/05/20195G: An opportunity to revolutionise on-train connectivity

Simon Holmes, group head of digital (engineering) at FirstGroup, introduces us to the 5G solution being delivered for the rail sector.  ... more >