The Public Accounts Committee (PAC) report said in 2016/17, HS2 Ltd issued payments to staff members through compulsory and voluntary redundancy schemes at enhanced terms "well in excess" of those authorised by the Department for Transport
The PAC said there is no means for these sums to be recovered and 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".
In 2016, management at HS2 Ltd decided to relocate staff from its London office to Birmingham, choosing to run a redundancy scheme for staff who would no longer be needed or who were unwilling to move.
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Despite the then-Director General of HS2 within the Department for Transport, David Prout, telling the then-Chief Executive Simon Kirby in April 2016 that it was only allowed to offer statutory redundancy terms, HS2 Ltd offered staff enhanced redundancy terms.
Overall, HS2 Ltd committed to paying £2.76m in redundancy payments to 94 individuals. However, statutory redundancy terms would have resulted in payments to the same individuals worth a total of only £1m.
A qualified audit opinion was issued by the Comptroller & Auditor General in July this year, as £1.76m of the payments were unauthorised.
The Committee said; "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 for Transport 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."
(LM/MH)
