HS2 chief financial officer steps down from rail group after unapproved redundancy payouts

 
Rebecca Smith
How the £56bn rail project could look when complete
How the £56bn rail project could look when complete (Source: HS2)

HS2's chief financial officer is leaving the company after a National Audit Office report raised questions over unapproved redundancy payouts at the rail group.

In July, a critical report from the NAO found HS2 had proceeded with unapproved redundancy payments, after being forbidden by the Department for Transport.

Read more: Crossrail 2 boss says London can't cope with extra passengers from HS2

Simon Kirby, now chief operating officer at Rolls-Royce, was at the helm when a publicly funded redundancy regime was proposed, with HS2 making commitments of £2.76m. The NAO estimated that £1.76m was not authorised as it related to "unapproved enhancements".

And today, HS2 announced that chief financial officer Steve Allen will leave the company at the end of the financial year.

He said:

The weaknesses highlighted by the NAO report resulted in both the HS2 executive and board being misinformed about the status of critical approvals for redundancies.

Those assurances were given by teams for which I was responsible and, obviously, I regret that.

So, whilst we are now putting in place the measures to strengthen financial governance systems and to provide robust financial stewardship for the company, I believe it will be appropriate for me to move on.

HS2's chief executive Mark Thurston said there were "a number of issues" that needed addressing when he joined the organisation earlier this year, "particularly around our administrative controls and mechanisms on redundancies agreed by the company".

Thurston said Allen had been "absolutely critical" in identifying how to address the issues to make sure they are not repeated, but respected his decision to move on from HS2.

Allen's decision comes ahead of a Public Accounts Committee evidence session next week on HS2's annual report and accounts. Both Allen and Thurston will attend to face questions from MPs about the financial health of HS2, and why large redundancy payments were made without the appropriate permissions.

The first phase of the high-speed rail network, from London to Birmingham and to Manchester and Leeds, was given Royal Assent in February. Transport secretary Chris Grayling has said it will be "the backbone of our rail network".

Read more: HS2 says it made a serious error regarding 'unapproved' redundancy payouts

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