Accounting anomaly buries HS2 contract labour costs in government transparency data

Alexandra Rogers
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The Government Unveils The High Speed 2 Rail Route Stations
HS2 is expected to cost £56bn (Source: Getty)

The actual monthly costs for the controversial High Speed 2 (HS2) project have been buried in the government's transparency data due to an accounting anomaly that one pressure group has called "nonsensical".

The Department for Transport (DfT) uploaded its payroll and headcount data publicly in April, giving a breakdown for costs for staff and non-payroll staff for organisations including HS2, transport watchdog Transport Focus, the British Transport Police and the DVLA.

The total monthly cost of contingent labour, classified as agency (clerical and admin) staff, interim managers and specialist contractors for HS2 in February comes in at -£740,766.97.

Read more: Labour peer warns costs of first phase of HS2 could double DfT's budget

The minus figure is thought to relate to an accounting adjustment made to reflect changes in the way the cost of temporary and agency staff are recorded.

However, HS2 refused to give the actual figure of what the department had spent on contingent labour costs.

An HS2 spokesperson said: “In order to deliver a project on the scale and complexity of HS2, we need to draw on a wide range of specialist skills, often at short notice and sometimes for short-term roles. As the project progresses, our need for different skills will also change and we expect this to be reflected in the make-up of the workforce. Full details of our headcount and spending on permanent and temporary staff are published each year in the annual report and accounts."

DfT declined to comment.

“In total HS2 is expected to create 25,000 jobs in construction and across our UK-wide supply chain as well as 2,000 apprenticeships.”

Joe Rukin, campaign co-ordinator for Stop HS2, said HS2 had taken a "creative approach to accounting practices".

"In accounting, the generally accepted principle is that if you want to avoid double counting something, you put in 'zero'," he said. "If you're putting in a minus figure, you've already double-counted it somewhere else, that's why you need to take part of it away.

"This nonsensical statement is typical of the creative approach to accounting practices that HS2 take, especially when it comes to their exorbitant staffing costs. It is clear that as costs have spiralled yet again, HS2 Ltd and the DfT are complicit in seeking to hide just how much is being wasted on this project, fearing that if there is yet another scandal about the cost of HS2 before the final construction contracts are signed off, that their gravy train might be derailed."

HS2 has been structured in two phases, with the first phase linking London to the West Midlands and the second phase connecting the West Midlands to Crewe. The overall cost of HS2 is expected to come in at about £56bn, up from an initial cost of £32.7bn in 2010.

James Price, campaign manager at the TaxPayers' Alliance, which has called for a Treasury review into the project, added: "HS2 is, at best, a highly controversial project, so spending transparency is of utmost importance. The runaway costs of this train have already convinced taxpayers that the project is shocking value for money, so if the government insists on steaming ahead with it, they should be honest about the costs. But scrapping the whole thing would be the best track to go down, saving taxpayers billions and preventing misery for those on the line."

Earlier this month it was revealed that compensation for landowners and businesses that have been affected by the development of the first phase of HS2 has reached £1.6bn.

Read more: Compensation to those affected by first phase of HS2 reaches £1.6bn

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