Unauthorised redundancy payments made by the state-owned company managing the HS2 rail project were a “shocking waste of taxpayers’ money”, MPs have said.
The Public Accounts Committee said the firm overseeing construction of a high-speed rail line offered staff terms “well in excess” of authorised levels.
The MPs blamed “weak internal processes” at HS2 for overpayments to 94 people totalling £1.76m.
An HS2 spokesperson acknowledged “a serious error” had been made.
The company made the payments in 2016-17 after shedding 94 staff in a move from London to Birmingham.
A combination of compulsory and voluntary redundancy schemes were offered on enhanced terms, resulting in a total bill of £2.76m, despite instructions from the Department of Transport that they should be at statutory rates, which would have incurred payments of £1m, MPs on the committee said.
The MPs’ report says that HS2’s chief executive at the time, Simon Kirby, had an email from the government telling him that he wasn’t allowed to offer staff larger, enhanced redundancy payments when the firm relocated.
But it says Mr Kirby didn’t pass that email on to anyone else.
However, Mr Kirby – who now works at Rolls Royce – said in a statement that he had not been responsible for the decision to approve more generous severance packages.
“I did not approve the payments at issue and deny any allegation of wrongdoing,” he said.
“I left HS2 in December last year and the decision to make senior managers redundant, and under what terms, was not made until after I left.”
MPs concluded a lack of basic financial controls at HS2 Ltd heightened the risk of fraud and financial errors, a situation it said was exacerbated by high rates of staff turnover.
“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,” the committee said.
The HS2 rail link being built between London, Manchester and Leeds, via Birmingham has already proved controversial for its impact on communities in the path of the new line, over its environmental impact and for its £55.7bn price tag.
The HS2 spokesperson said: “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.”