HS2’s chief financial officer has resigned over a report which found evidence of unauthorised redundancy payments on the £55.7bn project.
In July, a National Audit Office report found that of redundancy payments totalling £2.76m, an estimated £1.76m were not authorised “because they related to unapproved enhancements”.
The report found that HS2 had been operating a redundancy scheme “at enhanced terms without the necessary approvals”.
Today, HS2 confirmed Steve Allen will step down from his role as CFO of the mega-project at the end of the financial year, in light of the report’s findings.
Mr Allen is due to give evidence to the Public Accounts Committee next Monday alongside HS2 chief executive Mark Thurston and the Department for Transport’s permanent secretary Bernadette Kelly.
Mr Allen 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.”
At the time of the NAO report, its comptroller and auditor general, Sir Amyas Morse, said more work was needed within HS2 on building its capacity - in terms of people and systems - to keep pace with its programme.
He said further work was required and that ”this should focus not only on the company’s systems and processes, but also its culture and behaviours, which should support HS2 Ltd’s role as a delivery body with commercial and engineering expertise, operating within a defined public sector framework”.
He added: “Behaviours here fell short of the level required.”
Mr Allen was recruited to join HS2 two years ago by then chief executive Simon Kirby. He joined from Transport for London where he was finance managing director.
Mark Thurston said: “When I joined the organisation earlier this year we faced a number of issues that needed to be addressed, particularly around our administrative controls and mechanisms on redundancies agreed by the company, as highlighted by the recent NAO report into HS2’s annual accounts.
“Steve has been absolutely critical in identifying the ways to rectify those issues and make sure they do not happen again. But, having done that, I respect Steve’s decision that now is the right time for him to move on.
“I would like to thank him for all he has done for the company in this formative period. His honourable decision will enable me to build the executive team for the next phase of the project.”
More to follow