MPs have called on the government to consider legal action against the former chief executive of the public body building the new high-speed rail network, over £1.76m in redundancy payments made in direct contravention of civil service rules.

HS2 Ltd, which is overseeing the £55bn project, paid £2.76m to 94 individuals, while the statutory redundancy terms should have kept the bill at £1m.

MPs on the public accounts committee said the payouts were “a shocking waste of taxpayers’ money”.

The National Audit Office found that HS2 Ltd’s former chief executive, Simon Kirby, was emailed in April 2016 by a senior civil servant at the Department for Transport expressly disallowing the redundancy payouts proposed.

The email was not forwarded and an HR director subsequently briefed the board and executive committee that the DfT had approved the scheme. An audit later found documents had been altered in an apparent attempt to cover up mistakes.

In a damning report, the committee said that HS2 Ltd “lacks basic financial controls … heightening the risk of fraud and financial errors”. It continued: “We remain concerned that the relationship between the DfT and HS2 Ltd was not robust enough to prevent [the payouts] and that ultimately Kirby has not been held to account for his actions.

“HS2 Ltd needs to make significant improvements to demonstrate probity, value for money and appropriate anti-fraud, bribery and corruption.”

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Geoffrey Clifton-Brown, a Conservative MP on the committee, said the payouts looked to amount to “a wilful misuse of public funds”. He said: “To ask for a derogation from the normal civil service terms for redundancy, to have that refused by the department, and then go ahead seems like a wilful misuse of public funds. This money is lost – it can’t be reclaimed.”

He said: “It is up to lawyers to decided what, if any, charge should be appropriate. I am calling for the DfT to take legal advice if any further action could be taken – and if the advice is that Kirby can be pursued, he should be.”

Kirby, now chief operating officer of Rolls-Royce, said: “I did not approve the payments at issue and deny any allegation of wrongdoing. I have had no contact from either the NAO or DfT on the audit of HS2’s accounts and redundancy payments.

“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. While I do not recall whether I forwarded one specific email from David Prout to others within HS2, the issue of statutory severance was well known within HS2 and I recall regular contact between HS2 and DfT – at a number of levels – on this specific issue.”

A DfT spokesperson said: “We have made clear to HS2 Ltd in the strongest terms that we expect them to always meet their obligations and responsibilities to the taxpayer.

“As the NAO said this was a failure in the internal process at HS2 Ltd that resulted in these payments being made without approval in place.

“The Department has received legal advice that bringing a claim against Mr Kirby for breaching his duties and responsibilities as CEO and director of HS2 Ltd would not be justified.”

HS2 Ltd, a government-owned company, was established in 2009 to build the proposed high-speed rail link between London, Birmingham, Manchester and Leeds.

The payouts were offered after the firm decided to relocate its main office from London to Birmingham. An NAO report earlier this year found that some individuals received £200,000 rather than the £95,000 cap, and warned of troubling “culture and behaviours” at the firm.

A spokesperson said HS2 Ltd said it would review the MPs’ recommendations, and that the payments were “a serious error”.

He said: “HS2 takes its responsibility for spending taxpayers’ money extremely seriously so when we get things wrong we will hold our hands up. We are now implementing all of the NAO’s recommendations in full and [new chief executive] Mark Thurston and the HS2 executive team will ensure this doesn’t happen again.”



Labour’s shadow transport secretary, Andy McDonald, said: “Yet again a lack of oversight of HS2 Ltd has resulted in a waste of taxpayers’ cash. The secretary of state needs to take responsibility and spell out what he will do to prevent any more public money being squandered.”