A critical National Audit Office report raised concerns about the unapproved redundancy payments in July which it described as “at enhanced terms without the necessary approvals”.
Redundancy compensation of one month’s salary for every year of service was agreed with outgoing staff to coincide with HS2’s office move from London to Birmingham.
But the NAO report revealed that in March 2016, HS2 had sought approval for a relocation and redundancy scheme and the Department for Transport gave written permission with a “clear restriction” that redundancy terms should be at statutory levels.
The statutory standard is roughly one week’s pay per year depending on age and length of employment.
In April it requested to enhance terms to a more generous level based on the civil service scheme. A senior official at the Department then instructed a senior executive at HS2 that no enhancements would be approved. But the instruction failed to be passed on within the company.
Staff received enhanced terms and some individuals were subsequently even offered ‘gardening leave’ allowing exit packages to exceed the £95,000 civil service redundancy ceiling.
Announcing his intention to step down 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, while 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.”