HS2 investigating two firms supplying staff for West Midlands leg

The company building the HS2 rail line between London and Birmingham says it is investigating “allegations” about the practices of some “labour suppliers” to the project.

HS2 Ltd is looking into two firms supplying workers to build the West Midlands section of the high-speed line.

It is understood to relate to billing for the staff supplied.

The Department for Transport said it would ensure “any claims of wrongdoing in HS2’s supply chain” were “thoroughly” dealt with.

The existence of HS2’s investigation, which began earlier this year was first reported by the i newspaper on Monday.

According to the paper, the matter relates to misclassification of staff and claims that inflated rates were being charged for them.

It is understood the two firms being looked at were providing workers to Balfour Beatty Vinci, one of HS2’s contractors.

A HS2 spokesperson said it treated “all whistleblower allegations seriously”, adding that Balfour Beatty Vinci “had implemented additional monitoring and controls”.

It is understood one of the labour suppliers remains suspended from new contracts while inquiries continue.

A Department for Transport spokesman said the government and HS2 “take all whistleblower allegations extremely seriously and have a zero-tolerance attitude towards fraud, bribery, and corruption”.

“We will therefore ensure any claims of wrongdoing in HS2’s supply chain are thoroughly investigated.”

The police and HMRC are not believed to be involved.

Work is currently under way to build the nearly 140-mile high-speed line between London and the West Midlands.

The HS2 project was announced in 2009 to boost capacity on England’s north-south rail links, aiming to reduce journey times, create jobs and boost the UK economy.

The original plan was to build the line in two phases – with the first connecting London and Birmingham and the second adding two branches to Manchester and Leeds.

But the project has suffered various setbacks and spiralling costs since it was announced and the decision was taken by the last Conservative government to scrap the second phase. The Labour government has said it will not reinstate it.

Much of the work London-Birmingham section has been completed – with more than 75% of tunnelling complete, according to HS2 Ltd.

Separately, the mayors of Greater Manchester and the West Midlands have revealed plans for a new rail line linking their regions which would rely on private investment and cost less than the scrapped northern leg of HS2.

Official estimates of how much HS2 will cost have changed several times over the years.

Last October, the government announced that ministers would take a direct role in overseeing the building of the line to try to “get a grip” on rising costs.

The government previously said costs had soared because of factors including “poor project management, inflation and poor performance from the supply chain”.

In 2012 it was estimated that HS2 Phase 1 (London to Birmingham) would cost £20.5bn (at 2019 prices). The government’s most recent estimate of the overall cost is between £45bn and £54bn at 2019 prices – but HS2 management have estimated the figure to be more like £49bn to £57bn.

According to a House of Commons research briefing, cost increases have been driven “by high inflation, as well as scope changes, worse ground conditions than expected and optimism bias”.