Balfour Beatty, which is leading the construction of the West Midlands section of the high-speed rail route, says it has terminated “all agreements” with the sub-contractor Danny Sullivan Group.
In a letter sent to HS2 Ltd, and shared with The i Paper, an anonymous whistleblower wrote: “This is fraud on a large scale which the public have a right to be informed of”.
In a statement, Balfour Beatty said that its “independent investigation” has now concluded and found that “Danny Sullivan Group had misinformed us about the provision of Construction Industry Scheme (CIS) workers instead of PAYE employees, in breach of their agreements”. Balfour Beatty, however, made no mention of the previous allegations of “tax fraud”.
“HS2 Ltd takes its responsibility for managing public money seriously. Unethical behaviour will not be tolerated, and we fully support our supply chain partners in rooting it out.
“A formal referral has already been made to HMRC, and we encourage anyone who believes they may have relevant information, which could support our enquiries, to report it in confidence via HS2’s Speak Out channels.”
Balfour Beatty says it has taken steps to make sure employees are either transferred to alternative labour suppliers or direct to Balfour Beatty “to ensure operational continuity and continuous employment for the workforce.”
Danny Sullivan Group continues to supply labour on other parts of the HS2 route.
Rishi Sunak axed HS2 north of Birmingham in 2023Balfour Beatty added: “Balfour Beatty is committed to the highest standards of ethical conduct.
Danny Sullivan Group has been contacted for comment, but the business has previously told The i Paper that it was taking the allegations “extremely seriously” and was “co-operating fully” with the investigation.
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It came as Transport Secretary Heidi Alexander told MPs that HS2’s final cost is likely to increase and that the Phase One completion date will be delayed beyond the 2033 originally planned.
HMRC has said it “cannot confirm nor deny investigations and we cannot comment on identifiable taxpayers or businesses.”
“We’re drawing a line in the sand after years of mismanagement of HS2 to restore the public’s trust in major infrastructure delivery, and that includes a zero-tolerance approach to fraud, corruption and bribery.
“The Government will use every tool at its disposal to recoup taxpayers’ money and hold those responsible to account.”
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