The TransPennine Route Upgrade (TRU), an £11.5bn programme of rail improvements between York and Manchester via Leeds, is conducting an internal probe over the conduct of Danny Sullivan Group, a sub-contractor that supplies construction workers for the project.
The internal investigation at the TRU only concerns labour supply, not the entire project. Danny Sullivan Group declined to comment.
The family business of over 30 years, based in London, is suspended from working on the West Midlands section of the high-speed project, between Birmingham and London, while an internal investigation is carried out.
Chancellor Rachel Reeves visiting the TransPennine Route Upgrade with Andy Burnham last November (Photo: Danny Lawson/PA Wire)
Over the weekend, HS2 revealed it had formally reported whistle-blower allegations to HM Revenue & Customs (HMRC). The firm said it encouraged anyone with relevant information to report it via confidential internal channels.
The firm supplies labour to BAM, the construction firm leading the TransPennine Route Upgrade.
Network Rail said that “no evidence of impropriety has been brought to the attention of TRU” to date and that “any allegations would be fully investigated”.
A spokesperson for BAM UK & Ireland also confirmed the probe and said: “BAM is aware of the media coverage regarding alleged irregularities with contingent labour suppliers.
The Department for Transport said it takes all whistleblower allegations “extremely seriously” and has a “zero-tolerance attitude towards fraud, bribery and corruption.”
‘This is fraud on a large scale’
HS2 workers at the Birmingham section of the high speed rail project (Photo: Ryan Jenkinson/Getty Images)Last month, The i Paper revealed how HS2 has been approached by two separate whistleblowers since the start of the year.
In the email, shared with The i Paper, the employee claims that during an audit “it was discovered that Danny Sullivan Group had around 70 operatives working under CIS [the Construction Industry Scheme].”
The previous Conservative government announced new rules in 2024 to tighten up the scheme amid concerns it was open to manipulation. HMRC had discovered abuses relating to CIS deductions, including but not limited to deductions being claimed by subcontractor companies that did not operate in construction.
They added: “I find it deeply concerning that our taxes are being wasted through ongoing fraudulent activity.”
“This is fraud on a large scale which the public have a right to be informed of,” the letter said.
Government will promise to ‘learn lessons’ from HS2
The TransPennine Route Upgrade was first announced by the Conservative-led coalition government in 2011 but the full scope of the project was only agreed by Boris Johnson in 2021.
Rishi Sunak axed HS2 north of Birmingham
The 76-mile-long project was originally supposed to cost £2.9bn in 2018.
Labour’s Transport Secretary Heidi Alexander is due to make a speech on Wednesday in which she will offer a scathing assessment of how HS2 has been run to date and promise that lessons have been learned for future projects.
More than 3,000 UK businesses are involved in the supply chain on the route which runs from London to Birmingham.
More than £32bn has been spent on HS2 so far, including almost £600m on buying land and around 1,000 properties for Phase Two which was cancelled by Rishi Sunak in 2023.
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