HS2’s private meetings with Greensill – transparency probe called for

By Tim Clark

Labour and the Liberal Democrat MPs have called on the government to publish details of all ministerial meetings after it was revealed that ex-financier Lex Greensill privately met with HS2 Ltd and “approved” the body’s payment methods.

It has been revealed that Greensill met with HS2 Ltd on three separate occasions during 2016 and 2017 in his role as an adviser to the government’s Cabinet Office.

Greensill’s involvement in public procurement has been called into questions in recent months after his firm Greensill Capital fell into administration.

The firm’s use of former British prime minister David Cameron as a lobbyist is also being examined by the Treasury’s select committee which is carrying out an inquiry under the banner “Lessons from Greensill Capital”.

The exact contents of the meetings with HS2 Ltd is unknown, however HS2 Ltd confirmed that the meetings were arranged to “discuss the area of prompt payment to the HS2 supply chain”.

The meetings have raised questions over whether an external adviser should have been given extensive access to major government projects such as HS2, which at the time was valued at £56bn.

Labour’s shadow minister for rail and MP for Slough Tan Dhesi described the revelations that Greensill held a number of private meetings with HS2 as “troubling” and has called for clarity over Greensill Capital’s involvement in HS2 and it’s supply chain.

Lib Dem transport spokesperson and MP for Richmond Park Sarah Olney said it was “imperative” that the government “provide a clear picture” over how decisions have been made.

In April, Whitehall’s current ethics chief Darren Tierney described Greensill’s appointment as a government adviser as a “glaring conflict of interest”.

According to a Freedom of Information response by HS2, meetings were held with Greensill in June 2016, October 2016 and January 2017.

A HS2 Ltd statement added: “HS2 Ltd met with Mr Lex Greensill in his capacity as a Crown Representative (Banking and Finance) to discuss the area of prompt payment to the HS2 supply chain.

“Following those discussions, HS2 Ltd was deemed to have an acceptable approach, which included adoption of the Fair Payment Charter and payment KPIs to monitor the HS2 supply change payment times. These measures have since been more recently reinforced with the adoption of Project Bank Accounts (PBAs) on HS2.”

The meetings in 2016 came shortly after it was revealed that a major review of HS2 by the UK’s former top civil servant Sir Jeremy Heywood, who approved Greensill’s appointment to the Cabinet Office, was working on how to cut costs on the project.

Commenting on the revelations, Dhesi said: “It’s troubling that there has not been greater clarity regarding Lex Greensill’s meetings and involvement in HS2. Transparency, accountability and openness must be at the heart of this transformational project, so I hope the full details of any involvement are immediately released.”

Lid Dem spokesperson Olney added that records should be kept of special advisor meetings: “Liberal Democrats firmly believe more transparency is needed in the way central Government operates. On projects such as HS2, where the impact on local communities is so vast, it is imperative that we get a clear picture of how decisions are being made and by whose involvement.

“While in coalition, we brought in rules to publish all ministerial meetings and also introduced the Statutory Register of Consultant Lobbyists. However, recent developments show there is still work to be done.

“It’s now clear that all ministerial meetings should be made available and accessible to the wider public. We also believe records should be kept of Special Adviser meeting with lobbyists, and that stricter criteria must be put in place to determine who exactly can become a Special Adviser.”

Greensill Capital and its supply chain financing model

Led by the 44-year-old Australian, Greensill Capital specialised in supply chain financing and was given access to the Cabinet Office under former prime minister David Cameron.

The supply chain finance allowed smaller firms to access funding from work owed upfront, rather than waiting up to 90 days for payment from main contractors.

According to an FT investigation, supply chain finance played a key role in the eventual downfall of Carillion, which made extensive use of supply chain finance to mask mounting debts within the group, which collapsed in January 2018 owing. Carillion never used Greensill Finance, however according to the FT the company setup its own finance facility after meeting with Greensill.

Greensill Capital filed for insolvency on March 8 this year after being unable to repay a $140M loan from bank Credit Suisse. The firm has also been hit by loan defaults from money lent to steel magnate Sanjeev Gupta’s GFG Alliance.

Earlier this year former Cameron, who was appointed as an advisor to Greensill Capital, was embroiled in a controversy over his extensive lobbying of both current chancellor Rishi Sunak and other ministers over access to credit for the company at the onset of the first UK Covid-19 lockdown last March.

The former PM sent over 70 text messages to ministers and officials including at the Bank of England in an attempt to gain access to the government’s main coronavirus lending scheme.

The Cabinet office declined to comment. The Department for Transport declined to comment. HS2 declined to provide further comment.

Source: New Civil Engineer