An investigation has been launched into “whistleblower allegations” about the practices of some “labour suppliers” to the company building the embattled HS2 rail line.

HS2 Ltd is investigating two companies that supply workers to build part of the London to Birmingham section of the line, which the i Paper, which first reported the story, says relates to the billing for the staff supplied.

The company, which is owned by the government, says it “treats all whistleblower allegations seriously” and launched an investigation earlier this year, while the Department for Transport adds that it will ensure any claims of wrongdoing are “thoroughly investigated”.

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The paper reports that the allegations relate to staff being misclassified, and therefore an inflated rate being charged to employ them.

It is understood the two firms under investigation were providing workers to one of HS2’s contractors on the West Midlands section of the line, Balfour Beatty Vinci (BBV), which is not accused of wrongdoing.

A spokesperson for HS2 Ltd says BBV has “implemented additional monitoring and controls”.

It is understood that one contractor remains suspended from new contracts while the probe continues.

An HS2 spokesperson said: “HS2 Ltd treats all whistleblower allegations seriously and we are aware of the claims made in relation to labour suppliers on part of the route.

“An investigation was launched earlier this year into a number of different allegations and our contractor Balfour Beatty VINCI has implemented additional monitoring and controls.”

A Department for Transport spokesperson added: “The government and HS2 Ltd 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.

“We have taken action to grip the delivery of HS2, tasking CEO Mark Wild to fundamentally reset the project and change the company’s culture and capability to deliver the line as cost effectively as possible.”

It is understood that there is currently no police or HMRC involvement.

BBV has been approached for comment.

What is HS2?

The HS2 rail line was announced in 2009 to boost capacity and cut the journey time between London and the north of England.

The initial plan was to build the first phase connecting London and Birmingham, followed by adding two branches to Manchester and Leeds – but the previous Conservative government decided to scrap the second phase due to spiralling costs and numerous setbacks, and the new Labour administration has said it will not reverse the decision.

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Sir Keir Starmer’s government has pledged to “get a grip” on the rising costs of the project that, according to a House of Commons research briefing, have been driven “by high inflation, as well as scope changes, worse ground conditions than expected and optimism bias”.

In 2012, it was estimated that HS2 Phase 1 would cost £20.5bn (in 2019 prices) to complete – but forecasts have since grown, with the most recent estimate in January 2024 estimating it would cost £49bn to £56.6bn (in 2019 prices).