27. The former Chief Executive of Crossrail Ltd was paid a basic salary of £477,000 in 2017-18 (£463,000 in 2016-17) and the previous Chair was paid £250,000 (£250,000 in 2016-17). The former Chief Executive was also paid a bonus of £160,000 for their performance in 2016-17 (£481,000 for performance in 2015-16).62 63 The Chair of Crossrail Ltd, not the programme sponsors, was responsible for carrying out the Chief Executive's annual performance appraisal and setting the performance objectives for the following year. We questioned the former Chair of Crossrail Ltd why this level of remuneration was appropriate given that there were already signs by this time that the programme was not going according to plan.64 The previous Chair told us that the former Chief Executive's performance was scored against the objectives set and the results audited to make sure the metrics were correct. He told us that only once did they use a degree of discretion in rating performance because they wanted to reflect the outstanding performance of the Executive around the safety of the programme.65 The previous Chair also told us that the former Chief Executive did not achieve a bonus every year.66
28. The Department stated its position on remuneration and bonuses in evidence to our sister committee, the Public Administration and Constitutional Affairs Committee's recent inquiry into the Government's management of major projects.67 The Department told us that there should be clear limits to remuneration levels but that it was important that remuneration levels for those delivering large projects allowed the Department and its arm's length bodies to recruit people with the right level of skills and experience. The Department stated that its role in setting the remuneration of senior Crossrail Ltd staff was very limited because Crossrail Ltd was a subsidiary of TfL. However, it did acknowledge that there was insufficient sponsor oversight and challenge of, or opportunity to be consulted upon, decisions on the remuneration of senior staff at Crossrail Ltd.68
29. The Department explained that it ensured that it has the opportunity to directly participate in the decisions of remuneration committees of its arm's length bodies and that it would take a different approach to the Crossrail Ltd Board on the balance to be struck between base pay and variable, performance-related pay. It also told us that the practices it has in place for its other arm's length bodies provide greater accountability.69 However, in December 2017 we reported on concerning remuneration practices in one of the Department's arm's length bodies, HS2 Ltd. We found that HS2 Ltd made £1.76 million of unauthorised payments to staff through compulsory and voluntary redundancy schemes offered at enhanced terms well in excess of those authorised by the Department for Transport.70
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62 Numbers rounded to nearest thousand. Bonuses shown were paid in the subsequent financial year.
63 Q156; C&AG's Report, , A memorandum on the Crossrail programme, Session 2017-2019, HC 1924, 28 February 2019, page 19; Transport for London, Annual Report and Statement of Accounts 2016-17, September 2017.
64 Qq 156, 192-195; C&AG's report, paras 2.20, 2.23
65 Qq 156 -161
66 Q191-194
67 Qq 160-161; Evs - DfT submission to PACAC inquiry on government's management of major projects.
68 Q161
69 Q 161
70 Committee of Public Accounts, High Speed 2 Annual Report and Accounts, Tenth report of session 2017-19, HC 454, 15 December 2017