Sir Jon Thompson is set to step down as chief executive of the UK audit watchdog to become the new chair of the HS2 high-speed rail link project, balancing both jobs during a six-month notice period.
The move, confirmed by the Department for Transport on Thursday, will see Thompson quit the Financial Reporting Council to take the reins at HS2, which has been dogged by years of delays and budget overruns.
The Financial Times reported earlier this week that the DfT was pursuing two initiatives — dubbed Operation Blue Diamond and Project Silverlight — to rein in costs on the rail project, in part by delaying its completion by up to four more years.
The cost-cutting exercise could push its final completion back to 2045 — 12 years late. The route will link London to Manchester via Birmingham with a spur to a new station at East Midlands Parkway, although this could be axed under the latest review.
Thompson’s appointment, first reported by Sky News, will be effective immediately and ends a protracted search for a replacement for previous HS2 boss Allan Cook, who left in July 2021.
Thompson’s move raises the prospect of further upheaval at the FRC, which has been left in limbo by ministers’ decision to delay audit reforms that would transform the body into a more powerful watchdog called the Audit, Reporting and Governance Authority.
The FRC said Thompson would continue as its part-time chief executive during his six-month notice period. Sarah Rapson, head of the FRC’s supervisory division, has been temporarily appointed as his deputy during that period, the regulator said, adding that the government would immediately start the search for a new boss.
Thompson has overhauled the accounting regulator since taking over in 2019, roughly doubling its staff to more than 400 and bolstering its enforcement action against auditors carrying out poor-quality work.
Before his appointment the ailing watchdog had been branded a “ramshackle house” in a 2018 government-commissioned review. Its oversight of the sector had been heavily criticised after auditors failed to raise red flags ahead of corporate scandals at retailer BHS and outsourcer Carillion.
FRC chair Sir Jan du Plessis said that under Thompson the watchdog had become a “modern, fit-for-purpose regulator”.
Thompson previously led HM Revenue & Customs. Before that he was permanent secretary at the Ministry of Defence. He has been a non-executive director at HS2 since 2021 and became deputy chair early last year and been acting as interim chair. Non-executive director Elaine Holt has been appointed HS2’s new deputy chair.
The FT reported last year that Thompson was in the running for the top job at the high-speed rail project after it relaunched its search for a new chair in March. Scores of people were approached but many turned down the job as it was seen as a “poisoned chalice”, said one person close to the discussions.
Additional reporting by Philip Georgiadis
