03/2018 Seeking Audit Update

Copy 20/03/2018

From: Philip Swift @ CMA
Sent: 08 March 2018 11:15
To: ‘Sarah.Green@highwaysengland.co.uk’ <Sarah.Green@highwaysengland.co.uk>
Cc: ‘Jim.O’Sullivan@highwaysengland.co.uk’ <Jim.O’Sullivan@highwaysengland.co.uk>; ‘Matthews, Colin’ <Colin.Matthews@highwaysengland.co.uk>
Subject: further evidence of misrepresentation and gross overstatement by Kier Highways & Highways England U01A013

Dear Mrs Green,

Please find the attached letter which relates to an Area 9, Kier Highways Ltd (KHL) matter.

It is evident that, from the commencement of the contract between KHL and Highways England, in 07/2014, KHL ignored the section of the agreement that offered Third Parties (drivers, fleets and insurers) protection by setting out the calculation by which the ‘maximum’ a Third Party could be charged was arrived at – Appendix A to Annex 23.  Instead, KHL used their unjustifiable ‘1153’ process that saw every claim overstated.  We estimate the cost to Third Parties was over £10 million, about KHL’s profit for the year, at a time they were being sold.

After a year of battling with KHL over the appropriateness and justification of 1153, your contractor they threw in the towel when unable to have our clients stop instructing us – the attack of our business was unsuccessful and they abandoned 1153.

Highways England failed to monitor KHL, a company who you have let step into the shoes of a Public Authority and who it appears Highways England are now unable to control.

When an audit was undertaken in 01/2016, following our initial concerns, Highways England failed to identify the impact of 1153 and were supportive of KHL.  A number of staff at Highways England expressed support for KHL.

However, facts have been misrepresented to us by Highways England and KHL.  The process that replaced 1153 is exaggeration in another guise.  It differs in that 1153 was alien to the contract, whereas the new process of ‘defined costs’ pays lip-service to it; purports to be compliant but is not. Highways England have failed to identify this.

It is claimed an audit is being undertaken.  Grant Thornton were to be appointed but KPMG were eventually engaged. We have found KPMG to be less than engaging and it now appears the outcome of their report, which presumably comes at a cost to Highways England, has been leaked; finds no issue.

The attached further evidences exaggeration and misrepresentation.  The information is in addition to that which I provided at our meeting over 6 months ago.

The claim also displays the daily Time Costing Sheets (DTCS) for the AIW’s, time sheets; handwritten accounts of the AIW’s activities during a shift.  Ms Granville has told the Courts, in the name of Highways England, these AIW’s:

  • Work core hours – this is also documented by KHL in the ‘Insurers Guide’
  • Are paid the uplift charged, a ‘multiplier’ when they work outside core hours

The DTCS, which Third Parties are not supplied by KHL, evidence that AIW’s work shifts 24 hour days weekdays.  Why are we and the Courts being told to the contrary, that they work ‘core hours’ (8am to 5pm)?

This misrepresentation and the evidence in our possession indicates AIW’s are not paid the uplift.  That is to say it appears further false statements are being made to the Courts in the name of Highways England and us and the uplift is pocketed by KHL – the activity appears to be profiteering.

Highways England are permitting, aiding this conduct which appears to amount to fraud, contempt of Court and malfeasance.  I have highlighted a number of further anomalies that indicate KHL are embellishing charges.  Once again, the overstatement will have run into £ millions; KHL were handling over 5,000 claims before they were gifted Areas 6 and 8 in 04/2017.

When is the audit to be concluded, when are we to meet and when will the inappropriate conduct cease?

Yours sincerely,