England Highways

Damage to Crown Property [DCP] Claim Costs

September 2020: Another investigation of Kier Highways!  The below 3 claims are apparently being dealt with by Highways England’s lawyers, the investigation process is ongoing … so what became of KPMG’s effort?

21/09/2020 ‘Accounting regulator, the Financial Reporting Council, has given the strongest indication yet of apparent rule breaches in accountant KPMG’s audits of Carillion before its collapse’ – full story: construction enquirer.

In 2017, KPMG was to audit Kier Highways after we evidenced Kier’s:

  1. cost exaggeration,
  2. contract non-compliance and
  3. fraud 

when billing Third Parties (drivers, fleets, hauliers or their insurers) following emergency incident attendance and repair – after ‘Damage to Crown Property (DCP) incidents. 

Initially, the 2017 audit of Kier Highways by Highways England was to involve Grant Thornton* however, 15/11/2017, we spoke with KPMG.  We repeated what we explained 21/06/2017 at a meeting with the Authority’s soon to be head of ‘Green Claims’, Sarah Green. The conversation with KPMG can be read here – 171115 KPMG and ‘Project Verde’.

The outcome of the audit remains secret as, in response to a FoIA request, Highways England cited section 41* of that Act – the request is with the ICO Case Reference: IC-40443-T6L2 (WDTK history). We suspect the audit report is being withheld as it holds damning information about billing, the Authority’s knowledge and their inability to control the contractor. 

It appears incredible that having been alerted to billing/pricing concerns in 2017 and invetsigationg/auditing this specific issue, KPMG seemingly failed to inform the Authority that there was no agreed schedule of DCP rates in any contract (ASC) since 2012. 

Of course there was an agreed schedule – the ‘non-existent so cannot provide’ excuse to withhold only 12/2018 when Highways England’s means of protecting the ‘held’ schedule fell away – ‘commercially sensitive’ was undermined and ‘vexatious’ dismissed by a judge such that release would need to occur (read more here).  After all, how can a schedule of rates be deemed ‘commercially sensitive’ unless it exists?

Further evidence in support of a schedule of rates can be found here – a precis of information submitted in support of a Tribunal hearing.

We estimate between 07/2014 and 10/2015, Kier’s contract non-compliance benefitted the contractor by in excess of £10million – from drivers, fleets, hauliers or their insurers over £10million.

However, in 2020, rather than have Kier comply with the contract, Highways England changed the contract to enable Kier to ill Third parties more … but not the Authority? Read more here

*28/09/2017 CMA:
“I’m writing to our lawyers to say there’s a document I think should be included as an exhibit, and it’s the one that’s in the public domain which is saying Area 9 is under in-investigation …”
Highways England:
“So if, I’m happy for you to write that, but don’t write ‘Grant Thornton’ because at the minute I’d, we’re not sure,  we’ve just had a blip with Grant Thornton, and if it’s not Grant Thornton it’s going to be KPMG, so I’m not, that’s all I was ringing you to, to say.”

**s41 FoIA 200: Information provided in confidence.
(1)Information is exempt information if—
(a)it was obtained by the public authority from any other person (including another public authority), and
(b)the disclosure of the information to the public (otherwise than under this Act) by the public authority holding it would constitute a breach of confidence actionable by that or any other person.
(2)The duty to confirm or deny does not arise if, or to the extent that, the confirmation or denial that would have to be given to comply with section 1(1)(a) would (apart from this Act) constitute an actionable breach of confidence