11/07/2019 Highways England letter to NAO re ‘Misunderstanding’

blue italic text – Ms Sharon McCarthy letter to the National Audit Office (NAO)

highways Corporate Assurance Division


National Audit Office

I refer to our meeting on 14 May 2019, convened at your request to discuss certain matters raised with you by Mr Philip Swift, relating to alleged over-charging of third parties for repairs to damage to roads and motorways caused by traffic accidents.

I was aware that on the basis of the information exchanged in our meeting the NAO would write to Mr Swift — which you did by letter dated 16 May 2019, setting out the NAO’s version of what was said at our meeting. I also understand that Mr Swift has obtained from the NAO a copy of the NAO’s note of our meeting.

In the course of proceedings brought by Mr Swift against the Information Commissioner and Highways England before the Information Tribunal (the “Tribunal”), Mr Swift seeks to rely on the NAO’s letter, and its note of our meeting, and has provided copies of those documents to Highways England, as well as the Information Commissioner and the Tribunal.

The Tribunal proceedings concern one of Mr Swift’s numerous requests to Highways England to be provided with an alleged “schedule of defined costs — essentially, a list of agreed prices — which Mr Swift erroneously believes are charged by civil engineering contractors for repairs to roads and motorways.

Note: Ms. McCarthy fails to mention the ‘numerous requests’ are in fact just a few since 11/2018 when Patrick Carney of Highways England stated the rates were not commercially sensitive.

Ms. McCarthy does not explain that prior to 07/2018, Highways England maintained a spreadsheet of requests about rates and state detailing 175 FoIA requests or reviews they received in respect of claims. In response to not one (that I have found) has Highways England ever stated ‘no such thing’ and therefore ‘we do not hold the schedule’.

Many requests to Highways England have been handled by Sian Jones, a former ICO employee.  ICO guidance includes ‘Determining whether information is held‘, an extract from which reads:

Issues relevant to both FOIA and the EIR

7. When a public authority receives a request, its first task is usually to determine whether it holds the requested information. In many cases it will be simple to locate information, particularly if the public authority practices good records management. 

It, therefore, appears on 175 occasions between 2013 and 07/2018, the Authority established the information existed and having confirmed this was the case, applied the ‘commercially sensitive’ exemption.  Subsequent (persistent) requestors were deemed ‘vexatious’.  In fact, if Ms. Mccarthy’s claim there are no such rates is true, the only vexatious party is the Pubic Authority who gave grounds (on 175 occasions) to believe such rates were held but to be withheld.

Highways England has not agreed any such prices with its contractors, does not hold such a schedule, and has refused Mr Swift’s request on those grounds.

The Information Commissioner has issued a decision notice upholding Highways England’s position. Mr Swift has challenged that decision notice.

Having reviewed the NAO’s meeting note, and the letter to Mr Swift, unfortunately I wasn’t clear in my description of the correct position with regard to the matters in hand.

Why has Ms. McCarthy not produced and referred to her own note of the meeting?  In the absence of such a record, why would it be considered Ms. McCarthy’s approach was anything other than casual, unprofessional and lacking?

Yet almost 2-months later Ms. McCarthy is able to recall what she said; the opposite of what the NAO claim was conveyed and recorded.

Furthermore, Ms. McCarthy does not explain how, if she stated rates do not exist, the conversation got around to the application fo these non-existent rates!

Both documents refer to a “schedule of rates’, seeming to confirm the existence of such a document, and hence the existence of agreement between Highways England and its contractors as to the prices chargeable for repairs to roads and motorways.

There is no ‘seeming’ to confirm the existence of a schedule of rates, the NAO has clearly conveyed being informed there is a schedule. In the absence of a recording (the note is the next best evidence), it can only be imaged how the conversation progressed but the question ‘does something exist’ invites a simple ‘yes’ or ‘no’.

What does Ms. Mccarthy not understand about straightforward statements?  Ms. McCarthy may disagree with the statements but seeking to dilute their importance by claiming they ‘seem’ to confirm the existence when they unequivocally assert the existence is clutching at straws.

Mr Swift relies on the NAO documents to contradict the evidence put before the Tribunal by Highways England, confirming in the clearest terms that the alleged “schedule of defined cost:’ requested by Mr Swift does not in fact exist, and that Highways England has not agreed the prices chargeable by its contractors for making any such repairs.

Let me be absolutely clear about this.  I am not dependent upon the NAO’s account in isolation.  It was the bizarre and contradicted stance adopted by Highways England post-Carney (11/2018) that caused me to approach the NAO.  If anyone would know whether there was a set of rates and the importance for one to exist, it would be the NAO.  How could the Authority be audited in the absence of a set of rates against which to reconcile the £millions in tax-payers monies being spent and the appropriateness of not reducing a contractor’s monthly lumpsum payment?

Without wishing to over-complicate matters, the ASCs to which I referred at our meeting do in fact each include a schedule of rates, but this schedule categorically does not comprise a set of pre-agreed prices at which contractors are required to repair damage to roads and motorways caused by road traffic accidents.

There is no overly-complicated situation here.  To suggest this is to create an illusion, to employ smoke and mirrors, to distract. Partick Carney of Highway England assisted to identify the two types of rates:

  • ASC (Asset Support Contract) for pre-planned works
  • DCP (Damage to Crown Property) for emergency incidents

I have no interest in ASC rates, never have. I review costs presented to drivers, fleets, hauliers and insurers following collisions, spills or fires – the charges raised for a contractor’s attendance and reinstatement.  These are DCP Rates.

Ms. McCarthy can (like several in Highways England) point to the more detailed processes and calculations associated with ‘ASC Rates’, these are rates for pre-planned works.  But this was:

  • not what I complained to the NAO about
  • not what was discussed by reference to the NAO’s note
  • a meeting and discussion with Ms. Mccarthy clearly about DCP Rates as the NAO has also recorded the discussion explaining the application of the rates which are in relation to claims i.e. costs following Damage to Crown property (DCP)

The NAO record makes no reference to ASC rates. Yet Ms. McCarthy wishes to explain this red-herring:

In very brief summary, the schedule in fact comprises an extremely complex costs model used by contractors and Highways England to assess and award the contract and then is used when agreeing target prices for improvement and renewal schemes and similar large-scale project work carried out under the ASCs. Scheme work is paid for as Defined Cost plus Fee (aka actual cost) and the total compared to the sum of the target prices in order to calculate a pain or gain share arrangement for contractor and client. For your information, an Information Tribunal has held that broadly speaking that schedule does not contain the information requested by Mr Swift, and is in any event commercially sensitive. I wish to make it clear that any reference at the meeting I made to a “schedule of rates” was a reference to the schedule, mentioned above, setting target prices for major improvement schemes and similar large-scale project work.

Why, during a meeting about DCP related matters, would Ms. McCarthy make any reference to ASC Rates, to a schedule for an aspect of highway development I have no interest in, have never asked about and did not complain about to the NAO?

The NAO’s contemporaneous(?) notes, taken in respect of concerns I raised about DCP matters (not ASC rates) make no reference to Ms. Mccarthy’s tangential explanation about ASC rates – what have they got to do with the price of tea in China?

In case it assists, and with apologies in case I was not sufficiently clear when explaining relevant matters at our meeting I enclose, as an Annex to this letter, a high-level account of the correct position.

The apology should be addressed to Highways England’s managers who have been seeking to keep rates secret for years.

The ‘high-level’ account of the situation is no such thing but once again a distraction that causes the writer to consider another set of (ASC) rates – a set that Highways England did not ‘overlook’ but established at contract inception with their contractors for works.

I take this opportunity to note, however, based on the enclosed, that if as a result of our meeting the NAO, due to a misunderstanding, had formed an impression that Highways England agrees with its contractors’ schedules of rates setting down the prices chargeable for repairs to roads and motorways, then, unfortunately, that impression was mistaken.

‘If’ the NAO formed the ‘impression’ a schedule of rates exists? Has Ms McCarthy seen the NAO letter or meeting note?  The NAO’s position is asserted; they were told a schedule of rates exist AND how they are applied.

I hope that this letter and its enclosure assists you. If you have any questions about any of the foregoing, or if I or Highways England can be of any further assistance to you and the NAO in this regard, please do not hesitate to let me know.

For your information, Highways England intends providing the Tribunal, Mr Swift, and the Information Commissioner with a copy of this letter, in connection with the freedom of information proceedings to which I referred above, and specifically in correction of the record in those proceedings, and in denial of Mr Swift’s purported reliance on the NAO letter and its note of our meeting

Yours sincerely

Sharon McCarthy

Highways England will clearly do all they can to try and convince others that the schedule of DCP Rates does not exist.  They sought to keep the process of ‘defined costs’ (DCP Rates) + Third Party Claims Overhead from drivers, fleets and insurers for years – this was only uncovered by accident (by us) and publicized in 01/2017.

Since 11/2018, Highways England’s stance to FoIA requests for rate-related information charged form ‘commercially sensitive’ to ‘do not hold.  Multiple examples of such statements can be found here and include quotes such as:

As none of the ASCs contain schedules of rates, and Highways England considers that the lack of transparency applies equally to above threshold claims (i.e. those above £10,000) claims as well as claims below threshold it was considered that a review covering all areas was required.

NONE of the ASC’s contain schedules of rates. Really?

Highways England has adopted the same stance to a request for information about Area 10 stating no schedule of rates exists.  But again, this is false – a schedule of rates exist.