191205 PHSO

05/12/2019 to Parliamentary and Health Service Ombudsman

Dear Sir,

Thank you for your email of 04 December 2019 10:43 received today.

The issue relates to the ‘strategic’ road network – which, it appears Highways England has no control over.   Mine is a straightforward but serious concern:

  • State-enabled gross exaggeration and fraud on an industrial scale; the overcharging of drivers, fleets, hauliers (or their insurers) by contractors employed by Highways England (HE) and Transport for London (TfL).

We uncovered exaggeration years ago; drivers, fleets, hauliers or their insurers should be charged by a (secret) process:

  • Actual cost (£) + uplift (%) = maximum (£)
    • ‘actual cost’ aka ‘defined cost’ or ‘base rate’, is to be the same to HE and a Third Party (TP)
    • ‘uplift’ differs; about 6.5% to HE and 25.29% to a TP

In other words, a TP was to be charged 18.79% more (25.29%-6.5%).  Using a 2016 example we produced to the Authority 21/06/2017, the actual cost of an operative who attended an emergency was £23.71 / hour – charged to the Authority. the equation above is £23.71 + £1.54 = £25.25/hour.

  • Please explain how the charge for this operative to a TP becomes £73.05 / hour, by applying an uplift of 25.29% of £23.71.
  • How is this contract non-compliant process other than exaggeration?

To quote Highways England’s legal team ‘exaggeration is fraud’ (12/11/2019)

Furthermore, the contractor tells us and the Courts, these operatives work 8am to 5pm after which they are paid an uplift of 1.5x (after 5pm of a weekday) and 2x (of a weekend).  So, for most of their week, they are charged at either:

  • £109.57 / hour after 5pm of a weekday
  • £146.10 / hour of a weekend

But the operatives tell us they work SHIFTS, they are NOT paid any uplift and even overtime is at FLAT RATE.

  • Please explain how charging a cost not incurred is other than fraud and
  • how making false statements to third parties does not compound the fraud and
  • making false statements to a Judge is not contempt

You would think that after 3+ years of trying to understand the above, the Authority could explain the activity undertaken in their name and which we have detailed to them.

With regard to your ‘service’, I am receiving contradictory information about the status of the complaint which dates from mid-2016 and your intention to investigate.

Your letter of yesterday only fuels my concerns about delays and ineffectiveness. I am aware the Authority now claims to have ‘overlooked’ price-lists for damage to Crown property (DCP) repairs when contracting (for the past 5+ years).   I do not believe this and suspect a reason for keeping the schedule of rates secret is to ensure the extent of the exaggeration is difficult to determine another, to avoid having to be specific when seeking recovery and simply claiming ‘the costs have to be reasonable’.  By withholding the rates, by preventing defendants access to the ‘reasonable / agreed’ rates, their position is prejudiced – so much for Public Authority serving the people.

This ‘not held’ stance with regard to rates is peculiar.  For years these rates have been withheld – time and time again requestors were told ‘HELD’ but ‘commercially sensitive’, so exempt from disclosure.  Being persistent, a request was labelled vexatious – another exemption (‘ shield’) with which to protect the rates, keep them secret.  But in late 2018, both protections fell away; the rates are not commercially sensitive and my request not vexatious- indeed, the Authority was criticised for providing erroneous information and for their conduct – 04/10/2019 their permission to appeal to the Upper Tribunal was refused

The shields that were ‘commercially sensitive’ and ‘vexatious’ having fallen away, the rates could / should be released and the 25/07/2017 request return the figures. But … the Authority U-Turned … ‘no such thing, so not held’.  Odd they did not think to convey this in 2017 in response to a request (read more there) or to any one of the 175 rate-related requests or reviews the Authority has catalogued receiving between 2013 and 07/2018. 

We will be interested to see what they supply in response to the 25/07/2017 request, a Tribunal having dismissed ‘vexatious’,  Surely the Authority will not say ‘not held’ when this could have been conveyed over two years ago avoiding the expense of the ICO, Government Legal Department, Counsel and Tribunals?

I note the PHSO is reassured by the Authority’s explanation, they are putting rates in place:

Highways England say that they are conscious that a lack of specified rates for equipment and labour can result in a lack of transparency in relation to the costs of repairs. In recognition of that, they have introduced a National Schedule of Repair Costs as a means of increasing transparency relating to charges for third party repairs. Highways England say that they have engaged with you on the introduction of the Schedule

The NSoRC referred to above was suspended more than a month ago following my detailed submissions and conversations on the issue. There is no agreed process, likely due in part to the issues raised with the PHSO over 3 years ago!

We know many ‘base rates’, what a contractor is charging Highways England and we are aware of the exaggerated rates to 1,000’s of Third Parties.  It appears the gulf between them is too wide to bridge.  Highways England have a serious problem which the PHSO could have helped address years ago.

It appears the Authority, in permitting the contractor conduct, may be compromised.  Can the Authority responsible for the strategic road network not construct a viable charging process? 

Why should they have to?  There is a perfectly good one in place (above): ‘Actual cost (£) + uplift (%) = maximum (£)’ but one not been complied with.

  • why not?

Possibly because adherence does not enable profiteering … and Highways England is not simply unwilling to insist upon compliance, they are unable to?