22/01/2020 to the National Audit Office
RE: HIGHWAYS ENGLAND DAMAGE TO CROWN PROPERTY (DCP) RATES
Thank you for your email of 21/01/2020.
Anticipating I will need to escalate the matter, to remove it from your sheltered consideration, I have included correspondence and removed personal information.
I remain concerned I have not been afforded the benefit of the stage 1 complaints process.
My concerns remain:
• Highways England have not been audited competently
• The pain / gain share has not been explored
• The lack (alleged) lack of a price list for DCP works not identified in 7 years
• The inability of the NAO to keep accurate records
• The failure to address my original complaint
29/04/2019, I approached the NAO being concerned about contradictory information I was receiving from Highways England and in turn, your audits of the company. A copy of my complaint appears at:
Appendix 1. 16/04/2019 to NAO
For years, the Authority has stated that the base rates or ‘defined costs’ used to bill them and Third-Parties were commercially sensitive ergo, they exist. My attempts to acquire this ‘schedule of DCP works rates’ via FoIA caused me to be labelled ‘vexatious’. I progressed the matter to a Tribunal at which the Authority was heavily criticised when the Tribunal Judges dismissed their stance. An extract and comment can be found at:
Appendix 2. 12/2018 Tribunal finding of NOT vexatious
The Tribunal remarked upon:
• inadequate or inaccurate responses by the personnel within the Public Authority.
• he (Mr Swift) has received erroneous information.
• Amongst other issues he requested information on three issues his business is concerned which include;
• One of the contractors was inflating their costs on a scale arguably amounting to fraud;
• Costs are different according to Third Parties being billed directly on the basis that the costs of the works fall below the procedural threshold and
• Transparency and an inability to check costs e.g. on Staff overtime and using false registration VRN number plates.
I find it remarkable the NAO have failed to identify any issues.
FoIA for DCP Rates
In 2017, I made an FoIA request:
“I ask to be provided from 01/07/2014 in respect of Areas with Appendix A to Annex 23 and damage to Crown Property:
1. The Defined costs, those referred to in Appendix A to Annex 23 of the Contract.
2. The Third-Party claims overhead.
3. All information that relates to how the above are to be applied to claims.
4. confirmation that the charge to Highways England comprises:
a. the defined cost (at ’12 above)
b. a fee uplift
The request was deemed vexatious and to support this stance, the Authority compiled a statement with over 300 exhibits setting out the approaches made by multiple people (on whatdotheyknow). The statement of truth identified 175 rate-related requests or reviews between 2013 and 07/2018. I have today placed the statement in the public domain.
To not one of the 175 submissions (above) did the Authority respond ‘not held’. Who is the vexatious party?
I made the approach to HE for DCP rate related information in 2017. The Judges found for me without understanding the Authority were arguing to protect the information they do not hold! I believe the Authority’s stance to be false, that they hold the information.
However, it mattered not what the outcome of the Tribunal was, the Authority was in a no-lose position, I was destined for a pyrrhic victory. The Authority threw money at they approach never once telling the ICO or Tribunal ‘we are arguing over something that does not exist’!
This waste of public funds was never about keeping the rates secret, the intention was to label me ‘vexatious’ to undermine the evidence I collate and present of abuses; exaggeration, fraud and malfeasance.
If the Authority ‘won’, if I was deemed vexatious, my credibility was undermined, they succeed. If they ‘lost’, they simply say ‘no such thing’.
It was in 01/2019, just after they were found against by the Tribunal, the Authority commenced the ‘not held’ stance. However, despite this ‘no such thing’ approach, there is no mention of the situation in the Authority’s Grounds Of Appeal.
11/02/2019, Counsel for the Second Respondent, Highways England makes a submission in which there is no reference to the Authority not possessing the information.
1. Why has the public Authority engaged Counsel at tax-payers expense without disclosing that the arguments were in respect of non-existent information, or if they did, why was this not brought to the tribunal’s attention?
Rather than advise me or the many other requestors (the Authority has documented 175 rate-related requests!) there was no ‘schedule of DCP works rates’, seemingly without informing the ICO, Tribunal, Government Legal department or private Counsel employed, the Authority pressed ahead trying to have me deemed ‘vexatious’.
The Authority employed Counsel and challenged the 12/2018 Tribunal finding. Their appeal was dismissed. Not content 02/2019, they submitted a further series of grounds to undermine the 12/2018 finding. Every ground was dismissed, the Judge writing:
I wish to express my concern that the Information Commissioner was forced to expend resources, which I suspect are less than abundant, on requiring a public authority to do that which it should do as a matter of course, i.e. comply with the law.
2. What has the Authority spent from the public purse not complying with the law and trying to label me ‘vexatious’ rather than say ‘we hold no such schedule of rates’?
a. HE time
b. Government Legal
175 rates related requests or reviews handled and no one was told ‘not held, no such thing’ until the Authority was forced to disclose them by a Tribunal 12/2018. Why not say, from day-one, there is no such schedule?
The answer is obvious; there is a schedule of rates but they did not need to deny this. For years the Authority could shield them using FoIA exemptions ‘commercially sensitive’ or ‘vexatious’. Both fell away in late 2018, the price list was unprotected. Disclosing the rates would expose the Authority and contractors to criticism, identify £millions in state enabled exaggeration and fraud. The only refuge … they do not exist.
3. Has the NAO seen any increase in the Authority’s FoIA staff expenditure since 2013?
The issues relate to a post-2012 process the Authority instigated, the ‘threshold’ approach to claims, not unlike the ‘excess’ you or I may have on a household or motor insurance policy;
• over £10,000 the contractor billed the Authority who paid the invoice and sought recovery.
• Under the £10k threshold, the contractor received nothing from Highways England but was to pursue recovery themselves.
It appears the Authority had a tacit agreement with at least one contractor; whilst there was a process to protect Third Parties (drivers, fleets, hauliers and insurers), ‘Appendix A to Annex 23’, no one would publish or mention this and the contractor could bill what they could get away with.
It also appears no one monitored the data the contractor submitted to the Authority monthly.
In 2015, the Authority sought to convince me they received no sub-threshold information, this was the realm of contractors. I have since learned the contract requires regular submissions.
Above the threshold, the Authority was billed using ‘mates rates’, the correct process; costs plus an uplift. Under threshold, an exaggerated process/rates saw massive profiteering. Whilst the Authority now claims ‘we hold no schedule of rates’, I trust you will understand that not only is this ridiculous, it is also a situation they could change almost immediately; ask their contractors for the rates used to bill on a daily basis. This information is held ‘on behalf of’ the Authority into whose shoes the contractor has stepped.
The Authority and NAO failed to protect the public. Many £millions have been and continue to be strong-armed from Third Parties in the name of the Authority.
Cost Plus (Cost+)
The process that SHOULD have been engaged is simple, equitable:
• Charge the Authority and Third parties the same (cost) per hour to which is added an uplift of about:
• 10% to the Authority and
• 25% to a Third Party
An operative costing about £24 / hour (this comprising salary, NI etc.) should, therefore, be charged, per hour:
• £26.40 to the Authority
• £30 to a Third Party
I am not going to argue the merits (or otherwise) of the uplift differences, I have ignored these, have been prepared to act in accordance with the contractually agreed process. I suspect you are very familiar with this ‘costs plus’ process i.e. the actual cost for something (operatives, staff, plant and materials) plus an uplift. But the charges presented were (are):
• £26.40 to the Authority
• £70 + to a Third Party
This £70 / hour became £105 / hour after 5pm of a weekday and £140 / hour of a weekend by use of 1.5x and 2x multipliers. The contractor claims these are costs incurred, paid to their operatives, we believe otherwise i.e. this element representants a fraudulent claim.
Assuming the NAO looked at any claims, you will have noted the Authority is not charged these uplifts.
4. If no uplift is paid, how is telling Third Parties and the Courts to the contrary other than a fraudulent misrepresentation?
5. What is the Authority doing to address this practice?
Highways England claim to have explained my misunderstandings. I have yet to have the above explained!
Standard rates were only being applied 8:00 AM to 5:00 PM weekdays – 45 hours out of a 168 hour week (7 days @ 24 hours / day). Therefore more often than not multipliers are being charged. An operative that should be charged to a third party at £30 per hour was more often than not being charged at £100 per hour or £140.00 per hour. These operatives, said to work in pairs, the exaggeration was applied to each.
Currently, these operatives are still being charged to Third Parties at about £65 per hour
Highways England now claim they do not possess the ‘costs’ element, it was overlooked. If this were true, 1,000’s of invoices have been paid without the ability to resolve. Is it any wonder contractors have had a field day. All under the eye of the NAO.
It is apparent no one has acted upon contract non-compliance, the false information being provided to the Authority, claim overstatement and fraud. It now appears the Authority, to an extent, looked after themselves by securing a set of reasonable rates for DCP works. I say ‘to an extent’ because whilst they are subject to a low set of rates (used by their contractor) they are routinely overcharged by the addition of items either not utilised or duplicated.
6. What does the NAO know of this?
The Authority abandoned Third Parties (drivers, fleets, hauliers and insurers) to the contractors; enabled and permitted exaggeration and fraud.
The NAO appears not to understand the contract non-compliance and overstatements, have missed it or turned a blind eye. I suspect you too gave no consideration to the sub-threshold (£10,000) incidents; the Authority seemed to be getting the right rates, so what of Third Parties? They were thrown to the wolves and this was for them and the contractors to address.
Possibly, but the Authority kept secret the agreement for contractors to charge ‘no more than’ the sum of an equation, they did not disclose a process that was to see the ‘maximum’ charge reached:
The Authority did not publish the Appendix whereas the rest of the contract appears online. The Authority never spoke or wrote of the process in place since 07/2014 to this day (and still not complied with). The contractor made no mention of the methodology and since day-one, ‘coincidentally’ did not comply with it.
We would be ignorant of the section to this day had the contractor not inadvertently left the Appendix tagged onto the end of their Annex 23 (ability to recover) exhibit at a 01/2017 Court hearing. They have not made this mistake again. A copy of the Appendix appears at:
Appendix 3. Appendix A to Annex 23
I met the Authority 21/06/2017. I explained and evidenced the non-compliance. I described this to KPMG 15/11/2017 (copy transcript here).
To this day the process is not adhered to.
7. What of the contract non-compliant 1153 process employed by Kier from the day the area 9 contract commenced; what does the NAO know of this?
To demonstrate the extent of the abuse Third-Parties suffered and the failings of the Authority and the NAO, I refer you to a historical (2014 to 10/2015) but a pertinent process, that of ‘1153’.
The methodology should never have been engaged (a guide to the process can be read here). It was contract non-compliant and flawed; at the very least, Third Parties were charged five-times what they should have been. The starting price for attendance by Kier Highways was £4700 (the rates used appear here), it should have been less than £1000. Highways England did not put an end to this, we did.
07/2014, Kier Highways had just acquired Area 9 the contract was fresh and included appendix A to Annex 23. Yet from day one Kier Highways failed to comply with Appendix A, Highways England kept it secret and failed to ensure that Kier Highways operated in accordance with the contract.
As of July 2014 Kier Highways charged 3rd parties using their unique process of dividing total attendance and administration costs for the year by 1153, said to be the number of incidents they attended annually. Putting aside the figure for one moment, the process alone, this contract non-compliant procedure, should never have been instigated or permitted to be utilised for over a year. Highways England appear to have taken no action in respect of this. The NAO appears to not have noted, questioned or stopped it.
It was we who ultimately caused the process to be abandoned. – after being subjected to ‘attack’.
8. Why did the NAO or Highways England not notice this and put a stop to it unless due to negligence or complicity?
9. Did the late 2014 audit address above threshold claims only, did the Authority only look after themselves and abandon 3rd parties?
The inclusion of Appendix A In the contract suggests that the Authority was aware that 3rd parties likely required protection, a process to stop profiteering was required.
But what happened next, why did the Authority mindful of such protection subsequently fail to supervise the procedure and show no interest in it? The coincidence of non-compliance and a failure to monitor suggests an implied (at least) agreement contractors could do as they please, to extract as much as they could from 3rd parties.
10. If such an agreement formal or otherwise existed how is the Authority not compromised and what faith can be placed in information emanating from the Authority to Third Parties and the NAO?
Kier Highways were not handling 1153 incidents per annum they were attending about 5400 events, almost 5 times the stated figure. If Highways England were aware this contract non-compliant process was being utilised why did they not ensure the appropriate figure was being used when dividing total costs?
• Why it was a contract non-compliant process permitted to operate?
• if there was any belief on the part of Highways England but the methodology was appropriate why were correct figures not applied
Highways England have been aware that this contract non-compliant process was utilised for over a year and resulted in £millions being inappropriately demanded and recovered in their name
11. What does the NAO know of this
12. What should the NAO know of this and
13. what action has been taken to reimburse those affected; what is Highways England’s exposure to compensation for actions taken in their name, to their knowledge?
In 2013 incident attendance was about £125. Within about 6 months we saw this increase to £1500 per incident. The starting price for an incident attendance as of July 2014 was £4700.
If the process was considered appropriate then, using the more accurate number of incidents attended, 1/5 of that claimed results in a charge of approximately £1000. On every sub threshold claim a third party was being over-charged by about £4000. This is by reference to the division alone and does not take into consideration the Kier Highways were receiving monies from Highways England, from taxpayers, toward these operatives to cover the cost of picking litter, cutting grass etc.
14. What information do you possess about 1153 and the duplication of costs being met out of the monthly lumpsum payment from the Public Purse?
But what of Highways England incidents? Not every claim was for less than £10,000. When billing Highways England Kier did not use their 1153 process. Yet the above threshold claims what part of the total number of incidents being attended by Kier each year.
• How could Kier not understand that the application of 1153, the use of 1153 for the division was wrong?
• how did Highways England, assuming they were undertaking an effective audit, fail to understand but 3rd parties were being overcharged?
• even if Highways England did not understand the cost figures, how did they fail to identify 100% of emergency incident attending staff costs were addressed by the process and that in turn, Highways England was also paying with the very same operatives and plant?
15. Why was the NAO unaware and fail to act?
Kier had divided the total costs of incident attendants and administration by 1153 and for billing 3rd parties in this manner. They had covered all their costs by use of this process, they had obtained substantially (5-times) in excess of their costs.
Yet above threshold, to Highways England, they would present a bill using another process, the contract compliant methodology.
How was the 1153 process other than gross exaggeration? What has been or will be done to reimburse the 1,000’s of Third Parties fleeced in the name of Highways England being reimbursed?
Is it any wonder the Authorly wish me to be silenced and are prepared to try and undermine my integrity to do so, to attack my credibility?
It matters not who presents the evidence, the facts speak for themselves. The conduct has occurred and cannot be undone. The issue is a national scandal.
It will be noted that pre 10/2015, when we brought an end to the process, Kier gushed with data without mention of commercial sensitivity. To further their contract non-compliant, profiteering conduct, they presented great detail. Subsequently, the schedule of rates is withheld.
15/05/2019 Meeting (NAO & HE)
It is apparent your auditor was informed by Highways England that a schedule of Damage to Crown property (DCP) rates exists. In the absence of these, since 2012:
16. how were the NAO able to audit and
17. why was the lack of an important data set (a price list) was not noted.
Upon receipt of your auditor’s meeting note, I presented this to the ICO and a Tribunal as evidence the rates were being withheld. The evidence then passed to Highways England.
What appears to have occurred is that upon receipt of your auditor’s notes of the meeting, the Authority has panicked, cobbled together another U-Turn excuse and presented this to the NAO. I suspect there was some discussion before-hand and that the NAO has been willing to aid the Authority, possibly concerned they would become involved in a criminal prosecution and closer inspection of their conduct.
Third-Party Claims Overhead – % uplift
As detailed above, the charging process to the Authority and Third-Parties should be ‘cost’ plus ‘uplift’. This percentage uplift to be added to base rates was arrived at by use of a calculation, agreed between Kier and the Authority and remained constant throughout the contract.
The ‘instruction to tender’ document sets out the methodology:
18. What was the point of calculating and agreeing to the uplift if it was never going to be adhered to – in Area 9, from contract commencement (07/2014) to this day?
19. Who was responsible for ensuring contract compliance below the threshold, the correct application of:
a. Base rates (defined costs) and
Highways England understand the merits of the above, it fits the process that SHOULD have been adopted to bill Third Parties – the hidden ‘Appendix A’ process, kept secret from the very people who needed it!
21/11/2016, I received an assurance from the Authority’s CEO:
Subject: Your Ref: Kier Highways Ltd (‘Kier’) ref GC\026142 Our Ref: U02A567
Thanks for your note. I also want to ensure that drivers only pay appropriately for the damage they do to Crown property. I’m sure the current process could be simpler and I know Tim and Nick will be working to achieve this. We are certainly putting a lot of effort into reconciling the past costs that you are talking about.
Note: in an attempt to understand the ‘effort’, a FoIA request was made but today has failed to elicit the information – WhatDoTheyKnow / ICO ref. FS50803075.
This ‘lot of effort’ failed to identify the absence of a schedule of rates – which appears bizarre given rates was the issue. But of course, no discovery was made because at that time the Authority could protect the rates using FoIA exemptions. Once these fell away in late 2018, they need to find another means by which to keep them from disclosure.
A FoIA has yet to elicit the extent of the ‘effort’. Indeed, the request has once again been delayed, the subject of prevarication and a ‘vexatious’ stance. The ICO has stepped in but appears not to have received requested responses from the Authority and wrote 06/01/2020 (FS50803075 – signed DN):
The Commissioner is however satisfied in this case that the complainant’s request cannot be categorised as vexatious under section 14(1) FOIA.
The public authority must take these steps within 35 calendar days of the date of this decision notice. Failure to comply may result in the Commissioner making written certification of this fact to the High Court pursuant to section 54 of the Act and may be dealt with as a contempt
21/06/2017, I met with the Authority, I explained my concerns, evidenced the exaggeration and fraud with an example, comparing an above and below threshold claim. It took 5 months before KPMG approached me for information and I reiterated what I had conveyed in person 21/06/2019; unwaveringly because my statements are fact. I have today made the transcript of the conversation, in respect of ‘Project Verde’ available here.
The nearer I got to the schedule of DCP Rates, the more resistance to their release I encountered. The release would identify the misrepresentation, exaggeration undertaken in the name of the Authority.
Contractors, acting in the name of Highways England appear to have no reluctance to mislead Judges. The Authority appears keen to have the Courts consider matters.
ASC Rates vs. DCP Rates (the same?)
I understand the post-2012 contracts (ASC – asset support contracts) contain, or should hold, two sets of rates, two prices lists:
• ASC rates – these are prices associated with pre-planed works, scheduled events such as maintenance or schemes. This work is prearranged, known and an aspect of the contract that a contractor can design into their resource predications. I had no interest in these rates.
• DCP rates – these are prices for the ‘unknown’ or unexpected i.e. emergencies. ‘Unexpected’ is not entirely correct; a contractor will know there are going to be collisions, spills and fires that damage the Strategic Road Network (SRN). They will also have an idea how many there will be (from previous years) but obviously it is far from an exact science. The events may number about the same or proportionally more or less subject to volume of traffic but their magnitude and when they will occur is unpredictable.
For this (DCP) work there is a different price list, the work is said to be more costly. There appear to be grounds for arguing this is illogical, but that is the process explained. DCP rates are therefore higher / different to ASC rates. Importantly, DCP rates are NOT considered ‘commercially sensitive’.
This ‘more costly’ argument is not accepted but my emphasis had been on the base rates used for DCP works, the above & below threshold charges which should be common to both.
I approached you having been advised that no ASC, post-2012 had within it a set of rates. Personally, I believe this to be preposterous. But the Authority have nailed their colours to the mast and to admit to the contrary now could cause them to be subject to a criminal investigation. They have another reason to keep me from the rates.
It appears bizarre that a set of rates was ‘missed’ in every ASC, that when the first bill arrived, no one at the Authority could reconcile it against a price list and every invoice received, 100’s (1,000’s) have been rubber-stamped for payment out of the public purse, unable to be checked. The team pursuing recovery state there is no checking – it is too expensive, as opposed to being impossible due to the absence of a check-list.
20. How was the Authority audited competently in the absence of a schedule of costs for DCP (damage to Crown property) works?
21. Why was this absence not identified?
The obvious answer is that there was nothing to identify; rates were present, it only became necessary for them to be imaginary when they could not be kept from me by other means!
Are ASC & DCP rates the same?
I suspect the Authority and contractors are again working in unison to present this ‘DCP works are more expensive’ approach, to justify higher charges. However, the more I have reviewed above and below threshold rates, the rates used by other contractors and considered the NSoRC schedule, the more it appears there is a further deception or distortion at play.
My suspicion is that DCP rates to the Authority, the base rates that should be used when billing a Third Party, are actually the same as ASC rates. In turn, the Authority is crying ‘commercially sensitive’ in respect of ASC because they are aware of this.
This would also account for the semantics associated with trying to obtain a set of DCP rates; the Authority claiming ‘no such thing’ because there has never been two schedules, just the one – ASC rates and that these are used to bill the Authority for scheduled (ASC) and reactive (DCP) works.
22. Why would an operative, for example, a Traffic Management vehicle driver, or barrier repair employee, demand more money if they were working on a scheme or attending an emergency? They are paid a salary, likely shift workers, paid flat-rate overtime.
There may be costs to the contractor or Authority if an operative is pulled off of scheme works to attend an emergency repair … but how often does that happen? According to the Authority’s General Counsel, seldom; the majority of costs would fall to ‘planned’ activities.
A vehicle, a piece of plant, is similarly (less) likely to demand a high cost because it is attending to an unscheduled repair as opposed to a planned improvement.
There may be planning costs to recover following an emergency incident, but this is addressed in the TPCO percentage (above).
23. What does the NAO know of these schedules; is there a difference between ASC and DCP rates and if so
The operatives I commonly cite for examples are Kier’s AIW’s, Asset Incident Watchmen because they are the ‘first responders’ to emergency incidents i.e. they appear on each claim, I possess much data about them. They are employed to attend incidents, as first-responders, but also cut grass, pick litter and fill pot-holes. They undertake many tasks.
In 2016, Kier was seeking £70.32 / hour for an AIW and disclosed the components making up the rate as follows:
1) Wages & Salary £18.30
2) Bonus & Incentives £7.38
3) specialist allowances £0.01
4) absence due to sickness & holiday £0.96
5) Travel £0.09
6) relocation £0.01
7) medical examinations £0.03
8) Protective clothing £6.52
9) N.I. £3.85
10) meeting legal requirements £0.17
11) pensions and life assurance £1.26
12) general training £9.82
13) Safety training £0.52
14) Water £0.03
15) Gas £0.02
16) electricity £0.18
17) consumables for vehicle £9.17
sub total £58.32
third Party Claims overhead £12.00 @ 20.58%
I believe the above to be false figures presented by Kier, but they give an indication of base rate cost compilation the process.
25. What in the above is affected by what the AIW is doing; attending an emergency or cutting grass (as examples)?
In 2016, Highways England was paying £23.71 / hour for an AIW attending an incident?
26. Did they pay less for the operative when they were cutting grass and if so, why?
I cannot help but mention Kier’s curious business model; buy high, sell low. An AIW apparently costs them £58.32 / hour. They charged the Authority £23.71 plus 6.5% fee uplift.
04/01/2019, Highways England’s CEO and I spoke about AIW’s, he guessed they were paid about £10 or £12. For the Authority to have them on shift and be paying £23 an hour 24/7 with a 5% uplift or 4.7% uplift on that 24/7 cover, did not surprise him, did not seem to be unreasonable.
We agree. What is unreasonable is for Third-Parties to be charged substantially more and for the Authority, aware of the issue, to stand by and permit it to continue.
27. What do the NAO know of these issues which we have been presenting to the Authority for years?
15/05/2019 NAO & Highways England Meeting
Having written to you (16/04/2019), the Auditor set about arranging a meeting and the day after (the conversation fresh in his mind?) wrote to me and the extract relating to DCP Rates is as follows:
- Based on the information you supplied, we made inquiries with Highways England.
- The company explained that they have two main maintenance contract models in use:
- the original Asset Support Contract (ASC), which is in the process of being phased out and
- replaced with the Asset Delivery model (AD).
- In the former contract model, a schedule of rates is included, and this should be used as the basis for the calculation of costs for claims above and below the £10,000 threshold.
- The company also explained that individual claims may differ due to differences in each incident, and due to differences in the schedule of rates specified in contracts between areas.
- Internal challenge of any costs above threshold are based on regional knowledge and an understanding of what is reasonable to claim.
- Highways England has confirmed that they have conducted their own review into how their contractors have applied the ASC contract specifications in relation to damage to Crown property.
- I have been told that where non-compliance was identified, Highways England has held discussions with the relevant contractor and ensured that the issue has been rectified.
- However, Highways England has also told me that it recognises the potential inconsistencies that the ASC contract specifications presented.
- I have been informed that as part of the introduction of the new AD model, Highways England has worked with the insurance industry and its supply chain to develop a national schedule of rates, and that this is being trialled over a three-month period across several maintenance areas, with a view to national rollout thereafter.
The Auditor (Matt Kay) appears to be the only person keeping a note of this meeting with the Authority. A copy appears here:
Appendix 4. NAO meeting note
It is difficult to convey my concerns without being accusatory, questioning your auditor’s integrity. It appears the auditor has maintained an accurate note of events, that he acted appropriately and pursed the issue I raised; DCP Rates.
There is no mention of ASC rates in his note because this was not an issue, they were irrelevant … just as there is no mention of any other aspect of the Authority’s work. The Auditor arranged a meeting armed with my concerns and set about trying to address them. He kept a note and he kindly reported back to me; effectively I need not be concerned, there exist schedules of DCP Rates. Of course there are.
28. Possibly the auditor responsible for the authority should not have ‘investigated’ but an independent party considered the matters I presented?
I do not know whether, when arranging the meeting, the auditor explained to the Authority beforehand the purpose. I have not been provided with any indication this was the case, my SAR and FoIA failed to elicit any information. However, it appears reasonable to assume the Auditor made contact and did so such that the Authority knew the purpose of the meeting; the query was DCP rates.
29. I would appreciate any information you can provide about this aspect.
The Authority sent the appropriate representative, a manager known to me (Sharon McCarthy), involved in the KPMG audit of Kier i.e. very familiar with the concerns I had raised, my conversation of 15/11/2017 i.e. a manager was sent who was familiar with the allegations of exaggeration and fraud in respect of DCP works.
I do not know if my name was mentioned during the meeting. I note no reference to me and suspect not.
30. I would appreciate any information you can provide about this aspect.
It appears that, because the Authority manager was unaware who was behind the complaint when dealing with the NAO, she was forthright, accurate answers to questions were given and recorded in the note (attached). In turn, unaware these answers would find their way to me, the manager addressed the concerns I raised (nothing to do with ASC rates) and your auditor accurately recorded the answers.
• I believe, if you read the auditor’s note (attached) you will conclude that the issue being discussed can only be DCP rates; DCP rates were raised and the answers related to DCP rates and accurately recorded.
The note is brief and there is no reference to ASC rates for pre-planned works – yet seemingly ASC was what the Authority manager was talking about – at least this was subsequently claimed by the Authority manager who challenged the record once it was known to be in my possession.
In effect, if Highways England’s manager is correct, if the conversation was about ASC rates, the problems I alerted you to were never aired!
31. When will the complaint I raised, sufficiently important to arrange a face to face meeting with the Authority, be addressed?
14/05/2019 Minutes – Appendix 4 (above)
Your auditor has not simply recorded that there is a schedule of such rates, he records the detail specific to DCP Rates. Mention is made of the contracts ASC and AD (Asset Delivery) but the auditor presented the concerns in my submission; summarised them i.e. presented the DCP costs issues and that there was NOT a set of rates. My complaint of 16/04/2019 (Appendix 1) was clear:
The following ‘confession’ from Highway England explains that they have no schedule of costs they are to be charged for the repairs following damage to crown property (DCP).
I cited the Authority:
As none of the ASCs contains 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 the threshold it was considered that a review
covering all areas was required.
It was my writing (with more detail in Appendix 1) that gave rise to the meeting. It was the absence of DCP rates that were to be discussed and addressed.
Your auditor did not raise ASC processes but ‘DCP claims’ seeking a ‘summary of the situation’. You would have me accept that having summarised the situation the auditor was given information about a completely different (?) set of rates and recorded information relating to ASC rates, pre-planned works, whilst repeatedly writing in respect of claims and costs?
You auditor has written:
a) ‘With respect to claims for Damage to Crown Property (DCP)’
The above is specific; DCP Rates. The conversation was about damage and repairs, nothing to do with the pre-planned works.
Additionally, your auditor records:
b) ‘there is a threshold of £10k below which the service providers pursue the third party to recover costs.
The above does not occur with regard to ASC rates. The process described is correct and relates to DCP works. The discussion was about a threshold – what threshold in ASC rates? What Third Parties are involved in ASC pre-planned works. None!
c) Claims above £10k are submitted to HE by the service provider and are dealt with internally by the Green Claims team.’
Again, the above does not occur with regard to ASC rates. The process described is correct and relates to DCP works. There is a reference to the Green Claims team … who have no dealings with ASC rates. ‘Green Claims’ is a team that pursues claims the Authority makes against Third Parties, unconnected to ASC pre-planned or scheduled works.
d) ‘In submitting the claims to HE, the service provider pulls together a cost pack which summarises the different cost elements – how many staff were required?’
‘Claims’ are mentioned; these follow DCP, they are not relevant to pre-planned works.
There is a cost pack – this is about compiling the evidence to present to a Third Party against whom a claim is being made, the TR430 cost pack. The note refers to:
e) ‘What was the extent of the damage?
f) What was the cost of repair?’
‘Damage’ and ‘repair’ are cited. These are claim situations, damage to Crown property activities and unrelated to ASC rates or activities.
g) HE’s relevant regional team assesses the cost pack for reasonableness and challenge. Once they have done this, the claim is sent to the central green claims team who pursue the third party.’
Costs are assessed. These costs relate to a ‘claim’ to be pursued against a ‘third party’; not a process remotely similar to billing for pre-planned works. Clearly a DCP event and in turn DCP rates.
Green Claims team is cited; these group of Authority employees handle DCP claims, claims against drivers who cause damage to the SRN. This is unrelated to ASC rates, to pre-planned works.
h) ‘ASCs include a schedule of rates – these should be used as the basis for the cost pack (for claims both below and above £10k).’
There you have it – ASC’s include a schedule of rates. But not just any set of rates, these are for claims. There is not one mention of ASC, pre-planned or scheme works in the note.
It was also explained to your auditor, as per his note (extract above) these claims should be the basis for claims ABOVE and BELOW the £10,000 threshold.
The ASC has no such threshold.
32. I trust you will explain every statement above, the lack of reference to ASC rates and multiple reference to DCP processes, in terms that I can understand and clarifies what occurred such that your auditor not only recorded erroneous information not relayed but was so confident in his record that he conveyed it to me.
33. Does your auditor intend to stand by his post-meeting change of heart and continue to present that his original record relates to issues I had not raised and which the Authority claim they alone were addressing (despite having been asked about DCP matters)?
Just where was his mind and hand (taking notes) when the Highways England manager was apparently conveying information about ASC rates, the costs associated with scheduled works and the pricing of same, yet he was recording information that went unmentioned?
The Auditor appears to be the only person taking notes. So confident of these was he that I was initially sent a letter explaining the meeting/conversation. Noting the Authority had U-turned (again) and admitted to the existence of a schedule (and described its application), I asked to see the note. Once this was supplied, about a month later, I presented the contradiction.
Highways England wasted no time responding to the NAO; you were mistaken. The Authority’s manager had no record of the meeting, no minutes but a month later recalled that the subject the NAO auditor recorded notes about was nothing to do with what I had raised and he had written.
It appears the Authority manager was confident this account would be supported without question by the NAO.
The NAO auditor agreed with the Authority; his minute of the meeting was worthless, untrue – he had written about something the Authority never commented upon. He had spent time (however long) at a meeting intended to address my ‘complaint’ (attached) but gone off at a tangent.
I believe your auditor needs to reconsider his conduct. He appears damned if he sticks by his notes, damned if he does not.
34. I certainly expect to have explained how the auditor:
a. was unable to address my complaint, has to this day failed to do so and
b. has a record of events never discussed!
I trust you understand how inexplicable I consider this situation and in turn why I have trouble with the gentleman’s truthfulness.
This is why Highway England are desperate to hide the rates:
• The contractually agreed process is not followed. Appendix A was not complied with by Kier from day-one and is not to this day
• Kier Highways do not use the schedule of DCP rates that are engaged when billing the Authority below threshold. Third Parties are subject to a higher set of rates as yet unexplained, undisclosed
• Ker Highways will misrepresent facts to use and the Courts to recover the costs in the name of Highways England
35. Why have your audits failed to identify the issues
Even if there were no set of rates (which I do not accept) the fact remains:
- Kier Highways have not complied with the contracted process since 2014
- This is obvious, Kier used ‘1153’ immediately, a contract non-compliant process
- 10/2015 Kier implemented a new process – a change would not occur if the contract was complied with
- Kier Highways have exaggerated claims
- Kier Highways have claimed for costs not incurred, added uplifts to already overstated rates
- Highways England were made aware of this 21/06/2017 (I met and presented this in person)
- Highways England has permitted Third Parties (drivers, fleets, hauliers and insurers) to be fleeced for years- 1,000’s of claims, £millions
36. Has the authority ever brought my concerns to your attention and if so, when?
False Cost and / or Recovery Data
Kier Submit False Cost / Recovery Information to Highways England
A further issue is that Kier Highways are presenting false costs to Highways England, giving the impression they are recovering less than cost + fee
The Authority repeatedly say they hold no sub-threshold data, that they must request this if required. If so:
• Their witness misrepresented this to a Judge claiming figures were submitted monthly
• The Authority are not complying with the contract; a FoIA reported figures were submitted monthly.
But what figures are Kier providing to Highway England? The example I pursued identifies falsification. It appears the NAO never identified this and Highway England has (still) failed to act upon the information.
37. Why are Kier presenting exaggerated figures for costs to the Authority, what do they gain?
38. When did the pain/gain share associated with DCP works commence and cease i.e. the costs and recoveries process that could affect the monthly lump sum payment, possibly referred to as a ‘compensation event’ or similar?
Please do not refer me to the Authority, they have already provided contradictory information and my having to report to a formal process (FoIA) again, has led to another breach of the law as demonstrated at ‘Pain / Gain Share Arrangement – DCP – Clarification‘.
• 01/10/2019 – request made via WDTK
• No response, no reference
• 30/10/2019 IR request
• 27/11/2019 chase IR
• 22/01/2020 no response, no reference – to ICO
The pain/gain process was in place, this is acknowledged by the Authority. Further information about this can be found here:
Appendix 5. ICO report re Pain / Gain share
My concern is that the Authority for the SRN is compromised to such an extent that it is ineffective. I question the extent to which the Authority is beholden to its contractors and in turn the implications for such projects as smart motorways and HS2 (as examples).
I have also noted, recently, Kier Highways about whom I have raised numerous issues, are currently the subject of a costs investigation – ‘Highways England probes Kier smart motorway jobs‘.
A large Public Authority with no control over its contractors and lawyers, desperate to see the back of me, to have me silenced, possibly hoping their NSoRC would create a distraction or cause the inappropriate conduct to be a thing of the past.
39. Why has the conduct not been halted?
Your auditor’s note continues to address DCP matters:
i) ‘There is an expectation that elements of costs within different claims should be the same, but it is often not the case. Individual claims differ due to different schedules of rates between areas, and because every incident is different.’
Again, unequivocally – ‘schedule of rates’ is recorded and reference to claims. This time, there is not simply conversation about the existence of rates and how they are applied, the auditor and Authority went into some detail about how these charges could differ for Area to Area for ‘Claims’ and ‘incidents’; unequivocally a record about DCP works and the pricing of them.
However, whilst the pricing of a claim will differ from Area to Area because contracts were entered into in differing years, different contractors are engaged, that ‘every incident is different’, is a red-herring.
Reference to ‘incident’ again reinforces the subject under discussion, DCP Rates, but whilst every incident is obviously different, this does not affect ‘rates’. It will affect the cost, the ultimate bill but it does not affect the cost of something, its hourly rate. A small incident may involve an operative for an hour at £20/hour, a large incident, 8 hours … but still at £20 / hour.
40. What was discussed and recorded about ASC rates; what aspect of the auditor’s note relates to the subject the Authority spoke of (it all appears to be about something the Authority did not mention!)?
The memo’ continues:
j) ‘HE performed their own review into the service providers’ application of the contracts to these claims. HE concluded that costs claimed were reasonable, but that improvements could be made. [s.40(2) redaction], assured me that these improvements have been made.’
Yet more references to claims and the costs associated with same.
41. How did your auditor learn of this ‘review’ concerning ‘claims’ and the outcome, if not disclosed by the Authority at the meeting?
As this was not conveyed at the meeting, your auditor presumably learned of the assessment by some other means. Please explain this – if necessary, consider each and every one of my requests as being compliant with a Freedom of Information Act application.
I believe the Authority’s ‘review into the service providers’ application of the contracts’ is the KPMG audit. I note the result was ‘HE concluded that costs claimed were reasonable’. This is very different from saying the costs were applied in accordance with the contract, as Ms McCarthy conveyed at ‘g’ above.
42. Are the costs being applied in accordance with the contract?
I can demonstrate the process the Authority describes at ‘g’ above is not complied with, I did so 21/06/2017, which gave rise to the KPMG audit. I refer you to what I presented to Mrs Green, conveyed to KPMG and have presented online from the links referred to above to ‘Kier Highways Alert – Systematic State-Enabled Exaggeration’.
We are talking about tens of thousands of claims and £millions in overstatement, charges presented in the name of Highways England that were exaggerated.
The minute continues:
k) ‘HE is phasing out ASCs and replacing with the AD model. As part of this, HE has worked to develop a national schedule of rates in consultation with supply chain and insurance industry. ‘
The ‘national schedule of rates’, the NSoRC relates to DCP works, it is a National Schedule of Repair Costs following damage. The Authority was said at the meeting, to be working with insurers, not something they do when addressing pre-planned works. This too has nothing to do with ASC rates.
Kier Highways agreed with the Authority not to issue any invoices from 01/2019 until the new process (NSoRC) was in place.
43. Why and what do you know of this?
Clearly an issue was identified.
We have seen some claims presented by Kier (who manage Area 9) utilising NSoRC. It is evident neither the contractors nor Green Claims (@ the Authority) understands how to apply the process. The process having failed, Kier has reissued invoices, we now see yet another contract non-complaint, unreasonable, process implemented with even higher charges being applied.
On the one hand, we are told we can expect to see ‘actual costs’ (see below and that the NSoRC are ‘eminently reasonable’, on the other the substituted rates are substantially higher i.e. unreasonable.
It is apparent Highways England have lost control, that the tail wags the dog.
The process was instigated 24/06/2019 and we were speaking to the Authority, with detailed knowledge and understanding about the schedule just 4 days later. On 04/07/2019, we spoke for almost an hour with the Authority’s General Counsel and NSoRC team members. It was evident the right hand did not know what the left was doing, there was to be no transparency and the rates were to be forced upon everyone without an understanding of the environment, issues or remedy.
The response provided by the Authority to your auditor about NSoRC, the month before its introduction, relates to claims, to DCP rates and the associated process. Claims and the associated rates were being discussed at the 14/05/2019 meeting, not ASC and this is further evidenced by the paragraph:
l) ‘This will be consistent across all areas, and AD contracts are robust in prescribing the use of these rates in both above and below threshold claims. HE has expanded their internal green claims team and has changed the internal processes to support this; the cost packs will be scrutinised by the maintenance and renewals team who have the relevant knowledge to challenge costs effectively.’
As the Authority explained to your auditor, a set of rates exists, hence he recorded this.
Having been advised the Authority was in the process of establishing a new process, the NSoRC,
44. what questions did this cause to be raised, what enquiry occurred, for example:
a. what changes to the contract were required
b. how would this affect the pain/gain arrangement
c. WHY was the NSoRC required?
The national schedule has nothing to do with transparency or providing insurers with the benefit of rates Highways England has managed to secure. This is presented in an attempt to have insurers buy into the process. NSoRC has failed due to the lack of transparency and because the rates are being kept secret – there appears to be overcharging and opportunity for duplication.
The national schedule has been introduced because Highways England has problems, for example:
• with the new AD contracts, the contractors will no longer be pursuing subthreshold claims. Highways England will need to present the evidence and if necessary appear before the court.
• the Authority is currently recovering £1 in every £5, it is desperate to increase this
• handling claims is labour intensive and the Authority is taking in house thousands more claims.
• the Authority is short-staffed with even their green claims manager role undertaken by the current red claims manager
• It appears their contractors are unwilling to help by providing information and assistance
Highways England is having difficulty keeping both 3rd parties and their contractors satisfied. Having long permitted contractors to do as they want to overcharge sub threshold, bringing all claims above and below threshold into the Authority will enable much greater ease of comparison for the likes of us.
Highways England need a process that is efficient. The national schedule is primarily for their benefit.
We suspect the national schedule failed because contractors were struggling to profiteer.
I have asked the Authority more than once “why was the NSoRC required?”.
If you review the above and our writings on the subject you will find that we have only ever sought to settle claims against Third Parties by reference to ‘reasonable costs’. We are not unreasonable people, we understand damage must be repaired and liable parties should pay for this. We wish to resolve the matters promptly, amicably.
Highway England has not answered the question, save for what they have placed online:
‘It has been apparent for some time that insurers consider the pricing of Green Claims in individual cases to lack transparency’
It has been evident since at least 2016 when the Authority’s CEO commented upon the lack of transparency.
‘Transparency’ is a hackneyed word, used for effect without any assurance it will be addressed (see below). There is no desire on the part of the Authority or its contractors for clarity, transparency.
04/07/2019, I asked the Authority (regarding the NSoRC):
it’s simply that when I’ve looked at this new process, I’m looking at this and thinking, my initial reaction was, ‘Why do you bother?’
You know, you have a perfectly good system in ASC, the fact is you’re not using it because, well, the fact is it’s not being complied with. Under an ASC we have defined costs, we have the base rate to which you add an uplift, what could be simpler than that, than the schedule of component parts to which is added an uplift, 8% to you guys or 7.41%, and then 25.29% as a maximum to us?
You know, the system is very simple, the old system is very simple,
Highways England believed the issue was the current system. It is not the system, it is the selective application of it and the misrepresentation that follows. The system is applied above the threshold to Highways England but it is not below threshold to Third Parties. To ensure recovery of overstated, fraudulently presented claims, contractors, in the name of the Authority must misrepresent the facts to Third Parties and the Courts.
I explained this:
“I think you’ve misunderstood.
that’s not correct, and I’ve, I’ve looked at what you’ve written, what you’ve put online, and again this comes… It comes from the wrong perspective. There are, there are two processes under the ASC which are under £10k and over £10k.
a. Under £10k the issue has not been transparency with regard to the work that’s been done but it’s transparency with regard to the rates and how they’ve been calculated and the fact that they’ve not been applied in relation to the contract.
b. Over £10,000 the problem we have, or what we’ve sought to do is to confirm you’ve applied the right rates, those appropriate to the date and time.
The problem you’ve got over £10,000 is the cock ups, for want of a better word, by your contractor in billing and the duplication of charges, incorrect charges because they’re rubber stamped for payment.
It’s the process thing, I believe, with Highways England that they need to get right but which I’ve effectively been told is, is too, too costly.
So, coming at this from a, ‘it’s the rates that is the problem’ is not entirely correct. Below £10,000, we know what the rates should be, they’re just not used and there’s intransience and obstruction to stop us making sure the appropriate payments are made. Over £10,000 the issue is your end, this is, my understanding, from my experience, and that is you’re paying too much.”
My comments fell on deaf ears. I suspect this is because the Authority wished to move to ‘composite’ rates; lump a number of tasks together and fee. This was peculiar, they appeared pleased Kier had come away from this process in 2015. Composite rates do the opposite of providing transparency, they provide a screen behind which to hide.
I was assured of being provided with the construction of the composite rates, of the resources allocated and the rate being used for each. This was not forthcoming and I again had to resort to FoIA to obtain the components of the NSoRC composites. The rates used have been withheld and I have found it necessary to progress this to the ICO … again!
Your auditor is aware, 31/10/2019 the process was suspended, it was flawed. This despite endorsement by the Authority’s CEO and General Counsel. We raised numerous concerns, identified various failings and suggested some remedies whilst highlighting potential pitfalls with creating a new process.
Our suspicion is that the NSoRC did not allow for sufficient exaggeration by contractors, that they had the plug pulled on it and the process.
45. What do the NAO know of this?
However, we raised areas of concern, of a potential overstatement. One obvious area of duplication was presented and we have expressed concern about this to the Authority.
With the AD contracts, Highways England is taking everything in-house, they will pay contractors and seek recovery. I doubt the Authority really wish to be faced with challenges on aspects where there is duplication, no entitlement. But this will occur.
16/05/2019, your auditor wrote:
Nevertheless, I do recognise the potential for issues of comparability and transparency might arise in the pre-reform environment you are describing and have considered the adequacy of Highways England’s response. The course of action Highways England are proposing towards a single transparent schedule of rates, and including additional consultation with relevant parties, seems to me a sensible way forward based on the information available. I would encourage you to engage with this on any matters of relevant detail as consultation progresses.
I also, despite our decision not to perform detailed investigation in this case, propose to follow up with Highways England in six months to assess the implementation of the new schedule of rates, as part of our ongoing audit work.
There has been no sensible way forward.
03/06/2019 your auditor wrote:
Pending our follow-up in six months’ time I suggest liaising with Highways England about the other concerns you raise.
46. Please advise the results of any and all follow-ups, all exchanges with the Authority in respect of rates and their attention to these.
Whilst you refer me to the Authority, it must surely be evident they are not responding, not even to formal approaches.
The NSoRC page carries the statement:
What happens next?
We will revert to pursuing claims based on the actual cost of carrying out the repairs and will continue to explore options for a transparent and equitable set of rates.
The Authority would have us believe pre NSoRC, before 24/06/2019, claims were presented using ‘actual rates’. Really?
47. How do they know this and what do the NAO know of this?
At the above link the Authority has written:
Contracts between Highways England (and in the past the Highways Agency) and maintenance contractors have often referred to the basis of recovery as “actual” or “defined” costs.
We do not have schedules of rates for the unplanned/emergency repairs specified in those contracts.
If the Authority has no schedule of rates for DCP works, how do they know what ‘actual rates’ are? The answer, I suggest, is that they do have a schedule of rates, a price list for ASC rates and that these are what is meant by ‘actual rates’, it is these that are used when the contractor bills the Authority but it is not the rates the contractor wants to use when billing Third Parties.
48. Is this your understanding, is this correct?
Highways England explain:
To address this, Highways England introduced a National Schedule of Repair Costs as a means to pursue typical claims on the basis of estimates rather than actuals.
If the Authority does not have ‘actual’ rates it appears they will encounter difficulty substantiating their return to ‘pursuing claims based on the actual cost’. However, they have estimates – from what? Let us have those.
Whilst the Authority intends to revert to using ‘actual costs’, they appear to have a problem, stating:
The “actual” costs of repairing a specific item can, in practice, be difficult to isolate and quantify (hence the potential for inconsistency referred to above)
But their contractor know the actual costs or base rates.
49. Why has the Authority not sought these from the contractor?
The Authority add:
This lack of transparency led to concerns in the insurance industry that drivers and insurers were not being correctly charged for repair
I refer you to my conversation with NSoRC (above); I explained they have misunderstood. It is evident they either are not listening or do not like what they heard. The issue is a lack of compliance with the contract, a failure to use the rates we are aware of and the absence of honesty.
Lack of Transparency
Transparency, in a business or governance context, is honesty and openness. Transparency and accountability are generally considered the two main pillars of good corporate governance.
The Authority has known of these abuses for years. They cite ‘transparency’ without any understanding of its meaning or intention to address the situation. It is a hackneyed word.
- In 2014, an audit of Kier found no approved methodology and an intention to address this was recorded.
- 2016, the Authority’s General Counsel was aware of the rates schedules and was apparently part of the ‘effort’ put into addressing the issue.
- 2017, I met HE (21/06/2017) and presented the issues evidencing exaggeration and fraud with documentation.
- The issues were considered sufficiently serious that they warranted the appointment of KPMG to ‘audit’. I have yet to be provided with the outcome of this and am forced to progress via FoIA 25/11/2019 , ‘ Investigation of Area 9 & Area 10 DCP Rates’.
- The Authority has failed to responded within the statutory 20 working days and I have sought an Internal review.
- 02/2019 the Authority’s CEO said to me:
“You know, you know the very minimum that is going to happen as a result of this call, or certainly as a result of the judgment is that we will have a schedule of rates published by Kier, so that this thing is transparent”.
“… this is going to be a fairly formative conversation with Kier and potentially with Balfours. As I said to you, the minimum we’re going to get to is a published schedule of rates and we’ll get this Appendix A Annexe 23 with its rates. I’m not happy with the uplifts, what I can do about them is a moot point but we’ll um…I’ll certainly be raising that”
I continue to await the schedule of rates and believe it reasonable to assume there is no intention to supply same. I have been forced to make a FoIA request for the information about rates and the meetings.
When compiling the National schedule the Authority informed me that they have looked at area 9 damage to Crown property rates and about 100 settled claims. Yet to date they have failed to provide the evidence in support of the rates presented. I have been forced to revert to the Freedom of Information Act . Even this has not caused the disclosure of the information sought and the issue is now with the Information Commissioner’s Office.
The Authority has also posted:
We will be actively pursuing the settlement of older claims too, as there has been a slowing of settled claims creating a sizeable a backlog of outstanding claims and monies owed to Highways England.
This also appears to be an issue for the NAO to consider. We have claims dating back to 2014. We have numerous claims in respect of which we have written to the Authority and received no response or been advised they are awaiting information from their contractor. In one instance, we have waited over a year.
It appears the Authority is unable to obtain information from their contractors with one Green Claims handler having to obtain a ’favour’ to elicit a reply. In another instance a handler has assured us he has been seeking information, whereas another advised there is no sign of this occurring.
50. What backlog is the NAO aware of and what has given rise to this?
It appears the Authority’s Green Claims department is unsupervised and unable to cope. In 2017, a new head of claims was appointed, whilst also the manager of the Dart-Crossing they left Highways England about a year ago. Another manager has left. The current head appears to have been recently appointed to cover Green Claims whilst managing Red Claims.
Having spoken with contractors it appears they are less inclined to address Authority questions now that the claims handling and staff have been taken from them with one commenting; why would I, who is going to pay for this?
It appears that, due to the contractors not responding, the Authority has been unable to progress claims. A recent development is Highways England’s employment of a private firm of lawyers. This is obviously a matter for Highways England save that it potentially affects the public purse, subject to the remuneration arrangement.
The choice of Knights is encouraging as we are familiar with the company, have a good relationship with them and anticipate they will be reasonable.
• what reflection is the appointment upon Highways England
The Authority acknowledges they have substantial historical monies owing to them. It appears there is a serious failing.
Highways England Operating Income
I raised my concerns with the NAO as it appeared implausible, bizarre, such a major part of a contract, the price list, was absent. More so because I was aware, in Area 10 (the first ASC) rates to Third Parties were discussed pre-appointment of the contractor and a set of rates agreed (as explained to HH Godsmark).
Furthermore, I questioned how Highways England could be meaningfully audited in the absence of a schedule of rates used in 100’s if not 1,000’s of above threshold claims.
Highways England play down DCP events and costs however, it appears to represent a substantial part of its operating income:
51. how are ‘recoveries from Third Parties for damage to the SRN accurately considered, assessed and reported upon if, as the Authority now claim, they have no schedule of rates to reconcile bills against.
The conduct I have explained may appear to be complex but resolution is simple; have contractors comply with the process they signed up to, the contractually agreed Appendix A to Annex 23, the use of clearly displayed:
• common base rates to Third Parties and the Authority
• applied uplift
52. what is wrong with this?
As for the schedule of rates, if the Authority does not posses one, they need only ask their contractor. If the Authority cannot find a schedule, they are held on behalf of the Authority the ‘provider’, used to bill the Authority daily and likely could be produced at the press of a button.
53. Why are they being withheld if not to hide dishonesty; exaggeration/fraud?
We have provided a set of DCP rates here.
We wish to be provided with the schedule of rates for Area 10, the price list Mr Ellis referred a Judge to. The Authority is being intransigent and once again, the ICO is involved (Tribunal Appeal EA/2019/0390).
There are schedules of DCP rates, your auditor was provided detail about these and their application. It is of serious concern that, at the suggestion of the Authority, your auditor would complete a U-Turn and undermine his comprehensive minute; pertinent and accurate in respect of DCP Rates. I have produced his letter of 09/12/2019 here:
Appendix 6. 09/12/2019 Auditor Explanation (Response To Complaint)
I also attach my response, being particularly concerned about the ‘half sentence’ quote, at:
Appendix 7. 11/12/2019 to NAO
3/12/2018 A Tribunal’s finding; NOT vexatious but that the Authority’s conduct was lacking:
SERIOUS PURPOSE: ‘We have considered the motive of the requestor and in particular his detailed Reply and exhibits. These submissions supported by the documents provided and annexed have persuaded us not only that the motive of the requestor had a serious purpose and arose from genuine and informed concern but had significant value with a high degree of Public Interest.’
PROPER USE: On the evidence before us we could not find the request were manifestly unjustified, inappropriate or an improper use of FOIA.
NO HARASSMENT: Again looking at the evidence before us we do not accept that there could or should have been any harassment or distress (of and to staff) in an organisation of the size and import of the second respondent in this appeal. They were of such a scale that the important information sought by the Appellant should have been within their capacity to process without causing harassment or distress.
AUTHORITY INADEQUATE / INACCURATE RESPONSES: We find that the failure to recognise and process the requests was principally caused by inadequate or inaccurate responses by the personnel within Public Authority.
NOT UNREASONABLE: we find this to be the cause of what came to be described as “Obsessive behaviour” on the part of the requestor, which in our view, in all the circumstances was not manifestly unreasonable.
AUTHORITY PROVIDES WRONG INFORMATION: We have been persuaded that he (Mr Swift) has received erroneous information.
‘Amongst other issues he requested information on three issues his business is concerned which include;
• One of the contractors was inflating their costs on a scale arguably amounting to fraud;
• Costs are different according to Third Parties being billed directly on the basis that the costs of the works fall below the procedural threshold and
• Transparency and an inability to check costs e.g. on Staff overtime and using false registration VRN number plates.
We are satisfied his requests on these issues would have taken forward these matters which were worthy of investigation.’
04/10/2019 Highways England appealed to the upper Tribunal; every ground was rejected.
The Judge concluding:
I cannot leave this application without observing that, if the present matter is as important to Highways England as their application for permission to appeal suggests, I am perplexed by the way in which they engaged with the Information Commissioner’s investigation into Mr Swift’ s complaint.
Since Highways England did not respond to the Commissioner’s requests for observations, she was forced to take the (in my experience) unusual step of serving a statutory information notice on Highways England (p. 190, vol. 3). I wish to express my concern that the Information Commissioner was forced to expend resources, which I suspect are less than abundant, on requiring a public authority to do that which it should do as a matter of course, i.e. comply with the law.
I also note that, when Highways England responded to the Information Notice, their response took the form of about 1/2 a page of written representations. If on reflection, Highways England considers that their engagement with the Commissioner did not serve their interests, I would be inclined to agree with them.
The request for DCP Rates was made in 25/07/2017, since which Highways England has:
• previously said ‘HELD’ 15* times
• undertook Public Interest Tests
• accounted to the ICO
• 28/03/2018 involved the ICO making a decision fs50703446 – upholding the Authority
• on receipt of an appeal, appointed Government Legal Department (GLD)
• incurred the cost of Counsel
• 13/12/2018 monopolised a Tribunal’s time – which rejected their position – NOT vexatious
• appealed to the Tribunal
• Permission to appeal is refused – Swift, Philip EA.2018.0088 (190219) PTA Ruling
• Highways England appeal to the Upper Tribunal
• 13/09/2019 – appeal refused on every ground: Decision
• 11/2019, capitulated and accepted the Tribunal’s findings
• Surely the Authority will not claim that they do NOT hold the rates?
Curiously, it is only since the Tribunal finding of 12/2018 and the 11/2018 removal of their ‘commercially sensitive’ exemption at another hearing, the Authority has stated ‘not held’.