220323 Appeal Regarding Birmingham City Council’s Refusal to Release Rates

Are Kier Highways Ltd (‘Kier’) charging BCC and Third parties (drivers, fleets, hauliers or their insurers) the same following emergency events – the attendance at and repairs following emergency incidents i.e. collisions, fires or spills?  Generally, there are two types of incidents:

  1. a culprit is identified and Kier seek to recover their outlay from the Third-party directly or
  2. a culprit is NOT identified and Kier seek to recover their outlay from BCC

Why should the cost for staff, operatives, plant etc. differ between ‘a’ and ‘b’ (above)?  Do they?  To date the contractor has published their ‘Kier Schedule of Rates (KSoR) which display the CECA logo and are apparently based in part upon CECA rates.  The Council has only disclosed that they are charged ‘cost’, not CECA – the two are very different, CECA being higher.  It, therefore, appears Kier is charging Third-Parties much more than the Council.  It also appears the Council are unaware how Kier is managing claims and profiting from the situation. why would the pricing to the Coucnil and a Third party not be the same, to cite HHJ Gos=dmar, para 25:

It would be odd if a tortfeasor (Third Party) was liable to Highways England (an Authority) for diminution in value of a damaged chattel in one sum if sued by Highways England  (the Authority) itself
and in a different sum if sued by Highways England (the Authority) via BBMM (a contractor).

It appears BCC has created this ‘odd’ situation.  We have attempted to confirm whether Third parties are being charged the same, it appears not – but BCC has refused to provide specifics.  We have approached the First Tier Traibunal (FTT), our submission is as follows:


  1. I asked to be provided rates Kier Highways charged Birmingham City Council for damage repairs on the road network, and details of claims.
  2. Birmingham City Council withheld some information on the basis of section 43(2) (commercial interests) and stated that some information was not held.
  3. The information is not commercially sensitive
  4. further information is held by the council.

02/11/2020 Request

https://www.whatdotheyknow.com/request/kier_highways_ltd

  1. 02/11/2020, I sought from Birmingham City Council (“the council”), about damage to ‘street furniture’
    1. a copy of the contract with Kier Highways Ltd for damage to street furniture attendance and repairs
    2. the schedule of costs for works on the highways i.e. staff, operatives, plant and materials charged to the Council and;
      1. whether the Council is charged, for any works, by Kier Highways by using CECA rates
    3. the schedule of costs for works on the highways i.e. staff, operatives, plant and materials charged to Third Parties
    4. The basis upon which Kier Highways Ltd is to charge at-fault Third Parties for example:
      1. cost-plus uplift
      2. using the same base rates as charged to the Council in the event a culprit is unidentified
    5. The protection the council put in place to prevent Third Parties being overcharged i.e. the agreement that prevents the practice of Kier Highways profiting from claims – see: https://www.englandhighways.co.uk/inflati…
    6. a copy of any insurance you possess for damage to such property
    7. a copy of the authority in place permitting Kier Highways to commence proceedings in your name and
    8. the process agreed with Kier highways and/or their lawyers, for approaching Third parties, many of whom will be your constituents, for reimbursement such that they are treated fairly, reasonably and not subject to unreasonable processes or costs.”

25/11/2020 Response 18993085

  1. The council provided some information.
  2. It is notable that within the ICO’s DN initial history this response is missing. The information is pertinent and the relevant sections, those I am challenging, complaining about, are as follows:
  • Charges to the Council 
  1. Request at ‘5(2)’ above
    1. [2] the schedule of costs for works on the highways i.e. staff, operatives, plant and materials charged to the Council and;
    2. [2a] whether the Council is charged, for any works, by Kier Highways by using CECA rates
  2. The Council responded:
    1. Kier Highways applies for payment against actual costs incurred for staff, labour, plant, materials and subcontractors (or Third Parties) in delivering the works. For delivering the works, Kier Highways are paid a fixed Management Fee.
    2. Kier Highways do not use CECA rates and the costs for staff and labour are predominantly those of the TUPE workforce.
  3. The response indicated the Council was charged:
    1. Cost
    2. Not by use of CECA
  4. I was aware:
    1. Actual costs is the method by which Kier charge National Highways in the adjoining Area 9
    2. National Highways had disclosed the actual costs they were charged by Kier that is to say I possess Kier’s rates, as charged to another Authroity
    3. Third Parties were charged by Kier who cited CECA rates – yet I noted the Council was charged differently
  5. It was therefore apparent the Council were charged by use of one set of rates and Third Parties by a different set – higher sums. By higher, I am aware CECA are high, not cost and it followed that Kier would not charge less than cost to a Third Party i.e. the council were charged using the lower (lowest?) rates.
  6. I was mindful of HHJ Godsmark’s judgement (02/2018) C08YP765 IN THE COUNTY COURT AT DERBY, para 25:
    1. It would be odd if a tortfeasor (third party) was liable to Highways England for diminution in value of a damaged chattel in one sum if sued by Highways England itself and in a different sum if sued by Highways England via BBMM (a contractor)
  7. It appeared the council had created an odd situation

Request at ‘iii’ above

  • 3 the schedule of costs
  1. Request at ‘5(3)’ above:
    1. the schedule of costs for works on the highways i.e. staff, operatives, plant and materials charged to Third Parties
  2. I was simply referred to the response to ‘2’ above. The rates were not supplied
  • 4 how was Kier to charge a Third party
  1. Request at ‘5(4)’ above:
    1. The basis upon which Kier Highways Ltd is to charge at-fault Third Parties
  2. The response relevant to my request was:
    1. Kier will pursue Third Parties (including insurers) for recovery of costs incurred from having to repair the network.
    2. Any costs recovered are returned to Birmingham Highways and not held by Kier.
    3. The process and costs are fully transparent to the Council and Birmingham Highways
  3. The above explanation did not accord with my understanding:
    1. Kier were not charging Third parties by use of ‘costs’. I noted the council was charged using ‘actual costs’ and not CECA.  Third parties were subject to CECA rates and uplifts.
    2. Recoveries were remitted to the Council – it therefore appeared the council was provided detail about Third Party recoveries
    3. If the process was transparent, why did the Council believe cost were being charged to Third parties
  • Protecting Those You Serve
  1. Request at ‘5(5)’ above:
    1. The protection the council put in place to prevent Third Parties being
    2. overcharged i.e. the agreement that prevents the practice of Kier Highways profiting from claims
  2. The response was:
    1. There is full transparency with the Kier contract and the way Third Parties and subcontractors are being dealt with.
    2. There is not an opportunity for Kier to generate a profit from claims. Note response 4.
  3. Transparency appeared to be lacking.
    1. It appeared the Council believed Kier was charging Third Parties ‘cost’ but in fact Kier were using CECA rates plus an uplift
    2. Kier must surely be generating a profit from claims; profit is a necessary part of business. Kier must surely have been generating a profit, but from where and were they profiteering?
  • 8 Approaching Third parties
  1. Request at ‘v5(8)’ above:
    1. the process agreed with Kier highways and/or their lawyers, for approaching Third parties, many of whom will be your constituents, for reimbursement such that they are treated fairly, reasonably and not subject to unreasonable processes or costs.
  2. The relevant response was:
    1. Kier Highways are a national provider to numerous local authorities, Highways England, the government as well as the private sector.
    2. Kier engage Gallagher Bassett who are an experienced company specialising in the handling of claims.
    3. Gallagher Bassett and Kier both act fairly and reasonable whilst ensuring that the true costs are recovered thereby ensuring value for Birmingham Highways.
    4. Birmingham Highways and Birmingham City Council require Kier and Gallagher Bassett to operate courteously and within standard industry practice in dealing with Third Parties
  3. However, the response was awry; it did not reflect what was actually occurring and gave me further reason to suspect Kier had conveyed one thing to the council whilst were doing something else:
    1. We had never encountered Gallagher Bassett on a Kier claim
    2. Kier engaged Shakespeare Martineau (SHMA / Corclaim) solicitors to handle their claims; we had encountered SHMA on many such matters for Kier
    3. The council could not possibly be making an informed comment, could not be satisfied Gallagher Bassett was acting ‘fairly and reasonably’ because Gallagher Bassett was not involved in the claims. If the council believed this it appeared they had bene misled, or were misleading me
    4. That the Council required Gallagher Bassett (not party to the claims) to act in a specific manner further indicated they did not know what was actually occurring; that any requirement they had imposed upon Gallagher Bassett was ineffective, irrelevant.

26/11/2020, Clarification

  1. I returned to the Council seeking clarification

14/01/2021 Council Response

  1. The request & responses to the pertinent questions are as follows:
  • The schedule of costs
  1. I asked ‘Please provide the schedule of rates. It appears this is ‘actual costs’’ the response was:
    1. These rates have been confirmed by the First Tier Tribunal (EA/2018/0104) to be commercially sensitive and therefore under section 43 FOIA will not be disclosed for the reasons stated below.
  2. EA/2018/0104, being cited, above supports the rates NOT being commercially sensitive. The Tribunal (EA/2018/0104) found:
    1. Rates for emergency works (DCP – damage to Crown property) did not exist
    2. The rates that did exist were sensitive – see below further references
  3. I asked ‘How are actual costs arrived at and verified by the Council’ the response was:
    1. There is a monthly commercial, valuation and assessment process that takes place between BHL, BCC and Kier with full transparency of costs incurred and forecast.
    2. This monthly process includes the necessary due diligence and verification prior to payment being made to Kier as part of the contract.
    3. The rates and costs agreed with Kier at the outset originated from those presented and submitted as part of the competitive tender in late 2019 and early 2020.
  4. The subject request is specific; it seeks rates for emergency works. These rates are not commercially sensitive:
    1. They are disclosed on claims
    2. They have been disclosed (EA/2019/0390V) by the very Authority involved in EA/2018/0104 ergo,
    3. They are not commercially sensitive
  5. I asked ‘Please provide the rates utilised by the workforce pre-Kier appointment. It is understood this will be Amey rates’ the response was:
    1. These rates have been confirmed by the First Tier Tribunal (EA/2018/0104) to be commercially sensitive and therefore under section 43 FOIA will not be disclosed.
    2. Costs for staff and labour are those that form part of the competitive tender submitted and agreed with Kier in addition to those of the TUPE workforce (including a combination of historical Amey and BCC employment).
    3. Detailed applications for payment are submitted by Kier on a monthly basis, which includes all of the necessary substantiation and detail for the costs incurred as well as the detailed cost transaction report for all levels of activity and associated costs’
  6. The ‘DCP’ rates have not ever been determined to be commercially sensitive, just the opposite; and disclosed!
  7. I have only sought ‘DCP’ rates from the council as opposed to rates for any other type of works
  8. It should however be noted that the disclosure EA/2019/0390V (see below) of DCP rates, of rates agreed between Kier and National Highways between 2015 and the present, were nt simply used for DCP works but also for more general works; projects, schemes, pre-planned events. Therefore:
    1. What was previously described as ‘sensitive’ has been disclosed
    2. The rates are Kiers
    3. The rates relate to DCP events or are those of staff and operatives engaged in DCP activities (albeit they may undertake other works where their rates may be considered sensitive’.

EA/2019/0390V

  1. This requests was for:
    1. “Damage to Crown Property a.k.a. DCP Rates for Areas 9 and 10 from inception of the current contact to the present date, being the schedule of costs referred to at paragraph 14 of the attached witness statement, confirmed under Oath by [named individual] at the First Tier Tribunal Information Rights appeal hearing on 21 November 2018 as not being commercially sensitive.

The Kier rates, Area 9, were disclosed.  Reference to ‘First Tier Tribunal Information Rights appeal hearing on 21 November 2018’ is reference to EA/2018/0104[1]

  1. from which I cite para. 46:
    1. Secondly, the publication by A-one+ of rates charged for third party claims under ASC Area 12.
    2. This is more similar to the withheld information, in that it contains a long list of items and rates for operatives, plant and materials.
    3. This cannot be regarded as commercially sensitive by A-one+ as it has been published voluntarily.
    4. However, we again accept HE’s position that this is very different from the withheld information – it is a list of rates actually charged in third party claims, not a set of target rates for the main contract which would reveal the contractor’s methodology in a competitive tender.
  2. My request is for ‘a list of rates actually charged in third party claims’; which is not sensitive.
  3. I asked ‘Please provide a copy of the contractor’s last notification to you of all Third-Party Claims, the last quarterly basis return (schedule 15, 3). The council responded:
    1. Notifications and reports are continuing to occur, including the quarterly Third Party Claims data.
    2. This is confidential information and will not be disclosed for the reasons stated below.
  4. The rates not being sensitive, there appears no good reason for the notifications to be considered so
  5. The failure to disclose should be considered in relation to the council seemingly being unaware of what was occurring:
    1. That Kier is not utilising Gallagher Bassett
    2. That Kier is not utilising ‘cost’ to bill Third parties
    3. That Kier were making a profit
  6. Kier’s conduct also did not appear to agree with a further benefit they were receiving, the council advising:
    1. Kier receive a Management Fee for their services at the agreed amount when within scope of the contract or a fixed percentage uplift when out of scope of the contract.
    2. All other costs and cost components are reimbursed at cost and on an incurred basis.
    3. It is understood that any profit Kier will achieve from this project is included as part of their Management Fee or percentage uplift. The council does not hold this information.
  7. It appeared, the council as unaware of the process and costs Kier engaged, that:
    1. Kier was profiting from claims. In addition to this profit, Kier was receiving a ‘management fee’ i.e there appeared to be a possible duplicity; charging Third Parties for managing claims whilst receiving payment form the council.
    2. Kier was to be billing Third Parties by use of ‘cost’ but this was not occurring
    3. Kier were to receive profit from the management fee or percentage uplift but:
      1. Whilst at an agreed amount
      2. The council could not state what this was
    4. Information pertaining to the contract is, at worst, held on behalf of the Authority – see below.
    5. I expanded upon the request at 5(8) above (the process agreed with Kier highways and/or their lawyers, for approaching Third parties, many of whom will be your constituents, for reimbursement such that they are treated fairly, reasonably and not subject to unreasonable processes or costs), explaining:
      1. The request relates to Third-party claims/incidents.
      2. Kier Highways handle claims. Indeed, Kier Highways:
        1. appoint lawyers to progress the claims for the outset
        2. add a 10% administration fee to claims
  • charge interest on the claimed sums from the date of incident/loss
  1. The above appears to be at odds with charging ‘cost’ and not profiting. Please:
    1. confirm the above are authorised, agreed processes/charges and explain how they are consistent
  2. The council responded:
    1. Similarly to other responses, there is a monthly commercial, valuation and assessment process that takes place between BHL, BCC and Kier with full transparency of costs incurred and forecast.
    2. This monthly process includes the necessary due diligence and verification prior to payment being made to Kier as part of the contract.
    3. The rates and costs agreed with Kier at the outset originated from those presented and submitted as part of the competitive tender in late 2019 and early 2020.
    4. The process, quality, supply chain and costs are consistent.
    5. There is no prejudice.
  3. However, the situation, Kier’s use of lawyers and application of uplifts was at odds with the original response.
  4. It was also evident Kier charged the council ‘cost’ and Third parties higher prices, based on CECA; not charged to the council and at odds with HHJ Godsmark (above).

Factors For & Against Disclosure

  1. The Council acknowledged a factor in favour of disclosure would be the Council has committed to be transparent and open. Yet they were being just the opposite; providing contradictory answers that did not reflect the actual situation and avoiding addressing this.
  2. Factors in favour of withholding were cited as:
    1. A disclosure will prejudice the commercial interests of both the authority and a third party, and
    2. the disclosure could damage relationship between the Council and its third-party suppliers.
  3. Neither factor was explained
  4. Disclosures of Kier rates have been made evidencing
    1. there was no commercial sensitivity attached and
    2. not resulting in any criticism from Kier or
    3. adverse effect upon their business or that of an Authority
  5. the concerns relate to the
    1. the actual costs that the council is charged and not the “Kier Schedule of Rates” which is publicly available;
    2. a copy of the contractor’s last notification to you of all Third-Party Claims, the last quarterly basis return (schedule 15, 3); and information in scope of 2d which the council says it does not hold:
    3. the rates utilised by the workforce pre-Kier appointment. It is understood this will be Amey rates.

Private Finance Initiative

  1. I am aware a Private Finance Initiative (PFI) is a contract between a private party and a government entity where the private sector designs, builds, finances and operates a public asset and related services; the private party bears the risks associated with construction and maintenance and management responsibility, and remuneration is linked to performance.
  2. The situation described by the council is not one where ‘remuneration is linked to performance’. Instead, the council has set out a method of remuneration, regarding Third Party claims, that differs from the above description.
  3. The council appear unable to gauge Kier’s performance; they have conveyed a charging mechanism and process at odds with the reality.
  4. It cannot be determined whether Kier are in fact returning correct information to the council. It has been demonstrated that Kier has supplied false information about cost/recoveries to an Authroity[2].

Commercial interests – No Kier Comment?

  1. The council has failed to demonstrate disclosure under this Act would, or would be likely to, prejudice the commercial interests of any person (including the public authority holding it). By reference to other disclosures, involving the same type of works and the same contractor, the rates have been disclosed, seemingly without any adverse effect, the contractor has not cited any adverse effect
  2. Indeed, with regard to this matter, it appears the contractor was not even contacted for comment – the Authority appears to have assumed there would be harm
  3. The ICO explains “A commercial interest relates to a legal person’s ability to participate competitively in a commercial activity. The underlying aim will usually be to make a profit. However, it could also be to cover costs or to simply remain solvent.”
  4. Disclosure will have no effect upon profit; this has been built into the contract albeit the contractor would appear to be seeking other avenues of profit
  1. The information does NOT contain details such as the operating costs, this I an exaggeration, it misrepresents the request. the information sought relates to the rates charged by specific parties, for specific works.  Kier rates have bene disclosed by National Highways for the years 2015 to the present from an adjacent )to the council) area.
  2. There is a need for openness, highlighted more recently by what appears to be an acceptance by National Highways that Kier conducts themselves illegally, engage in bribery, 23/01/2022[3]:
  1. Separate papers also show that workers employed by the main contractor, Kier, for another scheme ‘manipulated’ tender processes, awarded a subcontract worth £1.4 million in breach of rules and that this was ‘influenced by bribery’.
  2. The claims were in relation to a stretch of the M6, junctions 13 to 15, also being converted.
  3. The internal National Highways papers state: ‘Evidence found during this investigation supports the allegations made but is insufficient to identify individuals.’

The likelihood of the prejudice occurring

  1. There is no likelihood of prejudice.
  2. Rates, for Kier, Area 9 were disclosed 08/2020. They have only been used to re-price claims, to ensure Third parties were not charged excessively, unreasonably
  3. No known objection to the release is known to have been raised by Kier. No known objection was presented by National Highways who disclosed the rates.
  4. The only prejudice occurring is to those the council (Authority) should be servicing; the public. The public should be billed using common rates or at the very least, provided such a schedule of rates to present as an alternative measure of the claim – simply what HHJ Godsmark was seeking.
  5. What identifiable commercial prejudice has, or is likely to arise that would affect one or more parties.?  In this instance, we have the benefit of a like disclosure without any suggestion of prejudice.
  6. I am aware BHL is in the process of re-procuring highway maintenance and management services that it supplies to the council. Kier may well be a bidder in this process. However:
  7. I am seeking information about Kier’s ‘DCP’ charges – these are already in the public domain for an adjacent Area. I am not seeking ‘operating costs’ yet Kier has already disclosed these to me in the past:
    1. 1153 – the annual costs[4] for operatives and staff
    2. AIW the complete breakdown on an operative’s schedule of cost components[5] and the associated figures
  8. rival bidders and potential clients have an insight on Kier’s pricing structure both with regard to what they charge an Authority (disclosure to a tribunal 08/2020) and by way of the KSoR schedule of rates and their use of CECA. Contractors are familiar with one another’s rates, staff are regularly TUPE’d between contractors.
  9. I have asked to be provided no ‘individual salary information and to misrepresent my request in this fashion is to demonstrate a ‘clutching at straws’ approach – the need to misrepresent my request to undermine it.
  10. The schedule contains details of highway claims And I expect to be provided this information. I have not sought settlement figures:
    1. Disclosing this information will NOT enable other parties to consider similar claims against the council and may encourage them to do so.
    2. I have sought no information about claims AGAINST the council.
    3. Any party is able to challenge a claim made by the council. A search of the internet will quickly uncover reference to Kier and the council on englandhighways.co.uk and the multiple concerns associated with such claims
    4. If, not raised in the response, I wished to demonstrate the claim to settlement differences, I can do so by use of the information I possess. Therefore, I am willing to have settlement data redacted from the schedule thereby negating the argument:
      1. It will also provide details of the commercially assessed value of existing claims. This has the potential to undermine commercial settlement of claims, in that claimants would be able to assess the likely level at which claims would be settled by the council.

Public interest in favour of disclosure

  1. The council appears unaware of the processes engaged and rates utilised by Keir
  2. It appears Kier are acting other than as agreed with the council
  3. the public are unlikely to be aware of the procedure that should be engaged, that the common rate to the council and them, is an acknowledged procedure (HHJ Godsmark)
  4. the council has failed to ensure that the methodology they describe (contractually agreed?) is engaged thereby exposing the public to risk
  5. there is no harm from disclosing the rates and enabling the public to consider claims armed with facts – as evidenced by Area 9 rates, no disclosed harm has arisen and the transparency has seen Third-Parties able to better present arguments and ‘reasonable’ claim settlements resulting in reduced disputes, reduces settlement time, reduced pressure upon courts.

Amey Rates

  1. For the reasons above and because the rates were established many years ago, there is no sensitivity attached to the rates Amey charged – once again, for the specific roles / DCP tasks.

Held on behalf of

  1. If any of the information is not held by the council it is held on behalf of the council by the contactor, Kier Highways.
  2. This position is supported by the recent findings, Highways England ref.IR 101224, ICO ref. IC-48280-N2N3 & Information tribunal ref. EA/2021/0257 which saw the Authority withdraw their not ‘held on behalf of’ (HoBo) stance with regard to claim data used by their contractor, Kier Highways Ltd. After the legal framework was presented[6].

[1] https://www.englandhighways.co.uk/tribunal-appeal-ea-2018-0104/

[2] https://www.englandhighways.co.uk/false-information-supplied-to-highways-england/

[3] https://www.dailymail.co.uk/news/article-10433467/Smart-motorway-firms-probed-fraud-workmen-face-accusations-stealing-scrap-metal.html

[4] https://www.englandhighways.co.uk/1153-the-figures/

[5] https://www.englandhighways.co.uk/the-cost-of-an-aiw/

[6] https://www.englandhighways.co.uk/freedom-of-information-act/