David Ash Statement

Second Respondent


First 14 AUGUST 2020






Appeal No. EA/2019/0390







First Respondent




Second Respondent





I, DAVID ASH, of Highways England, The Cube, 199 Wharfside Street, Birmingham B1 1RN, will say as follows:


  1. I am a quantity surveyor (“QS”) employed by Highways England as Regional Commercial Manager supporting the West Midlands Area (Area 9). I am a member of the Royal Institution of Chartered Surveyors. I have over 30 years quantity surveying experience in both the public and private sectors, on a variety of buildings, civil engineering, rail and road construction projects. I have worked for Highways England and its predecessor organisation since 2014.
  1. I understand that my colleague at Highways England, Liz Herridge, has provided a witness statement describing how Highways England recovers from third parties the costs of repairing damage caused to the strategic road network (the “SRN”) when those costs are ‘above threshold’ (“Green Claims”), and has explained that the Green Claims procedure over £25,000 in Area 9 is slightly different from other parts of the SRN.
  2. In this witness statement I explain my role in the Green Claims procedure over £25,000 for Area 9 (the “Area 9 Procedure”).
  3. It is worth noting at the outset that Green Claims and the Area 9 Procedure do not form a large part of the work of the Area 9 commercial team. To put this into context, in the last Financial Year (April 2019 to March 2020), the commercial team for Area 9 have reviewed estimates (or

“target prices”) submitted by the contractor, Kier Highways Limited (“Kier”) with a total value of over £63 million, in respect of 112 schemes for enhancing or replacing parts of the SRN in Area 9 that have reached the end of their useful life, and have audited 75 scheme final accounts with a submitted value of over £57 million. In the same period the Area 9 commercial team undertook reviews of the paperwork (“final cost packs”) submitted by Kier in respect of 21 Green Claims valued at £1.1 million.

  1. I am duly authorised to make this witness statement. The facts set out in it are true to the best of my knowledge and belief. Except where otherwise stated, those facts are within my direct knowledge. Where matters are not within my direct knowledge, I have identified their source, and I believe that those facts are true.


  1. In 2016, the Midlands Region Operations team requested support from the Regional Commercial Team to undertake reviews of above threshold Green Claims cost packs. The purpose of the review was to identify errors/anomalies with costs submitted by the Service Provider and where necessary to ensure the claim is adjusted accordingly. The following year that process was adopted on a permanent basis.
  2. As a result of this change, in Area 9 there is now a two-stage quality assurance (“QA”) procedure for claims packs received from Kier exceeding £25,000 in value. Once a claim pack has been subject to initial QA checks by Highways England (checking that all the right documents, photographs and so on have been provided for the relevant claim, and that they are legible and complete, for example), it is passed to me for review, as above.
  3. The review is largely a paper exercise, and is a matter of my own extensive experience and industry knowledge. For example I know that, by agreement with Highways England, Kier charge plant at CECA rates (i.e. industry standard rates published by the Civil Engineering Contractors Association, with which I have a working familiarity), minus 30%. I therefore have an awareness of the range of costs that it would normally be expected to see for plant.
  4. As part of this review I also look at a sample of the hourly rates charged for various staff and operational personnel recorded as involved in making repairs and check that there are no obvious errors or anomalies. 


  1. My review of hourly rates billed by Kier for relevant personnel – i.e. “people rates” – is informed by my work in auditing those rates on a regular basis since the inception of the Area 9 ASC. The purpose of this people rates reconciliation exercise is to establish values which represent what is called, in the contract with Kier (the “ASC”), the “Defined Cost” of people (as laid down in a “Schedule of Cost Components”, or “SOCC”), based on an examination of actual people costs incurred undertaking contract activities. The SOCC, as its name suggests, is a schedule of categories of costs, not a schedule of specific sums. “Actual people costs” in this context is not simply whatever sums Kier has itself paid – it is cost correctly incurred by Kier, in line with the SOCC (that is, in line with the permissible categories of costs, not specific sums – which, as I say, the SOCC does not record), and subject to audit by Highways England.
  2. The agreed people rates are used consistently across all services in the contract which are reimbursed on a defined cost basis, including those services required by the contract to be delivered as cost reimbursable, schemes to replace life expired assets, or enhance the Area network, and Green Claims against third parties for damage to the Area network.
  3. Under the SOCC, people rates comprise more than twenty different cost components, ranging from salary, pension and holiday entitlement, to personal protective equipment and training. Kier periodically adjust their people rates, in order to ensure the people rates they are charging to Highways England enable them to recover their actual costs of all those items – which can fluctuate over the term of a five-year ASC. For manageability of operating the contract, for both Kier and Highways England, Kier’s staff and operative costs are grouped and averaged over a number of rate bands.
  4. With the exception of the first reconciliation some cost elements relating to charges under paragraph 4 of the SOCC have been included in the people rates review, for those items listed relating to people, such as phones and IT for staff and hand tools for labour
  5. For its part, Highways England needs to be assured that the people rates being charged by Kier are a fair reflection of Kier’s actual costs. To that end, and roughly annually since 2015, Kier provide me with information setting out in vast and anonymised detail the way in which Kier propose to charge people rates under the Area 9 ASC in the period up to their next review.
  6. The information provided is immensely complex and this cannot be emphasised enough. We are not talking about a few individuals working the same hours for the same pay. The information provides details against the relevant cost components for hundreds of Kier employees paid at a variety of different rates, and it would take an extremely long time for one person to review line-by-line and item by item. I therefore use random sampling a ‘spot check’ methodology for assessing the rates proposed to be charged, by requesting and examining the backing evidence supplied by Kier.
  7. If I have a query as to particular items proposed to be charged, I ask for further information or explanation until I am satisfied that my query has been answered, addressed or resolved.
  8. The outcome of my review is a set of people rates that I am prepared to recommend that Highways England agree to pay, for all work performed by Kier in Area 9 under the ASC – that is to say, both scheme work, and repair work.
  9. In an Annex to this statement, I set out the rates in respect of which I have made such recommendations since 2015 for Kier’s Area 9 people rates. All rates listed in the Annex include the charges to which I refer above at paragraph 13.

I believe the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.



Date: 14 August 2020