‘Planning’ Charges

09 Feb 2018

Your Ref: Kier Highways Ltd.
Our Ref: A03A001/L569608

Mrs S. Green,
Head of Claims, Recovery and Dart Charge Service
Highways England

mailto: Sarah.Green@highwaysengland.co.uk

Dear Mrs Green,

Kier ‘Planning’ Charges – Duplication / Exaggeration

Whilst Appendix A to Annex 23 is not applicable to all Kier Highways Ltd (‘Kier’) Areas, it is evident they apply the process to them all – the charges are standardised as is the presentation.

We routinely see ‘planning’ raised as a charge to Third Parties.

It is patently obvious that while Kier contracted (01/07/2014 in Area 9) to use the ‘Defined Cost’ process, signed up to the protection Highways England provided Third Party drivers, they have paid lip-service to Appendix A to Annex 23. From the outset, without interference from Highways England, they instigated their own pricing methodology ‘1153’ that saw many facets of a claim exaggerated 5-fold, likely £3,000+ overstatement / claim … and they invoiced on 1,000’s.

Kier now purport to utilise a process consistent with Appendix A to Annex 23 however, it is not. Appendix A to Annex 23 explains that the method of assessing the following cost:

(d) Planning repair of damage

is by use of the Third Party Claims Overhead, a percentage uplift (about 20.58%) applied to a claim.

Yet on every sub-threshold claim presented to a Third Party there is included a charge for ‘planning’, generally a set number of items likely based upon an ‘average’ (see my letter L568482) which if we simply take a small section of the staff under ‘planning of repair’ amounts to:

However, every CBD (cost breakdown document) displays a ‘blue’ section headed ‘planning’. I have reviewed an example, our ref T08C013 in respect of which all items within the section are conveyed as ‘planning total’, the actual amount being £692.29.

Please explain the duplicity:

a) Third Parties are paying for planning as this is charged using the process Kier state they adopt.
b) Third Parties are charged separately for planning (as above

Please confirm the process will stop with immediate effect and that all claims, which are presented in the name of Highways England, will clearly display the ‘Defined Cost’ and Third Party Claims overhead.

I remain concerned that Kier, displaying ’base rate’ on their CBD are seeking to mislead. I have already raised the issue of the lawyers acting for you conveying that the base rates on the CBD are the defined costs – this is wrong.

Please confirm this information will be passed to KPMG and form part of your investigation.

Yours sincerely,