Fraud by Agents
Dear National Highways Limited,
the allegations of potential fraud or impropriety raised with National Highways
the failure by our contractor or their supply chain to procure in line with National Highways contracts.
Yours faithfully,
Steve Taylor
Dear Steve Taylor
Freedom of Information request - Fraud by Agents
I am writing regarding your request for information which we received 14
July 2022.
In that request, you asked us for the following information:
Dear National Highways Limited,
the allegations of potential fraud or impropriety raised with National
Highways
the failure by our contractor or their supply chain to procure in line
with National Highways contracts.
Yours faithfully,
Steve Taylor
We are dealing with your request under the provisions of the Freedom of
Information Act 2000.
Unfortunately, your request is unclear and I will be unable to proceed
with your request without clarification of the specific information you
wish to receive.
To help us locate and identify this, could you describe the information
you are asking for and set out clearly what information is required.
Please note that if I do not receive appropriate clarification of your
information requirements within two months from the date of this letter,
then I will consider your request closed.
Please remember to quote reference number FOI/3916 in any future
communications about this response.
Kind regards
Amanda Speight
Freedom of Information Officer
You can make new FOI requests and review published responses by
visiting [1]https://foiform.highwaysengland.co.uk/
References
Visible links
1. https://foiform.highwaysengland.co.uk/
Dear [email address],
Can you send me the anti fraud letters to the contractors and the replies.
Have any contractors been prosecuted, are any investigations ongoing are any of them with the police?
Yours sincerely,
Steve Taylor
https://www.driving.co.uk/news/roads/fra...
FRAUD CLAMPDOWN AFTER £320,000 OF CENTRAL BARRIER GOES MISSING DURING CONSTRUCTION OF SMART MOTORWAY
Ballooning costs linked to bribery, corruption, fraud and price fixing
National Highways has written to construction companies asking them to outline the anti-fraud practices they have in place after it found £320,000 worth of central barrier metal, used during the construction of a smart motorway, went missing.
The letter mentioned “an increase in the number of allegations of potential fraud or impropriety raised with us,” with fears that central barriers have been sold as scrap metal being just one of the potential issues.
It comes on the back of the conclusion of an investigation into the activities of a joint venture between the companies Costain and Galliford Try, both of which are working on the construction of the M1 smart motorway scheme between Junctions 13 and 16, a project that is due to finish next year.
The scheme for the construction of the stretch of smart motorway between Milton Keynes and Northampton was awarded to the joint venture with an agreed budget of £297m; this has since ballooned to £453m.
The National Highways investigation cleared both companies of “inappropriate activity” and said it “could not prove, beyond reasonable doubt, that criminal activity had taken place”. However, it has urged companies engaged in government-funded roads projects to provide assurance to the agency of their efforts to combat potential fraud and theft, and said that it was undertaking a review into the checks that the companies have in place.
The letter from Malcolm Dare, the director responsible for procurement at National Highways, was sent last week according to The Daily Mail and said that that “several recent audits” had suggested “potential weaknesses or poor practices being applied” in relation to preventing potential examples of impropriety by contractors.
Among the possible crimes listed by Dare were claims being lodged for work that were higher than the actual cost in the hope they would be approved unnoticed. He also spoke of certain suppliers being possibly favoured, including possible bribery, and the creation of fake workers and machinery claimed, “at either the sub-contract or main contract level.
National Highways was unable to substantiate whistle-blowers’ allegations of the use of ghost workers, bribery or business favours
Other potential problems included submitting claims based on “false records”, with “irregularities” in staff costs and timesheets, as well as “colluding with labour suppliers when agreeing rates” to inflate costs.
“In light of recent high-profile cases, and to provide additional assurance to the National Highways CEO, executive and board,” the letter said, “we are undertaking a review of the checks that are in place [among contractors] . . . to minimise the threat of economic crime.”
An investigation into the Costain Galliford Try (CGT) joint venture was launched by National Highways’ anti-fraud department after multiple accusations were levelled between September 18, 2020 and February 2, 2021, each alleging wrongdoing on the project.
In addition to failing to find definitive evidence of theft in relation to the missing metal, National Highways was similarly unable to substantiate whistle-blowers’ allegations of the use of ghost workers, bribery or business favours.
As reported by Construction Inquirer in January, in the final report on the matter, investigators did raise several concerns that “presented an increased risk of fraud and further possible accusations of bribery or corruption” if not addressed.
These included poor contract management in relation to escalating costs, a lack of record-keeping supporting key decisions during a live procurement and a failure to sufficiently validate ongoing subcontractor costs throughout the life of the project. The investigators also red-flagged a lack of governance around single-source procurement decisions.
Responding to the report, CGT issued a statement saying that both National Highways’ and its own internal investigation found no connection between any of the allegations and the increased costs of the M1 smart motorway project.
“Any inference that the two are connected in any way or that the alleged activities that were under investigation have incurred a cost to the taxpayer is incorrect,” a spokesperson for the company said.
“Project scopes can evolve as was the case here, and those changes have the support of all parties involved.”
Speaking after the January inquiry, David Bray, National Highways’ smart motorways programme director, said: “We take any suggestion of criminal behaviour on our projects extremely seriously and investigate every allegation thoroughly.”
Dear Steve Taylor
Fraud by Agents
Thank you for your information request dated 26/07/2022 regarding Fraud by
Agents. We have dealt with your request under the provisions of the
Freedom of Information Act 2000.
You asked -
Dear National Highways Limited,
the allegations of potential fraud or impropriety raised with National
Highways
the failure by our contractor or their supply chain to procure in line
with National Highways contracts.
Yours faithfully,
Steve Taylor
On the 26 July 2022, following National Highways request you do so, you
clarified that you were asking -
Can you send me the anti fraud letters to the contractors and the replies.
Have any contractors been prosecuted, are any investigations ongoing are
any of them with the police?
I can confirm that we hold the information you have requested.
Information provided
Please see attached for the letter that was sent to our ‘Tier 1’
suppliers. This is generic in nature, which we are sending in tranches to
50 of our largest suppliers. The responses will be received intermittently
and reviewed on receipt by specialists within the company.
With regard to your question about prosecutions and ongoing cases, as set
out in our previous response, no contractors have been prosecuted. Where
we have had reasonable cause to investigate, based on the allegation made
and the clarity of the information supplied by the referrer, we have
concluded no sufficient cause to involve the police and pursue on a legal
basis. We take every allegation seriously and where our investigations
uncover sufficient evidence of a crime having been committed, we will
always take appropriate action, including legal redress.
Information withheld
"The responses received by National Highways from the Tier 1 suppliers"
This information has been withheld under the exemptions in [1]Section 41,
[2]Section 31 and [3]Section 43 of the Freedom of Information Act 2000 for
information provided in confidence, law enforcement and commercial
interest respectively.
In applying these exemptions, we have had to balance the public interest
in withholding the information against the public interest in disclosure.
The key public interest factors for and against disclosure are attached.
If you are not satisfied with your response you may ask for an internal
review within 40 working days of receiving the response, by replying to
this email. You can learn more about the internal review process
at [4]https://nationalhighways.co.uk/media/a14....
If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted
at [5]https://ico.org.uk/make-a-complaint/ or via the address below -
Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
Please remember to quote reference number FOI/3916 in any future
communications about this response.
Kind regards
National Highways Counter Fraud Team
You can make new FOI requests and review published responses by
visiting [6]https://foiform.highwaysengland.co.uk/
References
Visible links
1. https://www.legislation.gov.uk/ukpga/200...
2. https://www.legislation.gov.uk/ukpga/200...
3. https://www.legislation.gov.uk/ukpga/200...
4. https://nationalhighways.co.uk/media/a14...
5. https://ico.org.uk/make-a-complaint/
6. https://foiform.highwaysengland.co.uk/
Dear [email address],
What increase in the number of allegations of potential fraud or impropriety occurred, what were the allegations?
Yours sincerely,
Steve Taylor
Dear Steve Taylor
Freedom of Information request - Fraud by Agents (Follow-up of FOI/3916)
Thank you for your information request dated 19/08/2022 regarding Freedom
of Information request - Fraud by Agents (Follow-up of FOI/3916). We have
dealt with your request under the provisions of the Freedom of Information
Act 2000.
You asked -
Dear [email address],
What increase in the number of allegations of potential fraud or
impropriety occurred, what were the allegations?
Yours sincerely,
Steve Taylor
I can confirm that we hold the information you have requested.
Information provided
Some of this information is available in our published Annual Report and
Accounts 2022, specifically pages 48 and 137. The full Annual Report and
Accounts is available on our website and via this [1]link for ease of
reference. However, to confirm, in the period April 2021 – March 2022, we
received 49 referrals. Whilst this was a 53% increase on the previous year
(32), we see this as a positive outcome of our increased campaigns to
raise awareness, combined with the impact of the easing of the pandemic
(increasing the potential for people to check or challenge activities that
they previously may not have been exposed to).
The types of referrals received were those already detailed within the
letter issued by our Commercial and Procurement Director as part of his
ongoing oversight of our supply chain. These have previously been shared
with you and include:
• Compliance with the requirements to obtain three or more quotations
for subcontracted works, where applicable
• Ensuring professional standards are applied to tender evaluations
following prescribed procedures
• Favouring certain suppliers (potential bribery)
• Significant changes to scope to that tendered post-award
• Escalating supplier costs post-award
• Staff costs and timesheets; irregularities or lack of supporting
evidence (potential claims of false records)
• Potential for suppliers or individuals within suppliers colluding with
labour suppliers when agreeing rates or supply
• Weaknesses in the review of plant accruals and the off hiring of plant
• Discrepancies between the direct fee percentage stated in the draft
contract and the fee applied within the applications for payment
• Transparency of hospitality, particularly during live procurement
processes
• Costs for “ghost” employees and plant being applied for at either the
subcontractor main contract level
• Purposely over applying for payments on the hope costs that suppliers
are not entitled to will “go through” un-noticed or missed by checks.
Despite thorough investigation, no evidence was found to suggest there was
any fraud committed against National Highways in any of these matters
investigated by the company’s Counter-fraud team.
If you are not satisfied with your response you may ask for an internal
review within 40 working days of receiving the response, by replying to
this email. You can learn more about the internal review process
at [2]https://nationalhighways.co.uk/media/a14....
If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted
at [3]https://ico.org.uk/make-a-complaint/ or via the address below -
Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
Please remember to quote reference number FOI/4093 in any future
communications about this response.
Kind regards
Ian Maddock
You can make new FOI requests and review published responses by
visiting [4]https://foiform.highwaysengland.co.uk/
References
Visible links
1. http://nationalhighways.co.uk/media/baph...
2. https://nationalhighways.co.uk/media/a14...
3. https://ico.org.uk/make-a-complaint/
4. https://foiform.highwaysengland.co.uk/
Dear [email address],
I'd like clarification on your reply about 49 referrals. No evidence was found to suggest there was
any fraud committed against National Highways in any of these matters investigated by the company’s Counter-fraud team. Is this the 49 referrals and if it is how many went to the police and when was the last time you found evidence to suggest fraud was committed against National Highways and what internal National Highways papers state: ‘Evidence found during this investigation supports the allegations made but is insufficient to identify individuals.’
Yours sincerely,
Steve Taylor
Dear Steve Taylor
Fraud allegations
I am writing regarding your request for information which we received
07/10/2022.
In that request, you asked us for the following information:
Dear [1][email address],
I'd like clarification on your reply about 49 referrals. No evidence was
found to suggest there was
any fraud committed against National Highways in any of these matters
investigated by the company’s Counter-fraud team. Is this the 49
referrals and if it is how many went to the police and when was the last
time you found evidence to suggest fraud was committed against National
Highways and what internal National Highways papers state: ‘Evidence found
during this investigation supports the allegations made but is
insufficient to identify individuals.’
Yours sincerely,
Steve Taylor
We are dealing with your request under the provisions of the Freedom of
Information Act 2000.
Unfortunately, your request is unclear and we will be unable to proceed
with your request without clarification of the specific information you
wish to receive.
To help us locate and identify this, please could you tell us if you are
asking if the statement of 'no evidence was found to suggest there was any
fraud committed against National Highways in any of these
matters investigated by the company’s Counter-fraud team' was made
regarding the 49 referrals received between April 2021 and March 2022 and
additionally how many of those 49 referrals were passed on to the Police?
Please note that if we do not receive appropriate clarification of your
information requirements within two months from the date of this letter,
then we will consider your request closed.
Please remember to quote reference number FOI/4301 in any future
communications about this response.
Kind regards
FOI Advice
You can make new FOI requests and review published responses by
visiting [2]https://foiform.highwaysengland.co.uk/
References
Visible links
1. mailto:[email address]
2. https://foiform.highwaysengland.co.uk/
Dear Steve Taylor
Thank you for your clarification relating to Fraud allegations dated 28
October 2022.
The due date for issuing a response is 25 November 2022.
Please feel free to contact our team if you have any queries quoting
FOI/4301 in any future communications
Kind regards
Amanda Speight
Freedom of Information Officer
You can make new FOI requests and review published responses by
visiting [1]https://foiform.highwaysengland.co.uk/
References
Visible links
1. https://foiform.highwaysengland.co.uk/
Dear Steve Taylor
Fraud allegations
Thank you for your information request dated 28/10/2022 regarding Fraud
allegations. We have dealt with your request under the provisions of the
Freedom of Information Act 2000.
You asked -
Dear [1][email address],
I'd like clarification on your reply about 49 referrals. No evidence was
found to suggest there was
any fraud committed against National Highways in any of these matters
investigated by the company’s Counter-fraud team. Is this the 49
referrals and if it is how many went to the police and when was the last
time you found evidence to suggest fraud was committed against National
Highways and what internal National Highways papers state: ‘Evidence found
during this investigation supports the allegations made but is
insufficient to identify individuals.’
Yours sincerely,
Steve Taylor
On the 28 October 2022 you clarified that the information you were seeking
was whether the statement of 'no evidence was found to suggest there
was any fraud committed against National Highways in any of these
matters investigated by the company’s Counter-fraud team' was made
regarding the 49 referrals received between April 2021 and March 2022 and
additionally how many of those 49 referrals were passed on to the police.
We can confirm that we hold the information you have requested.
Information provided
When we stated: "No evidence was found to suggest there was any fraud
committed against National Highways in any of these matters investigated
by the company's Counter-fraud team." we were referring to the 49
referrals received in the period April 2021-March 2022.
Despite thorough investigation by the company's Counter-fraud team, no
evidence was found to suggest there was any fraud committed against
National Highways. As a result, none of these matters were referred to the
police by National Highways.
One matter investigated involved assisting another agency in their own
investigation to establish whether irregularities were identified in the
administration of a grant that we have funded. This matter is currently
the subject of a live police investigation and we are unable to provide
further commentary until this is resolved.
'Evidence found during this investigation supports the allegations made
but is insufficient to identify individuals.' relates to our investigation
of the M6 junctions 13 to 15 project. The Daily Mail articles made it
difficult to see which conclusion related to which matter. In respect of
the M6 junctions 13 to 15, there were allegations that constituted
breaches of contract, not breaches of the law. However, we made clear that
such breaches could, if unchecked, enable a situation where illegality
(fraud, bribery, or corruption) might occur. We found no evidence that
this was the case.
If you are not satisfied with your response you may ask for an internal
review within 40 working days of receiving the response, by replying to
this email. You can learn more about the internal review process
at [2]https://nationalhighways.co.uk/media/a14....
If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision. The Information Commissioner can be contacted
at [3]https://ico.org.uk/make-a-complaint/ or via the address below -
Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
Please remember to quote reference number FOI/4301 in any future
communications about this response.
Kind regards
National Highways Counter Fraud Team
You can make new FOI requests and review published responses by
visiting [4]https://foiform.highwaysengland.co.uk/
References
Visible links
1. mailto:[email address]
2. https://nationalhighways.co.uk/media/a14...
3. https://ico.org.uk/make-a-complaint/
4. https://foiform.highwaysengland.co.uk/
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