Shropshire Council’s highways contract with Kier is not hitting many of its performance targets. The council is making the usual excuses. The weather was bad. Err, welcome to Shropshire. It pleads there were teething problems with the contract. Keir has a turnover of £4.5 billion. Shropshire Council has a budget above half a billion. How come these giants struggle to introduce a highways contract that costs £21m a year?
A whistleblower has submitted evidence that Shropshire Council does not properly monitor its highway contractors, Kier and WSP. The whistleblower, a Senior Quantity Surveyor who worked as a contractor for the council, said his complaints were not investigated. That’s a contravention of the council’s whistleblowing policy. Questions are to be asked in a council committee tomorrow.
The quality of Shropshire’s highways affects everyone. In 2018/19, 12% of the county’s B and C roads needed maintenance, well above the national average of 5%. It is time to stop making excuses. It is time to ensure that council taxpayers get bangs for their bucks. It is time to end the bangs and bucking people experience travelling on the county’s rural and urban roads.
The concerns raised by the whistleblower are outlined in a press release issued by the Shropshire Council Lib Dem group and questions that will be put to the Place Overview Committee on Thursday, 7 November 2019. The committee report details work by the highways contractor, Kier, but says nothing about the performance of the council’s resident engineers, WSP.
Media Release from the Shropshire Council Lib Dem Group
A whistleblower has suggested that Shropshire Council does not properly monitor its highway contractors, Kier and WSP.
A series of questions will be submitted to the Place Overview and Scrutiny Committee next Thursday September 7th by Underdale Councillor, David Vasmer, on behalf of members from Liberal Democrat Group
“We have been sent copies of a series of emails from a former Senior Quantity Surveyor who worked as a contractor for Shropshire Council monitoring the operation of the Kier and WSP contracts,” explained Cllr Vasmer. “He was very concerned about the monitoring of the Council’s contracts with Kier and WSP.
“This former contractor tried to raise his concerns with senior officers within Shropshire Council, but his concerns do not appear to have been investigated in contravention of the Council’s own whistleblowing policy.
“In order to ensure that his concerns are investigated this former Senior Quantity Surveyor passed some information to me because he was worried that contracts were not being affectively monitored.
“As a result, on behalf of Lib Dem colleagues I am tabling a series of questions to the Place Overview and Scrutiny Committee in the expectation that there will be a thorough investigation of these claims.
“The Council’s external auditors, Grant Thornton, are also being informed of the questions being tabled at the Place Overview and Scrutiny Committee on Thursday.
“Everybody in Shropshire knows that the Council’s Highways Department has not been operating effectively for some time; and since Kier took over, the situation appears to have got worse. That is why a motion was submitted to the Council Meeting in September demanding that the operation of the contract be investigated.
“The information we have received suggests that such an investigation is urgently needed, and a preliminary report be made to the next meeting of the Council. Many may not be aware that a highways officer was suspended a few months ago but no explanation was given to Opposition Councillors about this suspension. Shropshire’s Council Taxpayers deserve some explanations.”
The Kier contact and performance
The current Shropshire highways contract – known as the Highways and Environment Term Maintenance Contract (HETMC) – began in April 2018. The annual contract value is around £21 million. This is split roughly 50/50 between capital payments for structural renewal of highway assets and revenue payments for routine works and reactive repairs. Kier complete around 36,500 tasks a year including 42,300 pothole repairs, of which 43% were temporary patches.
The aim is for Kier to hit 95% of performance targets. Currently its overall performance is 93%. But that performance drops to 85% for 3,200 streetlight repairs. For 16,000 carriageway repairs, it is 87%. Keir’s performs better on emergency works which must commence in under one-and-a-half hours – 98%.
More detail is provided in tomorrow’s report to the Place Overview Committee, including arguments that Keir’s performance in the first year of the Shropshire contract was affected by operational issues, budget reductions and the Beast from the East. I do not believe the excuse about weather. The Beast from the East followed years of pathetic and expensive maintenance of the county’s highways by Shropshire Council and its previous contractor, Ringway. We are now experiencing déjà vu.
The Place Overview report says:
It is still the case that Kier still have improvements in contract delivery and performance to make.
Both Shropshire Council and Kier recognised that improvements to culture and approach to contract behaviours were required. Both organisations are committed to this.
Keir is committed to reorganising its structure and delivering IT improvements to improve performance. Although the quality of most repairs has improved, I can’t help feeling this is a repeat of the issues the council had with managing its former contractor, Ringway.
Keir Highways is part of a huge construction group which builds houses, schools, roads and railways. Founded in 1928, its turnover is around £4.5 billion a year with a profit of around £124 million before tax. In the period since the Shropshire contact was awarded, the value of shares in the group have fallen 19%.
Question to Place Overview Committee 7 November (refused)
David Vasmer, Shropshire Councillor for Underdale submitted the questions below in writing. They were refused by the council. He will ask the questions verbally. This is an old trick by a council backed into a corner. “I will answer in writing”, will be the response to a verbal question. That kicks the row into touch in the hope that it will go away. It will not go away.
I wish to ask the following questions:
- How are payments to Kier and WSP authorised?
- Are all payments linked to work completed and how is completion proven?
- What checks are there to ensure that payments are properly authorised?
- Have all payments requested by Kier been paid in full or have some deductions been made.
- Were any Low Service Delivery Deductions made.
- Have any efficiency savings on the Kier Contract been identified
- Have any advance payments in respect of Fixed Overheads been paid to Kier.
- Has there been any months when the amount paid to Kier been abnormally high?
- Have any payments to Kier been authorised for work carried out many months after this work had been carried out.
- How was the recent appointment of a new Senior Quantity Surveyor made? Was it made using an Agency or WSP?
- It has been reported that costs on the WSP contract are running at approximately 100% above the initial estimates. What is being done to bring this overspending down?
- When WSP issue their monthly Application for Payment, is a report prepared recommending payment? If so, have these reports highlighted the issue of increasing costs and made recommendations to bring these down?
- There are performance targets which WSP are supposed to achieve – how often is WSP’s performance assessed against these targets?
- In a recent advert for an Administration Assistant WSP reported that they have recently secured funding for major highway improvement schemes such as the North West Relief Road, the Oxon Link Road and the A5 Mile End Junction. How much is this extra funding and when was it agreed?
- In the advert for an Administrative Assistant WSP says that their office in Shrewsbury is “integrated with the Client due to our longstanding relationship and collaborative working practices.” This suggests that the relationship is too close. Could we be given a list of the targets that WSP are judged by and identify those targets recently added as a result of the new highway schemes they have recently started work on.
- Has the Government given final approval to all aspects of the North West Relief Road? Or does it require further approval after the application for planning permission has been resolved?