Last week MPs debated the future of the FOI act. In their discussions they raised concerns and warnings about private contractors, who are publicly funded, not being subject to the FOI laws. 

This posting is a supplement and further reading to the post Government will not extend Freedom of Information Act to private contractors using public money.

It contains the the full statements made by the MPs in attendance of the debate on their worries about these companies.

The full debate can be found on here on Hansard. 

Sir Alan Beith 

I said that I would mention a significant problem, and it becomes more significant with each new announcement that the Government want to use the private sector as a major provider of public services. The problem is how freedom of information is applied to private organisations, commercial companies or, indeed, voluntary sector bodies that carry out public functions. There was some uncertainty about the interpretation of section 3(2)(b) of the Act, which provides that information held by a private company on behalf of a public authority with which it has a contract is subject to the Act, but other information held by such a company is not. It is quite reasonable that other information should not be covered—the Freedom of Information Act does not apply to the commercial activities in the private sector of a commercial company—but there is a genuine and appropriate concern about what happens when such a company does what would otherwise be done by a public authority.

We favoured the use of contractual terms to deal with the issue, as currently happens in many cases. The body that commissions the services, whether a probation or health trust or a Department such as the Ministry of Justice, should ensure that the contracts that it writes will protect the access that it requires to all material relevant to potential freedom of information requests, so that it can respond to any freedom of information bid.

The Government have broadly agreed with that conclusion and have helpfully gone further by suggesting that they will amend the section 45 code of practice to encourage public authorities and contractors to provide information on a voluntary basis, going beyond the minimum covered by a request to an authority. It seems to us that that openness follows the public money, in just the same way as the Public Accounts Committee wants accountability for spending to follow the public pound, and that the best way to achieve that is not to put a commercial organisation in the rather confused position of being partially subject to FOI, but to put it under contractual obligations that, if it carries out a service on behalf of the taxpayer, it is obliged to the body that commissions it to provide the information. 

Sir Richard Shepherd (Aldridge-Brownhills) (Con)

However, I seek to discuss the national health service and the Health and Social Care Act 2012.

Under the current NHS reforms, the new commissioning bodies—clinical commissioning groups and the NHS Commissioning Board—will be subject to the FOI Act. However, the private sector contractors with whom contracts are held will not be covered by the Act. The contracts themselves will contain disclosure requirements along the lines of those already found in the standard NHS contract:

“Where the Provider is not a Public Authority, the Provider acknowledges that the Commissioners are subject to the requirements of the FOIA and shall assist and co-operate with each Commissioner to enable the Commissioner to comply with its disclosure obligations under the FOIA. Accordingly the Provider agrees…that this Agreement and any other recorded information held by the Provider on the Commissioners’ behalf for the purposes of this Agreement are subject to the obligations and commitments of the Commissioners under the FOIA”.

Obviously, the term “commissioners” refers to the commissioning bodies.

Those provisions require some unpicking. The requirement that providers co-operate with commissioning bodies to comply with their disclosure requirements under the Act is circular. The commissioning body’s obligations under the Act are merely to disclose information that it holds itself or that the provider holds on its behalf. The real question is what information is held on the commissioning body’s behalf.

The contract itself specifies that various types of information are subject to FOI or have to be published or provided to the commissioning body on request. That includes information about the service specifications, prices and payments, numbers of patients treated, time taken to treat them, performance quality reports against a range of specific indicators, figures on MRSA and clostridium difficile infections, and reports on complaints, equality monitoring and certain other matters. There are also obligations to comply with NHS dataset requirements. In addition, the commissioning body may request any other information that it reasonably requires to monitor the provider’s performance in relation to the agreement. However, if the commissioning body does not consider that it requires particular information to monitor the provider’s performance, the information will not be available under FOI.

Let us suppose there are suspicions about the use of outdated, or potentially substandard, or even contaminated supplies by hospitals. For an NHS hospital, the Act could be used to obtain details of stocks of the product, analysis results, correspondence with suppliers, minutes of meetings at which the problem was discussed, concerns about the issues raised by staff and details of how they were handled, as well as information showing what measures were considered, why particular options were rejected and what was done.

Such information would not be available in relation to independent providers treating national health service patients. A commissioning body may take the view that it does not require that information to monitor the provider’s performance under the contract because it does not believe that there is a real problem, because it does not believe that the information sought by the requester would throw light on it, or because it is already feels satisfied, from its knowledge of the provider, that any problem would be properly handled. In that case, it seems unlikely that there would be any contractual obligation on the commissioning body to seek the information or on the provider to produce it. In cases of doubt, we think contractors would be likely to vigorously oppose any attempt to interpret a contractual provision of that kind expansively.

A further problem is that key aspects of the Act cannot apply to contractors. The Information Commissioner’s powers relate only to public authorities. He cannot investigate a contractor’s claim that it does not hold or cannot find the information needed to answer an FOI request. His power to serve information notices, requiring public authorities to supply him with information required for an investigation, does not extend to contractors. He cannot serve a decision or enforcement notice on a contractor, or take action against a contractor that appears to be failing to comply with its contractual obligations to assist with FOI requests.

The offence that applies to a public authority that deliberately destroys, alters or conceals a requested record to prevent its disclosure does not apply to a contractor that does so to prevent the authority disclosing it in response to an FOI request. Once a contract has expired, any contractual disclosure requirement may lapse, so removing the right to information about past events. Even if the contract stipulates that disclosure requirement survives, it could only be enforced by a civil action for breach of contract against the contractor. The prospect of such action being taken for failing to assist in replying to an FOI request is highly implausible.

The FOI Act envisages that the contractors who provide a service on behalf of a public authority, which it is the authority’s function to provide, can be designated as a public authority subject to the Act in its own right. The use of that provision to make contractors directly subject to FOI should now be considered. Failing that, the Act should be reassessed in light of contracting out and amended to ensure that the public’s rights to information about public authority services and functions are fully preserved when they are provided by contractors. There is real value in that, and from the Government’s point of view, too. Confidence in the Health and Social Care Act, for instance, and the commissioning process would be reinforced.

There is a grave suspicion—this is what lies behind the idea about privatisation of services in the national health service—that there will be the opportunity for outside contractors and so on to pick and choose and that they will not be liable to provide to the public the basis on which they can judge whether a contract is appropriate. That is the whole purpose of freedom of information—that we can acquire the information that can give us the ability to make a judgment on the probity and priorities that operate within those who are essentially, if not totally in many instances, funded from the public purse. There is a direct link. They would not be in business without public moneys and contracts coming their way. That is why there is an urgency about making this point and examining this question. I commend it to the Justice Committee. Thank you, Mr Hollobone, for your patience.

Andy Slaughter (Hammersmith): 

My right hon. Friend the Member for Tooting (Sadiq Khan), the shadow Lord Chancellor and my boss, made it very clear in his Labour party conference speech last year that the next Labour Government would extend FOI to

“cover the delivery of public services”,

such as prisons, schools and hospitals, by private companies and the voluntary sector. That must be right. It is right in any event, but the contractual roles that organisations —we know the usual suspects: Capita, Serco and G4S—are taking on not only involve huge additional powers, but often mean that whole areas of Government service, policy and decision making are devolved to them.

I was talking to the Public and Commercial Services Union this week about the fact that it is envisaged that the criminal fines enforcement process—collection—be passed to a private company on a very long contract that delegates not only administrative, operational and decision-making powers, but some powers that until recently were judicial.

The Parliamentary Under-Secretary of State for Justice (Mrs Helen Grant):

I am aware of some Members’ concerns about the position under the Act of contractors and other companies that provide public services. The challenge that outsourcing public services poses to transparency is real, and it is one that we have sought to address proportionately. We do not currently propose the formal extension of the Act to providers of outsourced public services. We prefer the Justice Committee’s recommendation that contractual transparency clauses be used and enforced to ensure that freedom of information obligations are met.

We strongly encourage public authorities and contractors alike to go further than the minimum requirements in the Act and voluntarily to provide more information. To that end, we will issue guidance that sets out the circumstances in which we want to see further information released. My hon. Friend the Member for Aldridge-Brownhills (Sir Richard Shepherd) and the shadow Minister raised powerful concerns about this issue, but I reassure them that if our proposals do not have the desired effect, formal extension of the Act can be considered and is always possible.

We have sought to balance the need for transparency with the need to minimise burdens on business and to encourage active participation by bodies large and small in the provision of public services. Some people might not consider that enough, but it is a light-touch, good approach requiring the co-operation of public authorities and contractors alike. As I said, however, if that approach yields insufficient dividends, we will consider what other steps we need to take to ensure accountability, and that includes formal extension. I hope that provides reassurance.

Sir Alan Beith

The hon. Member for Aldridge-Brownhills (Sir Richard Shepherd) has been a doughty fighter for freedom in general and freedom of information in particular, and he raised some interesting points about how the provisions for private contractors can be made to work. All the examples he gave should be covered by freedom of information. The only question is whether the contracting method will work as a way of dealing with them. I am sure that he, as an experienced business man, will recognise certain difficulties: it would seem inappropriate for example, for freedom of information to apply to a company’s deliberations about whether to bid for a contract. That is the company deciding in which direction to take its private sector work. However, once it is engaged on the contract, its quality of service, the disciplinary measures that it uses to maintain that quality, and all such things are freedom of information matters. We should ensure that the contracting arrangement can cover them. If it cannot, we shall have to think again about our approach.

Sir Richard Shepherd:

The whole point, though, is of course that it is about the money. For instance, when private contractors bid they would also like to know what their rivals are bidding, and the secrecy behind that process conceals true costs and is not an impetus to competition. That point was made by Tarmac in the original discussions that Rhodri Morgan had long ago in the Justice Committee’s predecessor Committee. Tarmac’s directors were advocating that they wanted their contract details and their costs—in other words, their bidding prices—to be available, because they believed that their competitors were putting in false under-bids that they could not sustain and that would fall on the public purse. That, of course, was their argument, but there are good reasons why that information should be made public.

Sir Alan Beith:

We have also seen the implications of all that in areas such as contracting for rail franchises. However, it is a difficult balance to strike: having a healthy private sector, which can also usefully take up Government contracts, and also having a Government mechanism that properly supervises those contracts and ensures that freedom of information requirements are met. We have suggested one approach to strike that balance. We hope that it can be made to work. However, if it does not, then—as the Minister herself conceded—we will have to think again about how we satisfy that fundamental requirement in relation to public services.

 

 

 

I am a journalist and author. I am a staff writer at the UK edition of WIRED magazine and in 2015 my book, Freedom of Information: A Practical Guide for UK Journalists, was published. I created FOI Directory in 2012.