UK: Greater Scrutiny for Public Sector Contractors: The ICO’s Proposals for Reform to the Freedom of Information Regime

The Information Commissioner’s Office (“ICO“) has recently published a report detailing its recommendations for reform of the Freedom of Information Act (“FOIA“) and the Environmental Information Regulations (“EIR“). In the report the ICO calls to extend the scope of FOIA/EIR legislation to provide greater transparency on external suppliers to Government, noting the considerable impact they have on UK public life.

This article looks at the recommendations in more detail and considers the potential impact if the changes are adopted.

Recommendations

Extend FOIA to outsourced service providers

Under section 5 of the Freedom of Information Act 2000 (FOIA), the Government has the power to designate private sector suppliers as a public authority for the purposes of FOIA legislation (and therefore be subject to FOIA requests and issue publication schemes) if they are exercising functions of a public nature. To date, no private sector organisations have been designated under section 5, although many contractors who perform public tasks under public ownership are in scope.

The ICO believes this is anomoulous and . They point to the example of housing associations some of whom are publicly owned by local authorities (and therefore subject to scrutiny under the FOIA), whilst others are privately owned (and therefore not). As the Grenfell Tower fire tragedy shows, housing associations perform an important public task and there is a strong ‘public interest’ in having scrutiny over their activities whether they are in public or private ownership. The ICO’s view is a greater number of organisations exercising functions of a public nature should designated under section 5, with a more flexible approach is adopted to identify key ‘public interest’ contractors, assessed by a range of relevant factors which takes into account the nature of the work undertaken, contract value and duration, as well as the transaction value.

Extend EIR to outsourced service providers 

The ICO is also proposing that the Government amend the EIR, to allow for requests to be made to private sector bodies under that legislation. The ICO notes in the report that the EIR do not permit the designation of organisations exercising functions of a public nature  in the same way as section 5 FOIA. The report states that, although a broader definition of public authority applies under the EIR, new bodies designated under section 5 FOIA orders are not automatically covered by the EIR. As a result, organisations exercising functions of a public nature and which hold environmental information are not always caught by the current scope. The ICO is recommending a change to the scope of the EIR to match the FOIA position noted above.

Clarify the scope of the FOIA/EIR where information is held by an outsourced entity

The report goes on to suggest amendments to section 3 of the FOIA and regulation 3 of the EIR. These sections relate to the ‘held on behalf of’ provisions, which determine that information can, for the purposes of the legislation, be held by a public authority if it is held by another person on behalf of the authority. Information which is held by a third party on behalf of a public authority can be accessed through the legislation. The provisions, however, do not currently clearly identify what information regarding a public sector contract is held for the purposes of the legislation and, therefore, what information is accessible to the public. The report suggests that there should be greater clarity in this area in order to determine what information can be subject to the ‘held on behalf of’ provisions.

Consequences

The proposals are likely to have a significant impact on suppliers to the Government who are delivering public services on an outsourced basis. Currently FOIA/EIR has a limited impact as it applies only indirectly where a request received by a public authority relates to work which they may be performing. In the future, they may need to respond to FOIA/EIR requests directly. This could see a step change in transparency and potential exposure to direct public scrutiny as well as commercial risk which will need to be very carefully managed. It will also undoubtedly drive greater sensitivity and stricter controls around document classification and management, as well as a more nuanced approach to transparency provisions within negotiated contractual terms with between contractors and public authorities.

Ultimately we need to wait to see how the Government responds to the ICO’s proposals. However, following the Grenfell tragedy and the collapse of Carillion, the outsourcing of public services and functions is undeniably topical and a matter of public concern and the ICO’s proposals may well be to a more receptive audience than in previous times when the private sector voice may have been more loudly heard.

Andrew Dyson (Partner), James Clark (Senior Associate) and Christopher Wilkinson (Trainee Solicitor), DLA Piper UK LLP