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John Tizard: Extending the FoI Act to public contracts has never been more urgent

Wednesday April 28th, 2021

For many years, there has been pressure to extend the scope of the Freedom of Information (FoI) Act to cover public procurement, contracting and outsourcing.

John Tizard

There has been some progress and warm words from government ministers but there remains a long way to go to ensure full transparency.

There are good reasons for such an extension of the Act, especially following the succession of revelations and allegations arising from government contracting over the last year during the Covid-19 crisis. However, the case for transparency predates the pandemic. The Covid-19 procurement experience should be a catalyst for immediate action by the government.

The case for including public procurement, contracting and outsourcing within the scope of the FoI Act is based on the need for transparency; to strengthen accountability; and to rebuild public confidence in how £billions of public money is being spent with the business sector. 

A starting point would be to remove the default excuse for obfuscation and secrecy – that of ‘commercial confidentiality’. In practice, there is little that can be justified as having to be protected for this reason, especially once a contract has been let. There may be some reasons for limited short-term protection during the actual procurement process, but even then this should be limited and the information made available once the contract has been let and the bidders’ ‘challenge’ period concluded.

Specifically, I would like to see the FoI Act extended in respect of outsourcing and to include:

  • all aspects of a public body’s pre-procurement decision-making, including: a strategic ‘make or buy’ decision; the assessment of the public interest in pursuing an outsourcing option, including a holistic assessment of the economic, environmental and social impact of such a decision; and the alternative options which were considered
    • relationships and communications between potential bidders and public officials/politicians prior to procurement, and throughout the period of the contract – including any attempts to ‘lobby’ to influence decision- making and/or contract management
    • all bids received once the contract has been let – see above
    • the contract terms and conditions; and any revision to these
    • client management activities and costs, both during the procurement process and throughout the period of the contract
    • the contractor’s operational and financial performance 
    • employment standards
    • the contractor’s internal financial flows and internal ‘trading’ within the company and its subsidiaries; and similar throughout its supply chain
    • the financial rewards and incentives for senior executives in contracting companies, which could influence the performance of the contract
    • the tax policies and practices of companies contracting with the public sector
    • the ownership arrangements, structures and domiciliation of contractors

I also believe that the FoI Act and the above provisions should apply throughout the supply chain and not simply to prime contractors.

Further, the Information Commissioner’s powers should be strengthened – in particular to have the ability, when there is a public interest in so doing, to override requests to withhold or conceal information on grounds such as ‘commercial confidentiality’. The Commissioner should also be able to set time limits on withholding information, even when there are grounds for doing so in the short term. 

Some proportionate adaptation of the above could apply to charities, small social enterprises and even start-up SMEs. However, it is key that they should not be exempt from the principles underlying these proposals – and most certainly not from the need to be transparent.

Whilst prime responsibility for compliance with the FoI Act should rest with the public contracting body, there is also a need to ensure that contractors are bound to compliance and provision of data and information, both through the contracts and statutorily; and both the public sector and contractors should be subject to statutory requirements to comply.

If contractors or potential contractors are not prepared to accept such an approach, they have a straightforward choice: comply or opt out of public service contracting. This should be an explicit condition of operating in public service outsourcing markets.

Whilst extending the scope and reach of the FoI Act, many of the objectives for the proposals set out above could and should be pursued by government and the wider public sector for all significant public service outsourcing contracts through their procurement and contracting practices, and through the contracts themselves.

I have majored here on proposed reforms to cover outsourcing, but similar principles could also be applied to ‘significant’ contracts for goods and would have equal application for when corporates or major not-for-profits apply for government grant support.

Public confidence in government relations with business and in public contracting has been steadily undermined for some time – and has taken a particular tumble in the last year. Whilst there are strong grounds to move on from public service outsourcing, as I have argued in Government Opportunities and elsewhere many times, as long as there is such outsourcing the public deserves to know all about it. We have a right to know how every pound of public money is spent and to what effect.

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