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Commercial confidentiality clauses allowing private firms to avoid disclosing public information, say MPs


Businesses that are hired to do work for the Government and other public bodies are using "commercial confidentiality clauses" in contracts to inappropriately justify the non-disclosure of the cost of the contract and other public information, a Parliamentary committee has said.

The House of Commons' Public Accounts Committee said it was "concerned" about the "non-disclosure of data" by contractors and urged the Government to act to ensure disclosure requirements are set out in public bodies' contracts with firms.

"If transparency is to be meaningful and comprehensive, private organisations providing public services under contract must make available all relevant public information," the Committee said in a report into the Government's 'transparency agenda', which was established to encourage more openness and accountability around public sector spending and targets attainment.

"The Cabinet Office should set out policies and guidance for public bodies to build full information requirements into their contractual agreements, in a consistent way. Transparency on contract pricing which is often hidden behind commercial confidentiality clauses would help to drive down costs to the taxpayer," it said. "It is vital that we and the public can access data from private companies who contract to provide public services. We must be able to follow the taxpayers' pound wherever it is spent."

"The way contracts are presently written does not enable us to override rules about commercial confidentiality. Data on public contracts delivered by private contractors must be available for scrutiny by Parliament and the public. Examples we have previously highlighted include the lack of transparency of financial information relating to the Private Finance Initiative and welfare to work contractors. The Cabinet Office acknowledged the need for consistent guidance in this area, and told us that forthcoming departmental open data strategies should deal with this issue," the Committee said.

In its report the Committee criticised the Government's approach to implementing its transparency agenda and said that public bodies in the same sector often release different standards of data that are difficult to compare.

The public's engagement with data released through the Government's data.gov.uk website has also often been poor because of the way it has been presented, the Committee said.

It recommended that the Cabinet Office ensure that data published is accessible and easy to understand. The Cabinet Office should also set out "clear criteria" that sets out when disclosed information should be 'repackaged' either by Government or third parties in order to "promote public use" and "encourage user choice," it added.

In addition to the open-data agenda pursued by the Government, UK public sector bodies and Government departments are also required to adhere to freedom of information (FOI) laws. Under the FOI Act individuals have a general 'right to know', which entitles them to be provided with information held by those bodies when they request it. However, those bodies can legitimately withhold information requested in some circumstances.

In addition, the Act also allows a Government department to issue a 'Ministerial veto' when there is a dispute between a public body and the Information Commissioner over whether an exemption to disclosure has been correctly applied in the public interest. The Information Commissioner is responsible for ensuring compliance with the Act.

On Tuesday the Information Commissioner's Office (ICO) expressed its "disappointment" at the decision of the UK's top legal advisor, Dominic Grieve QC MP, to use the Ministerial veto to prevent the disclosure of information contained in the minutes of two Cabinet meetings held in 2003. At the meetings Cabinet Ministers discussed commencing military action against Iraq.

Last month the Information Commissioner ruled (9-page / 2.23MB PDF) that the Cabinet Office should disclose the minutes from the two meetings. This was despite the Cabinet Office claiming that the information was exempt from disclosure under the FOI Act because it related to "the formulation or development of government policy" and "Ministerial communications".

However, the Information Commissioner had said that the public interest in disclosing the material outweighed the public interest in withholding the information from public scrutiny.

"The decision to go to war with Iraq was of exceptional gravity and controversy, and continues to be a matter of public debate," the Commissioner had said in his ruling. "He therefore considers that there is a significant and continuing public interest in disclosure of the requested information in this case, in order to serve the interests of accountability and transparency and to inform the public debate surrounding a decision seen as controversial and significant both at the time and since."

However, Attorney General used the Ministerial veto to block (9-page / 2.23MB PDF) the disclosure of the minutes. Grieve was responsible for making the decision as he is the only minister to have access to the previous Government's papers. He said that the "public interest favours the continued non-disclosure of the information" and that the Cabinet Office had complied with the FOI Act.

He said that disclosing details of Cabinet discussions "on matters of such gravity and controversy" could prevent "frank discussion" between Ministers on those topics and cause decisions to take place in "informal channels" where they may not be recorded and where there may be a lack of accountability and rigour. The Information Commissioner had "underestimated" those concerns, Grieve added.

It is the second time a Government Minister has vetoed the release of the minutes after Labour's Jack Straw first prevented them being disclosed to an FOI request in 2009. The Information Commissioner had said he had been obliged to revisit the more recent request for the disclosure as he must review each case in light of compliance with the FOI Act. 

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