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Public-private contracts could lose all secrecy after Scottish decision

The Scottish Information Commissioner has ordered a health board to disclose the details of a private finance initiative (PFI) hospital deal worth ₤1.2 billion. The decision could have far-reaching consequences, says a freedom of information law expert.29 Oct 2007

Advert: The Outsourcing Summit, London, 19th and 20th November 2007Commissioner Kevin Dunion said that NHS Lothian could not refuse May Docherty’s request for the contract to build and operate the Edinburgh Royal Infirmary on the grounds of commercial confidentiality. He ordered the release of the contract between NHS Lothian and Consort.

Consort has said that it would consider the release of the contract an actionable breach of confidence, but Dunion said that the idea that the entire contract was confidential could not be right.

“[NHS Lothian] sought to claim that a blanket exemption of confidentiality covered every one of the thousands of pages of this detailed contract,” said Dunion. “However, other than broadly indicating why Consort Healthcare did not wish the information disclosed, NHS Lothian provided me with virtually no arguments to justify withholding the contract. As a consequence I have ordered that the contract must be disclosed."

Dunion went further late last week when addressing a conference on FOI in Edinburgh. He said that he wanted to make sure that companies involved in the increasing privatisation of public services were accountable to the public.

“When council housing is transferred to a housing association or when a charitable trust is established to run local authority leisure and recreation services, local people and employees may find that they have lost freedom of information rights at a stroke, as these bodies are not regarded as public authorities,” he said.

The exposure to public scrutiny of PFI contracts has been welcomed by trade unions, but it could make it harder for government agencies to find companies prepared to enter into agreements with them.

A freedom of information expert said that though Dunion’s ruling will not set a precedent outside Scotland, it could encourage other people to seek similar information.

“The Scottish FOISA case opens the question as to whether a contract between a public sector body and a private sector body can remain confidential if there is public controversy surrounding the contract and even if there is a 'confidential annex' to the contract,” said Dr Chris Pounder of Pinsent Masons, the law firm behind OUT-LAW.COM.

"The Scottish Information Commissioner's decision is in favour of publication of the complete PFI contract. That might not be the decision that could be arrived at under English FOI law. However, one can see that this decision will encourage FOI requestors in the UK to request any number of PFI contracts and possibly, in future, Olympic construction contracts, nuclear power plant contracts and IT procurement contracts.”

Pounder said that in controversial cases, the controversy itself would be likely to make a case for release of contractual information under FOI legislation. “This is especially if things have gone very wrong as this helps the argument that the public interest is served by complete disclosure of the contract", he added.

In a separate development, the UK government has just launched a consultation on the extension of FOI legislation to contractors or companies which “carry out functions of a public nature”. This makes it more likely that private IT contractors who deliver outsourced services will eventually need to handle FOI requests, according to Pounder.

Footnote: Dr Chris Pounder was a consultant with Pinsent Masons until September 2008. He now runs a new training business, Amberhawk.

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