Insuring transparency isn’t the cost of outsourcing

6 March 2014

By Steve Wood

Wood is the Head of Policy Delivery at the UK Information Commissioners Office. This article appeared in the ICO blog on March 5.

As talk of austerity continues to echo through the corridors of the public sector, the value of cost savings grows ever-more attractive. And if a CBI report is to be believed, there’s £22.6bn of them to be found in opening up public service markets to independent providers.

Such outsourcing is clearly attractive to those in charge of the purse-strings and it is part of the current reality of how the public sector works, but it’s important that transparency isn’t the cost of those savings.

That concern might seem unfounded on the surface. The Freedom of Information Act (FOIA) provides for “the disclosure of information held by public authorities or by persons providing services for them”, which would seem to include information held by any contractor.

And to some extent it does: information held by someone else on behalf of the authority is accessible under FOIA. But in practice this can be complex.

Let’s take a simple example. A local authority contracts out the management of a leisure centre to a private company. Is information about the number of people using the gym the company’s information, or does the company only hold it on behalf of the local authority, because it’s delivering the contract? If it’s the former, then a resident who wanted to compare usage of the gym before and after the contracting out could not use FOIA to obtain that information. This is a small-scale example, but essentially the same question arises with multi-million pound contracts awarded by government.

The concern is that if significant information about the operation and delivery of public services is no longer covered, then we are witnessing a gradual reduction of the scope of FOIA. At the ICO, we’ve often talked about the importance of transparency following the public pound. If it doesn’t, we risk reductions in transparency, efficiency and public trust.

These concerns have prompted a number of calls for more transparency about outsourcing, from the likes of the National Audit Office and the Institute for Government.  We’ve also welcomed the CBI’s “principles for the transparency of public services”, published as part of its recent Licence to operate report. A common theme in those reports was that proactively publishing the value of contracts was not enough, and that greater openness to public scrutiny was required.

Government Plans Answer

It’s an issue the Government is aware of, and has moved to address, with the recent UK National Action Plan for open government, committing to “take steps to ensure transparency about outsourced services is provided in response to freedom of information requests.”

The plan proposes to do this through the use of contractual provisions. That approach appears to be the most realistic solution from our perspective, and this also was the approach advocated by the Justice Committee in their 2012 report on the post legislative scrutiny of FOIA.  (There is also the option of providers delivering public services being designated under section 5 of FOIA  but given the volume and complexity of outsourcing improving how the current system works appears to be most practical and flexible solution at the present time.)

But this contractual provisions approach would need a significant step forward from the general clauses we currently see in contracts, in two areas particularly.

Standard Terms, Consistency Needed

Firstly, we need standard contract terms that are more explicit about who ‘holds’ information in FOIA terms. This is not the same as specifying that certain information ‘must’ be released in response to a FOIA request – each request has to be considered on its merits and exemptions may apply – but it would give clarity on where the public authority has a right of access to certain information, or whether information reverts to the authority on termination of the contract.

The second area is consistency. We’ve observed inconsistency and sometimes a lack of real partnership working between the public sector commissioners with their outsourcing provider. Over-caution can dominate from either side. A “transparency by design” by approach is needed, with both working closely together to agree an approach to information held, disclosure in response to requests and proactive disclosure, within the letter and the spirit of FOIA.

It’s a complex area, and it’s one we’ll continue to explore. In January we organised a roundtable discussion in conjunction with the Institute for Government and the Confederation for British Industry (CBI). The meeting drew together stakeholders, including both those who provide outsourced services and those who procure them, as well as those with an interest in access to information and open data. We’ve published a note of the meeting today.

We’re continuing to consider what further guidance the ICO should issue and what further guidance or tools, such as contractual terms, could be generated collaboratively.

As part of that work, we’d be interested to hear of examples of contract terms relevant to FOIA, good or bad. We’re also interested in different examples of how public authorities are working successfully with providers. We know there are examples of good practice out there and we want to hear about them.

 

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