Private finance, public info

Richard Thomas discusses how a freedom of information Bill will impact on those involved in Private Finance Initiative projects. Richard Thomas is director of public policy at Clifford Chance.

Freedom of information means most to campaigners, journalists and civil servants. But it is about to become meaningful for PFI contractors, both as an opportunity and as a threat.

The Government published its long-awaited White Paper on freedom of information at the end of last year. The Bill is likely to be introduced into Parliament before the end of 1998.

The new legislation will impose obligations on government departments and virtually all other public sector bodies to publish a wide range of information about their activities. It will also give any individual or organisation a new legal right of access to records, files and other information on demand.

The Whitehall tradition of official secrecy will go in favour of disclosure. Information will have to be provided unless a decision to withhold it can be justified by reference to a series of harm tests or by reference to a specific public interest.

Non-disclosure might be justified, for example, by establishing that there would be 'substantial harm' to national security or to the commercial confidentiality of a third party.

The public sector holds a treasure trove of information of value to the business community. Those seeking to secure PFI and other governmental contracts will be able to rely upon the new provisions to secure detailed background information built up by departments, agencies and local authorities before the launch of each competitive exercise.

It should also be possible to secure information about the structures, charges and costs involved in previous and current projects. Many suppliers will doubtless try to get access to information about their competitors. Indeed, the White Paper expressly acknowledges that 'unsuccessful bidders need to know why they were unsuccessful and how they could succeed next time'.

Many PFI contractors may not be keen to see disclosure about their own activities. There could be a double whammy here.

First, public sector bodies will have to make available more information about their contracts and respond to requests for specific information.

Second, and perhaps surprisingly, the Government also proposes to apply the freedom of information provisions to 'information relating to services performed for public authorities under contract'.

This will be secured by 'appropriate requirements' in individual contracts between public authorities and contractors. This could well mean that a contractor will be obliged to disclose information directly in response to a request made under the Act.

Journalists, trade unions, environmentalists and others will not be slow to request information about operational aspects of a particular PFI contract. But PFI contractors are likely to want to resist disclosure of sensitive information. Here the various grounds to justify withholding information will form the battleground.

'Commercial confidentiality' is likely to be the exemption of greatest importance. It will be necessary to show that the information is confidential and, in addition, that disclosure would substantially harm the commercial interests of the supplier or contractor.

Commercial confidentiality has not yet been defined, but is likely to reflect the need to safeguard competitive positions. However, the concept has already caused some problems under the current (voluntary) Code of Practice on Access to Government Information.

Under the code, there has been no uniform approach from government departments on releasing information such as external consultants fees.

In whatever way the concept is defined, the Government is signalling that commercial confidentiality cannot be used as a blanket exemption. PFI contractors are used to signing detailed confidentiality agreements, but this approach is likely to change significantly.

As the White Paper says: 'For the public it is important to know how much central government services cost, no matter who provides them.'

Disputes about the right to know will be decided by a new Information Commissioner. Anyone aggrieved by a decision to withhold information can appeal to the commissioner, who will review the issues afresh.

It will be a contempt of court for anyone to ignore a disclosure order. There will be no appeal from the commissioner, but it will be possible to seek a judicial review in the courts if there has been improper exercise of powers.

Contractors who are opposed to disclosure of information by a public body may also have the right to make representations before a decision is made, and may have a right to appeal to the commissioner against a disclosure decision.

The Government has not yet made a decision about these 'reverse freedom of information' issues. There is likely to be strong business support for such third-party rights.

If it does happen details need to be worked worked out. How, for example, would a contractor know that a department had received a request for information relating to its activities?

So far, the Government has not progressed beyond White Paper stage. But it is likely many PFI contractors will be lobbying during this process to minimise the adverse implications for their business.

And, yes, the legislation probably will mean disclosure of legal fees paid by government departments and other public bodies for PFI projects.