Follow the money: opening up access to information

Ian Adderley says Freedom of Information legislation must apply to private companies running public services.

From railways and utilities to the very recent privatisation of ‘the Queens Head’ (as Thatcher once referred to the Royal Mail, stating she wasn’t prepared to see it privatised) public services have unfortunately been placed in the hands of private companies. In so many areas private companies are contracted to deliver public services, paid from the public pound.

Now whether you like privatisation or not, it is hard to argue against the principle of accountability. Where public money is collected and spent – whether by politician or plc – it is important we know how it is being spent. It is important that accountability follows the money. 

This sounds like a simple proposition. Yet it is far from the reality. 

The Freedom of Information Act, an important piece of legislation helping to bring about transparency and accountability, currently applies to public authorities but not to those private companies delivering public services. This needs to change.

Arguments are put forward to the effect that there is no need to bring a private company within the scope of the Freedom of Information Act because the relevant public authority scrutinises performance and ensure the public pound is not misspent. 

However we only have to look as recently as a few months back as G4S were referred to the Serious Fraud Office by the Justice Secretary after it appeared they’d been charging the government for tracking the movements of dead people.

There was a clear lack of accountability. A clear lack of transparency.  And a clear lack of public information. 
Compare this to the position of say, local authorities. Local authorities are there on the frontline, responsible for the provision of vital public services. Where services are provided directly by local authorities we have access to information. And we have accountability. At a local authority level there are overview and scrutiny panels – filled with councillors from all sides scrutinising the work of the council’s executives. Importantly – there’s also local democracy. The ability to oust those who fail to live up to expectations. And, last but by no means least, let’s not forget that local authorities are subject to the Freedom of Information Act, allowing anyone to obtain information about what the council is doing and how it’s spending the public pound.  

We have large private companies who, through contracts to deliver public services, have annual budgets that dwarf those of local authorities. But aside from hoping that at some point the Public Accounts Select Committee may haul them over the coals, we can obtain little to no information about they’re spending our public pound. 

The public pound – whether spent directly by politician or plc – ultimately comes from the same source: the public. However our access to it depends on its eventual spender. There is a clear case of information asymmetry. Access to information does not follow the money. 

This seems at odds with the will of the Prime Minister who said in a Telegraph article the other year: “Information is power. It lets people hold the powerful to account, giving them the tools they need to take on politicians and bureaucrats.” And that “information is a national asset, and it’s time it was shared”. However perhaps here we see again one of those instances where his words apply to those in the public sector, but not his friends in the private sector.

With the increasing privatisation of public services we face an erosion of access to information. We should therefore extend the use of the Freedom of Information Act so it applies to all private companies receiving public money.

Whilst it is true that some contracts do already contain clauses providing for access to information there is by no means a uniform approach. And public awareness of the right to access certain information held by private companies is limited at best. 

This idea is not new. The Public Accounts Committee, in its report on the Work Programme said:
“We remain of the view that in the interests of transparency, where private companies provide public services funded by the taxpayer, those areas of their business which are publicly funded should be subject to the Freedom of Information Act provision.” (para 6)

And the Justice Committee in its post-legislative scrutiny of the Freedom of Information Act said: “The right to access information must not be undermined by the increased use of private providers in delivering public services”. (para 239, page 88)

Unsurprisingly the CBI came out against the idea on the grounds of commercial sensitivity. It is true that there are commercial sensitivities. But these commercial sensitivities exist in the public sector too. 

Private companies have an unfair advantage at present. They can obtain public authority performance data to then use this to undermine in-house delivery options. Whereas public authorities have limited access to the data of private companies they may wish to compete against.

The select committees had caveats on their proposals. The Justice Select Committee didn’t want to see the Act expanded to specifically include the large private companies. And the Public Accounts Committee felt the Act should only apply within companies to those areas that are publicly funded. 

But we should be bolder than this.

It would be far too easy undermine the Act by moving money around the company to make use of the Public Accounts Committee’s caveat. Private companies receiving large public contracts can, and should, be made subject to the Freedom of Information Act, in their entirety. 

To bring these companies under the Freedom of Information Act would be relatively easy and quick. The Minister would simply need to use the power under section 5 of the Act to designate the companies with large public contracts as public authorities for the purposes of the Act and thus bring them within the scope of the Act. The Public Service Users Bill represents an important opportunity to make this happen.

It is time that private companies with public contracts are forced to realise that with public money comes public accountability. It is time access to information followed the money.