Lord Young of Cookham (Con)
My Lords, I begin by thanking the noble Lord, Lord McNally, for securing this debate and for the speech he made introducing it. This is a policy area in which he has great expertise, and it comes as no surprise that, in his own words, he is campaigning for further reform and updating of the original FoI Act. I am grateful to other noble Lords who have spoken, each bringing their own interests to the debate: in the case of the noble Lord, Lord Shipley, local government and housing; in the case of the noble Lord, Lord Scriven, tourism in Yorkshire; and in the case of the noble Lord, Lord Tunnicliffe, his experience of managing contracts when he was in charge of London Underground. I take note of and encouragement from what the noble Lord, Lord McNally, said at the beginning—that he has very low expectations for my response and that his speech was a bit too PBL Committee for a slot in the next Queen’s Speech. He made it clear that he was not expecting any exciting announcements at the Dispatch Box and he will not be disappointed.
The FoI Act is a pillar upon which open government operates, and the Government are committed to supporting its effective operation. As the noble Lord said, it underwent post-legislative scrutiny by the Justice Select Committee in 2012, and in 2016 an independent FoI commission, which the noble Lord referred to, led by the noble Lord, Lord, Lord Burns, carried out an extensive and thorough review of the Act to consider whether it still ensured an appropriate balance between transparency on the one hand and the legitimate need for a private space for advice and discussion on the other, and also whether the costs of FoI were proportionate to its many benefits.
Overall, the commission found the Freedom of Information Act to be working well. It said:
“We do not expect that these will have a dramatic impact on the use of the Act, or on the range of information which is made available under it”.
It looked at the issue of private contractors providing public services—one of the themes of our debate this evening. By then, the principle of outsourcing was well embedded in government policy. It concluded that,
“extending the Act directly to private companies … would be burdensome and unnecessary”.
The Government welcomed the recent report— a landmark report, in the words of the noble Lord, Lord McNally—by the Information Commission and of course it is right that the Information Commissioner and the Government keep the workings of the Act under review because, as the noble Lord said, the environment in which we operate is changing. The Act covers more than 100,000 public authorities and has been in operation for more than 14 years, so of course we should keep it under review.
As the noble Lord, Lord McNally, said, the Information Commissioner laid a report before Parliament in January this year which examined how the Act engages with public sector contracts and information held in relation to those contracts by private companies. The Government carefully considered the report and responded to the commissioner on 24 May and placed a copy in the Libraries of both Houses. I note what the noble Lord, Lord McNally, said about his disappointment with our response. The noble Lord quoted from the letter from Chloe Smith. Perhaps I may have one quote of my own. The Minister made it clear that,
“as more public services are contracted out to the public sector, it is important that they are delivered in a transparent way, to ensure accountability to the user and to taxpayers”.
After the Information Commissioner published her report, we published The Outsourcing Playbook in February 2019. It introduced a package of measures that will improve decision-making, quality of service and value for money when government outsources to the private sector. One commitment was to increase accountability and transparency by publishing key performance indicators for all government key contracts. Although this government initiative was started before the IC presented her report to Parliament, it reflects the commitment that she asked for of further transparency from government with regard to contractors. I hope that noble Lords will regard that, in part, as a response to the accusation that the Act is not fit for purpose.
In addition, the Cabinet Office has created a transparency and data team, which has been given the mandate to proactively publish government data. It is continually looking at how the range of information published by government can be expanded and made as useful as possible to citizens, business, the voluntary sector and government itself. The open contracting data standard was put into place in 2016 and ensures that citizens can see a clear public record of how government money is spent. We are looking for opportunities to build on this initiative.
I think that FoI is working well but it seems that it is essentially reactive. The Government are interested in complementing FoI by encouraging public authorities, where appropriate, to put more information in the public domain and therefore to be proactive.
Outsourcing was one of the themes of our debate. It remains an important component in a mixed economy of government service provision, which includes the voluntary sector. Outsourcing has been used by Governments and local authorities of all colours for decades, and systematic reviews across a number of studies between the 1970s and the 1990s show clear cost benefits of outsourcing, delivering cost savings of 20% for basic services. The Government are committed to building a healthy and diverse marketplace of companies bidding for contracts to deliver quality public services at good value for the taxpayer. As the noble Lord, Lord McNally, said, estimates are that outsourced services represent about 8% of GDP and perhaps two-fifths of public expenditure.
We remain committed to spending £1 in every £3 of that sum with small and medium-sized enterprises. Listening to the speech of the noble Lord, Lord Tunnicliffe, I am concerned that increasing the reporting burden on these small organisations, as well as some of the other measures that he mentioned at the end of his speech, risks reducing for those SMEs the attractiveness of government as a buyer and therefore might weaken the resilience of our market and reduce the value for money that government is able to deliver.
Supplier failure—again, mentioned by the noble Lord, Lord Tunnicliffe—is rare, but extending FoI to the organisations would not, I believe, help prevent it. Financial information is often commercially confidential and is therefore exempt from disclosure under the Act.
Much of the debate was about information which should be provided when a public authority enters into a contract. There is a revised FoI code of practice, which recommends that when a public authority enters into a contract, there should be agreement on what information will be held by the contractor on behalf of the public authority and that this should be indicated in an annexe or schedule to the contract. Contractors must comply with requests from a public authority for access to such information and must do so in a timely manner. For example, if a contractor holds information relating to a contract on behalf of a public authority, this information must be considered in the same way as information held by a public authority, and it is subject to the FoIA. Examples could include information that a public authority has placed in the custody of a contractor or a contract that stipulates that certain information about service delivery is held on behalf of the public authority for FoI purposes.
The noble Lord, Lord Tunnicliffe, raised a number of questions and perhaps I may write to him. He asked specifically why we were continuing to place a number of contracts with organisations in the private sector.
Housing associations—an issue raised by the noble Lord, Lord Shipley—are already required to make public a significant amount of information. They have to publish their accounts annually, including a strategic report covering issues such as the remuneration of key personnel. Of course, many housing associations have tenants on the board.
The Regulator of Social Housing, which regulates the sector, also publishes information supplied by housing associations at individual provider level, including details of their stock holdings, rent levels and evictions. The review of social housing regulation will be looking at how transparency and accountability for tenants can be further improved, including better access to landlord information. As I understand it, although this would not be a conclusive factor, housing associations are generally opposed to being included under the FoI Act.
The noble Lord mentioned Grenfell. I recognise the significant concerns in this area, particularly over information that should be available to tenants about the buildings they are living in. The review of social housing regulation, announced in the Government’s social housing Green Paper last summer, will look at how transparency and accountability for tenants can be improved. I will ensure that this review takes on board the points made by the noble Lord, Lord Shipley, about the legitimate requirements of tenants. I was struck by the parallels he drew between the rights of local authority tenants as contrasted with the rights of housing association tenants.
I turn to an issue raised by the noble Lord, Lord Scriven. I thought that his noble friend Lord Lee of Trafford raised a pertinent question about what those who are funding the body were doing. It was not clear to me how the public body—which I understand it was, namely the Yorkshire tourist board—became a private body, and who was party to that decision. Of course, I understand his concern about allegations of fraud. My understanding is that, following the allegations he referred to, Welcome to Yorkshire appointed two independent professional services businesses—the accountants BDO and the external lawyers Clarion, which the noble Lord referred to in his speech—to undertake separate investigations following the departure of the CEO, Sir Gary Verity. They investigated and recently reported on the culture, governance, procedures and management of the organisation. I am sure that the noble Lord welcomed that publication, along with Welcome to Yorkshire’s commitment to implement the recommendations in the report. I understand that more than £40,000 of expense claims have been repaid by Sir Gary. However, despite a number of exchanges, it is not the case at the moment that FoI would cover organisations of the specific nature of the current body.
There are a number of other issues that I will need to write to noble Lords about. I will conclude by saying that the Government are committed to the principles of transparency and openness across the public sector. We are proud of our global reputation as a leader on transparency. The Justice Select Committee said that freedom of information was a significant enhancement to our democracy when it carried out post-legislative scrutiny of the FoI Act. I would go further. Freedom of information is an intrinsic part of our democracy, extending to cover more than 100,000 public bodies and enabling the public to find out what has been done in their name. Those words are probably the last from Prime Minister May’s Administration from this Dispatch Box in your Lordships’ House.