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Companies to stay outside Freedom of Information regime

Out-Law News | 17 Jul 2009 | 4:42 pm | 2 min. read

Companies that carry out functions of a public nature will not have to handle Freedom of Information requests, the Ministry of Justice announced yesterday. Proposals to extend the regime to the private sector will not progress at this time.

The UK Government carried out a consultation on the extension of FOI legislation to contractors or companies which “carry out functions of a public nature” between October 2007 and February 2008. The Ministry of Justice has now published its response to that consultation.

The Confederation of British Industry (CBI) responded to the consultation, arguing that designating private sector organisations as public authorities for FOI purposes would increase their costs, and these costs would be factored into existing and future contracts – thus increasing costs to public authorities and to the public.

The CBI stated in its response that "companies would find it extremely difficult to factor in FOI requests as a fixed cost when contracting with government and could set a price per request instead. This would mean contracts may engender significant additional costs where companies receive a substantial number of FOI requests."

The point was made that information in relation to a particular contract could be requested from both the contractor and the public authority, leading to a proliferation of costs and potential litigation.

The Government said that statutory obligations in relation to accounting, reporting and business ethics help to safeguard the public interest. It concluded that "no general expansion of FOI in relation to contractors is appropriate at the present time."

"However, the Government intends to keep this matter under review, particularly in relation to prisons, detention centres and foster care homes provided by private sector contractors on behalf of public authorities," it added.

Some other organisations will be brought within the FOI regime, though. The Government said that it will consult further with these bodies.

Louise Townsend, an information law expert at Pinsent Masons, the law firm behind OUT-LAW.COM, said that companies will welcome the news.

"The list of organisations that will come within FOIA is shorter than expected," she said. "Most companies can breathe a sigh of relief."

"One of the points apparently taken into account by the Government has been what it describes as 'the change in the economic environment since the consultation closed' and the commitment to reduce red tape for business," she said. "For once, the construction industry has something to thank the credit crunch for – although in the scale of things it may not seem much to rejoice in."

"There is good news for most of those who were concerned about the potential extension – no private sector contractors are to be covered at this stage at least, nor are charities or professional or voluntary regulators."

The announcement effectively sets out four categories of organisations:

  1. Organisations that are to be covered by FOIA. They are: Academies, the Association of Chief Police Officers (ACPO), the Financial Ombudsman Service and the Universities and Colleges Admissions Service (UCAS). There will be further consultation with all of these bodies.
  2. Organisations that are not being covered at this stage but where the Government is "attracted" to the prospect of bringing them into the FOIA regime. These are utility service providers, including telecommunications service providers. There will be further consultation with these organisations.
  3. Those who are not being covered but who the Government is going to "keep under review".  These are contractors who supply major services to the public sector particularly those who provide services such as  prisons, detention centres and care homes.  They are exhorted to voluntarily publish information and adhere to the principles of FOIA. 
  4. Those who the Government has decided do not need to be included.  These include charities and  the regulator of professional and voluntary services.