Annex B Partial Business and Regulatory Impact Assessment
This partial Assessment accompanies the public consultation on the proposal to extend coverage of the Freedom of Information (Scotland) Act 2002. We welcome any comments on or contributions to the analysis it contains.
1. TITLE OF PROPOSAL:
1.1 Extension of coverage of the Freedom of Information (Scotland) Act 2002 ('the Act') to the following bodies:
- Contractors who run privately managed prisons and provide prisoner escort services
- Contractors who build and/or maintain schools
- Contractors who build and/or maintain hospitals
- Leisure, sport and cultural trusts and bodies used by local authorities
- Glasgow Housing Association
- The Association of Chief Police Officers in Scotland (' ACPOS')
- Contractors who build, manage and maintain trunk roads
2. PURPOSE AND INTENDED EFFECT
2.1 To consider whether certain bodies which deliver public services should be made subject to the requirements of the Act. The public's right to access information about public services currently extends only to that held by Scottish public authorities. An extension of coverage would therefore provide consistent rights of access, regardless of whether the service provider is public or not. This partial Business and Regulatory Impact Assessment accompanies a formal consultation with the bodies (or their representative bodies) listed at 1.1 above, together with other stakeholders, which will help determine whether extension of coverage is appropriate.
2.2 Outwith Scotland, most equivalent legislation in Europe already applies to private bodies performing public functions. The proposal which this Assessment examines is therefore consistent with the international picture. The UKFOI Act contains similar provisions to the Act in allowing the UK Government to extend coverage to private bodies, although this power has not yet been used.
2.3 The Act provides a statutory right of access to information held by Scottish public authorities. Under section 5 of the Act, coverage can be extended by Order to bodies which appear to Scottish Ministers to be exercising functions of a public nature and to contractors who provide services that are a function of a public authority. Before making any such Order the Scottish Government must consult with the proposed bodies themselves or their representative bodies. The Order making power has not yet been used to extend coverage, however it is clear that the intention of including such a provision in the Act was to ensure that outsourced public functions could be brought within its scope.
2.4 The bodies listed in 1.1 were selected following consideration of responses received to a Discussion Paper 13 which explored the legal and policy issues raised by extension of coverage. These bodies are responsible for stewardship of significant public funds and assets, and deliver services of major public benefit.
2.5 The Scottish Government is aware however that any extension of coverage will place an additional regulatory and financial burden on the bodies concerned. We are particularly mindful of the importance of establishing whether coverage would place undue financial burdens upon bodies at a time of economic difficulties. Creating additional regulatory or financial requirements must be appropriate and proportionate. This Assessment outlines (so far as possible at the pre-consultation phase) the likely costs and benefits of the proposal. Responses to the formal consultation will provide key evidence for whether extension of coverage is appropriate and proportionate. A final conclusion will not therefore be reached until the consultation has concluded.
Rationale for government intervention
2.6 The Scottish Government is concerned that the provision of public services by private bodies which aren't subject to the requirements of the Act may limit the public's right of access to information about those services. It is a key 'national outcome' within the Government's performance framework that Scotland's public services are high quality, continually improving, efficient and responsive to local people's needs. The rights afforded by Freedom of Information can play a key part in achieving this goal, by allowing people to hold their public services fully to account, and in aiding increased transparency of operations.
2.7 Therefore the Government is sympathetic to the view that access to information should 'follow' the expenditure of public money. Enabling the public to make information requests directly to the bodies themselves would address any difficulties the public may have in obtaining information which may result from outsourcing of public functions. It would also facilitate more consistent disclosure of information about, for example, how a public service is being delivered.
3.1 This is a cross cutting issue and officials from across Government have contributed to the consideration of whether to extend coverage. Their factual input, combined with the views of stakeholders (see 3.2 below), provided evidence for the Scottish Government to take an initial view about considering the extension of coverage to the bodies in 1.1 above.
3.2 The initial views of stakeholders were sought through a Discussion Paper published in November 2008 which set out in detail the issues that must be addressed when considering any extension of coverage. 63 responses were received, with most respondents supporting the principle of greater openness and transparency, but with no clear consensus on how this should be delivered. In particular, the majority of contractors and registered social landlords expressed strong opposition to being covered. The responses did not provide clear evidence that there was difficulty in obtaining information from these bodies. 14
3.3 A formal consultation process is now underway with the particular bodies listed in 1.1 above. In respect of each category of body proposed to be covered, the consultation paper sets out the basis for extending coverage and examines the appropriateness of coverage - for example considering the work of a public nature they carry out, the extent of public funding received, whether extension would enhance transparency and accountability, and whether coverage would be measured and proportionate. The bodies (or their representative bodies) are then invited to respond to the points made and to provide evidence of any additional burdens or risks to business efficiency or competitiveness.
3.4 The consultation will close on 02 November 2010 after which time the responses received and evidence provided will be considered in detail before the Government's conclusions are reached. A full Business and Regulatory Impact Assessment will be developed at this time.
3.5 Throughout the consultation period, the Scottish Government will meet directly with a range of bodies affected by the proposed section 5 Order, so we can better assess the costs and/or benefits to their businesses. Up to 10 will be selected which best represent the cross section of types of bodies - for example private finance contractors from the health and education sectors, private prisons, and local authority trusts.
4.1 This section gives consideration to the impact, in terms of costs and benefits, of the various options available. Given the early stage of the consultation process, it is limited however by the evidence base presently held. Following the consultation process a more detailed assessment can be undertaken.
Option 1: Take no action
4.2 This would mean making no section 5 Order under the Act to extend coverage to beyond the public sector. The status quo would remain, where information can only be obtained under the Act from Scottish public authorities and their wholly owned companies.
4.3 Sectors and groups affected: There would be no impact on the private sector or public authorities, however the public's rights to access to information would continue to be limited to solely public authorities.
4.4 Costs and benefits: This option presents no added costs to the Scottish administration, to public authorities, or to private organisations. However this would not redress the loss of rights to access information (perceived or actual) where public functions are no longer provided by public bodies.
Option 2: Improved self-regulation
4.5 This option would seek to encourage increased transparency on a voluntary basis, instead of bringing additional bodies within the scope of the Act. For example a non-statutory Code of Practice might set out best practice for contractors etc delivering 'public' projects, recommending proactive publication of information and responding to requests for information. Without any power to enforce that Code however it is arguable that this would be ineffective in improving access to information.
4.6 Sectors and groups affected: This option would require work by the relevant sectors themselves in developing standards and implementing them. Depending on any resulting improvements in transparency, it may impact positively on the public's ability to access information, but we believe this to be unlikely.
4.7 Costs and benefits: There would be staff costs involved in establishing guidance or a voluntary code of practice, however the benefits may be limited as it would not be enforceable and so there may be wide variations in improvements to access to information.
Option 3: Improved statutory guidance
4.8 Under section 60 of the Act a statutory Code of Practice provides guidance to public authorities about their duties under the Act. A revised version of the Code 15 (which is presently under development) promotes maximum transparency with regards to any contracts which authorities enter into. In particular it recommends the inclusion of disclosure provisions within contracts, the early identification of sensitive information, and the proactive publication of information where possible. More generally, the Code encourages authorities to act in both the spirit and letter of the law.
4.9 The Scottish Information Commissioner promotes observance of the requirements in the section 60 Code of Practice. Authorities are expected to adhere to the Code unless they have good reasons for not doing so, which can be justified to the Commissioner. The Code however only applies to public authorities, as defined under the Act. It is arguably therefore not a substitute for extending coverage to the bodies proposed.
4.10 Additionally, the Government is exploring how the Housing (Scotland) Bill can promote maximum transparency of the social landlord sector. As part of the Bill it is intended to introduce a Scottish Social Housing Charter, which will set the outcomes that social landlords (both registered social landlords and local authority landlords) should be delivering consistently for all tenants. One of the areas for which an outcome could be set is around social landlords providing access to information about their work. The aim of this could be to ensure that all social landlords act in an open and transparent manner. .
4.11 Sectors and groups affected: This option impacts directly on public authorities already subject to the Act. There may also be an indirect impact on the private bodies with which they have contracts in place for the delivery of public services. The social landlord sector may be affected should the Charter described in 4.10 above include reference to access to information. More generally, the public's rights to access information could be improved to a degree.
4.12 Costs and benefits: This option may present limited costs to public authorities seeking to comply with the section 60 Code's recommendations if they presently fall short of the best practice it sets out; for example in ensuring that contract conditions include disclosure clauses. The benefits of compliance with the Code will include increased openness and transparency, for example, increasing the availability of contractual information about outsourced public functions. The Code does not apply to private bodies, but impacts to a limited extent on them in respect of public authorities' management of information about, for example, contracts they have in place.
Option 4: Making one or a series of section 5 Orders
4.13 The proposal directly affects the bodies listed in 1.1 above who must comply with the Act, and also the Scottish Information Commissioner whose promotion and enforcement role would extend to cover these additional bodies. The benefits of the proposal extend to the wider public (within and outwith Scotland), whose rights to access information will be enhanced.
4.14 This preferred option would extend coverage of the Act to the bodies perhaps incrementally, in respect of the information they hold concerning their 'public' functions. It would therefore provide a right of access to information held about these outsourced public functions, and achieve parity with the statutory right to access information from Scottish public authorities.
4.15 The risks, including costs, associated with this option will be more clearly established following the consultation process. It is likely though that the costs will remain difficult to accurately quantify. In general there will be additional administrative costs for the private bodies which may be passed directly or indirectly onto the public sector, as described below:
- The bodies made subject to the Act would have to put in place systems to handle information requests, train staff on the requirements of the Act and the Environmental Information (Scotland) Regulations (' EIRs'), develop and maintain publication schemes as required by the Act, consult with third parties (including obtaining legal advice where necessary), establish and maintain adequate records systems and distinguish between information that is subject to the Act and not.
- Where bodies are covered only in respect of certain of their functions, when handling requests there may be additional costs in determining whether requests are valid (ie whether they seek information relating to delivery of a public function), and in separating and locating information covered by the Act and the EIRs.
- The Scottish Information Commissioner may require additional resources to promote and enforce compliance with the Act by a greater number of bodies.
4.16 There are also risks involved:
- There may be hidden costs to the public purse if an extension of coverage to contractors deters bidders from competing for public contracts and thus hinders competition, ultimately affecting the quality and cost of goods and services provided. Equally, there is also some concern in respect of GHA that designation for the purpose of the Act as a public authority might impact on its ability to raise private finance.
- The bodies proposed for coverage may seek to recoup any additional costs from the public purse through their public sector partners. For example, in future contracts, the bodies may seek to recoup FOI costs at a fixed cost or set a price per request. As regards existing, perhaps long term (25 years plus) contracts, there may be limited opportunity to re-price for any increased costs - undermining the bargain reached at the time of contract award. Again, with regard to GHA, there is concern about how costs of coverage might be recouped.
- The uncertainty around the scale and number of requests may undermine investor and shareholder confidence. The release of the information under FOI may not always be compatible with shareholders' best interests, for example.
4.17 There are though some general factors mitigating the possible costs and risks involved in proceeding with this option:
- The Act has now been in force for over 5 years and it is commonly accepted that increased transparency is a key part of working in and with the public sector.
- Many of the bodies proposed for coverage already operate within the scope of the Act to some degree. For example they cooperate with the relevant public authority who receives requests in locating and providing information, or considering exemptions. Some are operating fully in the spirit of the Act
- A considerable body of guidance is now available for bodies subject to the Act. Additionally, both the Scottish Information Commissioner and the Scottish Government would support bodies in preparing for meeting the requirements of the Act.
- Good records management is key to effective request handling and as an essential business practice it is not a new requirement for the bodies.
- Proactive publication of information that is likely to be of public interest can help reduce the volume of requests received. Those bodies that make more information available up front are likely to receive fewer requests.
- Coverage by the Act would enable these bodies to manage information requests themselves, and judge what, if any, exemptions would be applicable (rather than a third party, e.g. a contracting authority).
- It is estimated that there will be a small number of requests made to the bodies, based on comparison with the numbers of request received by comparable bodies.
- There may be a diminution in the number of requests made to the public sector about the delivery of these functions, leading to some costs savings to the public purse.
- The proposed section 5 Order would not come into force until 12 months after being laid before the Scottish Parliament, allowing significant preparation time.
Option 4 Cost estimates
4.18 The costs of implementing the Act for the bodies concerned are difficult to quantify. We set out below some key factors:
(a) The numbers of requests received per year.
4.19 It is not possible to predict with certainty the number or scope of requests that a body will receive, however the estimates below are based on the evidence available so far. During the first year of coverage it is likely that bodies will incur higher costs as the bodies adapt to comply with the requirements of the legislation. They may also receive larger numbers of requests than the estimates below, as requesters make use of their new rights for the first time. The figures below suggest that in the long term request handling will not have significant cost implications for most of the bodies proposed to be covered.
In 2009 the Scottish Prison Service received 261 requests, and each prison received up to 40 requests.
Are already operating within the spirit of the Act and receive around 5 requests a year.
Glasgow Housing Association
Are already operating within the spirit of the Act, and in the last 3 years have handled 12-18 requests a year.
Local authorities which have to date provided figures on the numbers of requests they receive indicate that they are minimal, ranging from just 1 or 2 per year to 12.
Health Boards which have to date provided figures on the numbers of requests they receive in relation to hospital contracts indicate that they are minimal, ranging from just 2 to 15 per year.
Transport Scotland advise that they have received 11 requests in 2 years relevant to the three Trunk Road contracts.
Local authority bodies and trusts
Local authorities advise that requests received in relation to the bodies or the services provided by them are minimal, sometimes just 1 or 2 per year.
(b) The costs of establishing FOI procedures.
4.18 Some of the bodies proposed for coverage are already operating in the spirit of the Act by responding to requests and making information available proactively, and in those cases the additional costs will be limited. Other bodies will be familiar with the FOI process through assisting public authorities with request handling in locating and considering information for release. ACPOS for example provide a central coordinating process for some requests received by police forces, and in 2009 provided strategic guidance on 419 cases. It is though probably fair to say at least in relation to the contractor groupings, that the bodies may be unfamiliar with the detail of the legislation; unused to engaging with the public in an open and transparent manner and answering their requests for information. It is not therefore possible to draw hard and fast rules about the extent to which a body will have to devote resources to implement FOI, given their different starting positions.
4.19 Research carried out in 2007 16 sought information from 53 public authorities on staffing resources required to implement FOI. Just over half of respondents had absorbed FOI work into their existing staff resource. Of the remainder, half added 1 new staff member, and the 9 remaining authorities invested between 2 and 5+ more staff. The majority (91%) ran training programmes for staff. 85% either introduced new information systems or adapted existing systems, mainly to manage FOI requests.
4.20 One of the bodies proposed for coverage, ACPOS, anticipates an initial surge of requests for information not actually held by them. Depending on the amount of requests it may employ a permanent FOI Decision Maker alongside a temporary Records Manager and admin support. Additional costs are anticipated in the need to acquire a new content management system adequate to support a Publication Scheme. GHA are also of the opinion that coverage would significantly increase the amount of requests received - perhaps even by a factor of 10.
4.21 We would therefore anticipate there to be costs in bodies providing training for their staff, and in ensuring there are proper systems in place, and in developing Publication Schemes as required by the Act.
(c) The average resources required to handle a FOI request.
4.22 There has been limited research undertaken in the UK into the costs of handling FOI requests to the authorities subject to the Act.
4.23 The Scottish Government conducted initial internal research during late 2009. While analysis along with further research is ongoing, provisional assessment of data suggests that the average time spent in responding to a request was approximately 7.25 hours, at an average cost in staff time in the region of £200.
4.24 The UK Government commissioned research in 2006 17 to examine the costs of delivering FOI across central government and the wider public sector. It also concluded that the average request handled by central government took 7.5 hours, at an average cost of £254.
4.25 Sectors and groups affected
This option would of course impact on the range of the bodies proposed for coverage. It would also affect the Scottish Information Commissioner, whose oversight and enforcement duties would extend to these additional bodies. Importantly, it would also impact on the public, whose information rights would be extended.
5. SCOTTISH FIRMS IMPACT TEST
5.1 This section will be informed by the evidence gathered during the consultation phase, and completed in the final BRIA. In addition to the written consultation process, we will meet directly with a number of businesses (up to 10) affected by the proposal, from across the range of sectors. Recent changes to the BRIA process mean it has not been possible to carry out these meetings before publishing the consultation paper. Additionally, incorporating these meetings into the consultation timetable will allow stakeholders to first consider our proposal in more detail and examine the issues raised, which we believe will inform more productive meetings, an approach agreed by the Minister for Parliamentary Business.
5.2 The business sector have expressed concern that extending coverage to contractors delivering particular functions may have an impact on their ability or willingness to competitively tender. We welcome further views and evidence on this issue from all interested stakeholders. If sufficient evidence is provided during the consultation process this will enable a full assessment to be made, which will inform Ministers' final decision on whether to proceed.
5.3 However, we would suggest that on the basis of the evidence collated to date in real terms the impact on resources would be minimal. Similarly, contractors' fears that they may be forced to publish commercially sensitive information which may harm their business must be balanced against the provisions in the Act which exempt such information from being released. Works for the public sector are a vital part of the private sector's operations, and we would not expect coverage to either deter public authorities from outsourcing this work, or private bodies (whether based in Scotland or elsewhere) from bidding for this work.
5.4 The Office of Fair Trading have confirmed that, from their perspective, there are no particular competition issues to be considered at this stage.
Test run of business forms
5.5 There are no new business forms required.
6. LEGAL AID IMPACT TEST
6.1 The Scottish Legal Aid Board confirms that there is likely to be minimal impact on legal aid issues as a consequence of these proposals.
7. ENFORCEMENT, SANCTIONS AND MONITORING
7.1 Option 1 (do nothing) presents no enforcement or monitoring issues. The current enforcement regime (provided by the Scottish Information Commissioner) would remain the same, with no additional bodies brought within its scope.
7.2 Option 2 (increased self-regulation) would not be enforceable. As it would be a matter for individual bodies to improve their practice it would not be practical to centrally monitor any resulting changes.
7.3 Under Option 3 (improved statutory guidance), the Scottish Information Commissioner would promote observance of the statutory Code of Practice by public authorities. Whilst it does not apply to the private sector, the Code does recommend that authorities improve the transparency of the contracts they have in place.
7.4 Extending coverage of the Act to the proposed bodies (option 4) would require them to comply with the terms of the Act and with the EIRs. Compliance with the Act and EIRs is monitored and enforced by the Scottish Information Commissioner. 18 The Commissioner can receive appeals from any person who has gone through the request and review stages of the legislation and is dissatisfied with the response from a public authority. He can also investigate a public authority if he believes that it may be failing to comply with the terms of the legislation or the Codes of Practice issued under the legislation.
7.5 At the conclusion of an investigation (if settlement is not reached) the Commissioner will issue a decision notice which sets out his conclusions. Compliance may require the release, by the authority, of the information sought by the applicant.
7.6 During the course of an investigation (or when determining whether an authority has failed to comply with any part of the legislation), the Commissioner may give the authority an information notice. This notice requires the authority to give him information he needs to conduct the investigation.
7.7 If the Commissioner is satisfied that an authority has failed to comply with the legislation, he may give the authority an enforcement notice which details the steps which must be taken to comply with the legislation and a time limit for doing so.
7.8 Failure to comply with any of the notices detailed above may be treated by the Court of Session as a contempt of court, the penalty for which may be a fine or imprisonment. The authority may appeal, on a point of law, to the Court of Session against a decision by the Commissioner in relation to a decision notice or the giving of an enforcement or information notice. An applicant can appeal to the Court of Session against a decision by the Commissioner.
7.9 Following the grant of a warrant from a Sheriff Court, the Commissioner and his staff are entitled to enter and search premises, inspect and seize any documents which may constitute evidence and, inspect, examine, operate and test any equipment in which information may be recorded.
Statement by the Minister for Parliamentary Business
I am satisfied that business impact will be assessed with the support of businesses in Scotland.