B: Contractors who build and/or maintain schools
1. Organisations considered for coverage
1.1 The draft Order at Annex A provides a 'class' based description, that brings all contractors (existing and future) within the scope of the Act, if the relevant contracts are of a term greater than 10 years and of a total value of £20 million or more.
1.2 Coverage would be of the body which has a direct contractual relationship with the public authority (in the case of PFI contracts, this would be with the 'Special Purpose Vehicle'). The duty to comply with the Act would therefore lie with the principal contractor who would need to liaise as necessary with its sub-contractors in handling requests for information. Whilst operations such as construction and facilities management are usually sub-contracted, the sub-contractors will be holding information on behalf of the main contractor and so the right to request information will extend beyond the information held immediately by the principal contractor.
1.2 It would clearly be disproportionate to seek to cover all contractors who build or provide maintenance of schools, many of which provide services through contracts which are short term and of low value. By setting a threshold which covers only contracts over 10 years and £20m we believe that this would bring only substantial contractors under the Act. Neither do we think that it would be feasible for each contractor to be individually assessed for its appropriateness for coverage. The 'class' based description in the draft Order (annex A) circumvents the need to list each contractor and avoids coverage becoming rapidly out of date.
1.3 In accordance with section 7(3) of the Act the proposed coverage is limited to the information that the contractors hold in respect of the public functions they are delivering under contract to a public authority - namely the building and/or maintenance of a school under contract to a public authority. It does not extend to information held about any other functions or operations. Coverage would be limited to the lifespan of the contract itself. Thereafter, under the proposed Public Records Bill, where records are to be retained for the long-term the commissioning public authority would assume responsibility for this. The records would therefore remain accessible under the Freedom of Information (Scotland) Act 2002.
1.4 We have asked all local authorities to provide information about the contracts they have in place for the building/maintenance of their schools. From the information provided we have compiled a list of those contractors that appear to meet the criteria in the draft Order; these are included in Annex C. Mindful that this list may not be exhaustive, we will additionally consult with representative business organisations.
2. The case for extending coverage
2.1 The building and maintenance of schools requires the expenditure of large sums of public money. Since 1999, more than 580 schools have been built or substantially refurbished, including more than 250 through PFI projects. Capital investment (except through PFI contracts) is approximately £400 million a year, and local authorities annually spend in the region of £70-£80 million on routine maintenance. By the end of 2009, some 37 PFI or NPD projects were 'done deals' with a capital value of £3,295.5 million.
2.2 The provision of schools, including their construction and maintenance, is a function of local education authorities under section 17 of the Education (Scotland) Act 1980. In building and maintaining school buildings, contractors are carrying out part of this function on behalf of the public authority.
2.3 Most public authorities have large contracts in place for the building, refurbishment, or modernisation and maintenance of a number of schools. These are frequently long-term contracts (25-30 years) and of a high value, with annual charges paid by the local authority to the contractor of £millions. Most have used the private finance model ( PFI), a form of 'public private partnership' where the private sector builds and maintains a facility such as a school, and the public authority meets the costs over a long, typically 25 year timescale. More recently a Non Profit Distributing Organisation ( NPDO) model has instead been used in Scotland. In both PFI and NPDO models the contractor is usually responsible for the design, build, maintenance and operation of the school buildings. At the end of the contract term, ownership of the building reverts to the local authority.
Would coverage enhance transparency and accountability?
2.4 Clearly, where the long term operation of schools is delivered directly by a public authority there is a corresponding right of access to information about them from the relevant local authority which will be covered by FOISA. That access right does not exist where a private contractor delivers the same service.
2.5 More recent PFI contracts include provisions for the contractor and authority to cooperate when the authority receives a request for information, for example requiring the contractor to locate information within a particular timescale and to provide views on whether it is disclosable. Older contracts, and those outwith PFI, do not tend to include these conditions.
2.6 Directly covering the contractors themselves would therefore ensure a uniform right to access information, regardless of whether the service is delivered by the public or private sector, or the type of contract in place.
Would coverage be measured and proportionate?
2.7 These contractors deliver services of major public benefit. They are responsible for the stewardship of significant public money, and in the case of PFI or equivalent contracts, they maintain public assets for a significant period of time. Furthermore, we believe that increased openness is an accepted part of doing business with the public sector, and ensures there is parity with services delivered through the public sector.
3.1 In principle, we favour extending the public's right to know to this part of the private sector which delivers key public services. The operation and maintenance of schools is an important public service, and one for which there should be a corresponding right to obtain information.
3.2 The Scottish Government is aware though of the private sector's concerns about the possible financial, administrative, and competitive implications of being subject to FOISA. The Business and Regulatory Impact Assessment looks at this in more detail and draws some initial conclusions about any additional burden. We are particularly mindful of the importance of establishing whether coverage would place undue financial pressures upon bodies at a time of economic difficulties. Responses to this consultation will therefore provide key evidence for concluding whether extending the coverage and creating additional regulatory or financial requirements would be appropriate and proportionate. A final conclusion will not be reached by Scottish Ministers until the consultation has concluded.
We invite comments on any of the points made above, and also on the Business and Regulatory Impact Assessment at Annex B which discusses the possible impact on extending coverage to the bodies concerned.
In particular we invite you to consider the following:
- Are there any factual inaccuracies in our analysis?
- Is there a case either for or against extending coverage to contractors that build and maintain schools that you wish to make?
- Are you able to provide any evidence to support your arguments?
- Do you believe different thresholds for coverage (such as a different contract value and/or duration) should be set?
- Are there any other comments you wish to make, particularly on the partial Business and Regulatory Impact Assessment at Annex B?