C: Contractors who build and maintain hospitals
1. Organisations considered for coverage
1.1 As with schools contractors, it would clearly be disproportionate to seek to cover all contractors who build or provide maintenance of hospitals. Many of them provide services through contracts which are of short duration and of low value.
1.2 The draft Order at Annex A provides a 'class' based description, that brings all contractors who are building and maintaining hospitals in Scotland (existing and future) within the scope of the Act, if the relevant contracts are of a term greater than 10 years and of a value greater than £20m. In our view these thresholds will ensure that only contractors delivering major projects will be covered. Use of a class description, rather than listing individual contractors, will ensure that coverage does not rapidly become out of date.
1.3 Coverage would be extended to a 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.
1.4 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 hospital under contract to a public authority (in this case, Health Boards). It does not extend to information held about any other functions or operations. Coverage would not apply beyond the expiry of the contract. 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.
1.5 We have asked health boards in Scotland to provide information about the contracts they have in place for the building and maintenance of hospitals. This consultation will be sent to all identified contractors who we understand are delivering contracts above the thresholds described above. We will additionally consult with representative business organisations.
2. The case for extending coverage
2.1 The building and maintenance of hospitals requires the expenditure of large sums of public money. Many new hospitals have been delivered by means of private finance initiatives ( PFI contracts), or more recently Non Profit Distribution Organisations ( NPDOs). By the end of 2009, some 37 PFI or NPD hospital projects were 'done deals' with a capital value of £1,263.9million. These particular contracts are very long-term (25-30 years) and of a high value. The contractor is responsible for the design, build, maintenance and operation of the hospital. At the end of the contract term, ownership of the asset reverts to the health board.
2.2 It is a function of health boards under the National Health Services (Scotland) Act 1978 to provide hospital accommodation. The building of a hospital forms part of the statutory function of providing that accommodation, and so contractors delivering that function can be covered by the Act by an Order under section 5(2)(b) of the Act.
Would coverage enhance transparency and accountability?
2.3 Where the long term maintenance of a hospital is delivered directly by a health board there is a corresponding right of access to information about them from the health board itself, which is covered by the Act. That access right does not exist where a private contractor delivers the same service.
2.4 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 provide views on whether it is disclosable. Older contracts, and those outwith PFI do not tend to include these conditions, although generally under all such contracts there are stringent reporting requirements which mean that the health board will have, or can obtain, detailed information. Directly covering the contractors themselves would though ensure a uniform right to access information, regardless of the means by which a hospital is being delivered.
Would coverage be measured and proportionate?
2.5 These contractors deliver services of major public benefit. They are responsible for the stewardship of significant public money, and where assets are owned and managed for a significant period of time (as with PFI contracts) they maintain public assets.
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. This would ensure a uniform right of access to information about all hospitals.
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 contracts who build and maintain hospitals 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 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?