Publication - FOI/EIR release

Loans or equity investments in private sector organisations: FOI release

Information request and response under the Freedom of Information (Scotland) Act 2002.

Published:
4 Apr 2019
Loans or equity investments in private sector organisations: FOI release
FOI reference: FOI/19/00208
Date received: 15 Jan 2019
Date responded: 4 Apr 2019
Information requested

 

Please provide any and all correspondence between Scottish Government Ministers and the Finance & Constitution Committee of the Scottish Parliament containing references to loans or equity investments in private sector organisations.
The period covered by my request is 1 January 2016 to 14 January 2019.
Please exclude the following: Correspondence dated 24 April 2018 and 27 June 2018 relating to loans to Ferguson Marine Engineering Limited as this information is already in the public domain.

 

Response

 

I apologise for the considerable delay in responding. This was due to a high level of conflicting demands and priorities impacting on my availability and capacity and that of key staff whose input was required to progress your request.
I can now provide our response to your request, and I enclose a copy of some of the information that you requested.
While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because an exemption under section 33(1)(b) (commercial interests) of FOISA applies to that information. The reasons why this exemption applies are explained in the Annex to this letter.

 

ANNEX
REASONS FOR NOT PROVIDING INFORMATION

An exemption applies subject to the public interest test
An exemption under section 33(1)(b) of FOISA applies to some of the information that you have requested. This exemption applies because disclosure of this particular information would, or would be likely to, prejudice substantially the commercial interests of a) the Scottish Ministers, b) the company to which the correspondence relates and c) third parties who have dealings with that company.
In relation to the Scottish Ministers’ commercial interests, disclosing the information would substantially prejudice them because disclosing the nature, type and extent of the support being provided in the particular circumstances of the transactions in question would a) give rise to an expectation that the Scottish Ministers ought to provide similar support in other transactions and b) in substantially prejudicing the commercial interests of the company in question, for the reasons set out below, in turn increase the risk to the public funds invested in it.
In relation to the company’s commercial interests, disclosing the information would substantially prejudice them because it relates to the company’s financial structure and commercial approach at a time when the company is actively participating in ongoing tender exercises. Disclosing that information would place into the public domain information about one tenderer when comparable information about other tenderers is not, and will not, be in the public domain. This would place the company at a significant disadvantage by comparison to those other tenderers, and would impact negatively on its ability to win the contracts for which it is tendering, with consequent reduced contract and employment opportunities.
In relation to the commercial interests of third parties who have dealings with that company, disclosing the information would substantially prejudice those commercial interests for the following reasons. The information withheld in relation to those third parties indicates the approaches that those third parties took in response to a company experiencing financial difficulties. Were those approaches to become public knowledge, we consider that other companies in a similar position would seek to use those approaches as precedents, and this would unduly constrain the negotiating position of those third parties. This in turn would substantially prejudice their commercial interests as it would limit their ability to negotiate the most appropriate approach in the individual facts and circumstances of each case.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open and transparent government, and to help account for the expenditure of public money. However, there is a greater public interest in ensuring that: a) the Ministers’ ability to provide support to companies in future is not restricted by expectations arising from their approach in the particular circumstances of these transaction; b) the company’s ability to tender for contracts is not not reduced because information about it is in the public domain when comparable information about its competitiors is not, thereby affecting its ability to win tenders and ensure continued employment opportunities; c) third parties are able to negotiate according to the individual facts and circumstances of each case without having examples of their previous approaches in the public domain in a way which would affect their negotiating ability; and d) overall, the public funds that have been invested are not placed at increased risk.

 

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foi-19-00208 Information requested

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Contact

Please quote the FOI reference
Central Enquiry Unit
Email: ceu@gov.scot
Phone: 0300 244 4000

The Scottish Government
St Andrews House
Regent Road
Edinburgh
EH1 3DG