Publication - FOI/EIR release

Contracts in place regarding GFG Alliance, Lochaber Guarantee and Reimbursement agreement: FOI review

Published: 21 October 2021
Directorate: Economic Development Directorate
Part of: Business, industry and innovation, Money and tax, Public sector
FOI reference: FOI/202100234677 Review of 202100226683
Date received: 30 August 2021
Date responded: 27 September 2021

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

Information requested

The response to my FOI request (202100226683) isn't satisfactory and I am requesting that you carry out an internal review. The response is incomplete and the exemptions claimed do not apply. Furthermore, the public interest test has not been properly carried out. This is a bespoke project and the claimed section 33 exemption does not apply.

Response

I have been asked to look at your request afresh, to decide whether the original response should be confirmed, with or without modifications, as appropriate, or that a fresh decision should be substituted. I can confirm that I was not involved in the handling or decision-making around the original response.

I have considered this case again, and I have conducted a comprehensive review of the response, and the reasons behind withholding the requested information. I have concluded that the original decision should be confirmed with modifications. Due to the lapse in time since the information in question was created, I have reapplied the public interest test and reassessed damage that may be caused from release of the redacted passages. I can confirm that more information can be released to you and as such I have attached new versions of the documents that fell within the scope of your request with more information made available.

Firstly, however, I would like advise that there is one contract in place between Deloitte LLP and Scottish Ministers for advisory services related to both the GFG Alliance and the Lochaber Guarantee and Reimbursement Agreement. As is evidenced in Supporting Document 3, that contract consists of: the contract award letter; the Scottish Ministers ITT; the Deloitte LLP response via PCS; the Deloitte LLP pricing Schedule 2; and the RM3745 Call Off Terms Management Consultancy Use V2 – (Framework schedule 4).

All of these documents were provided to you in the initial response with exempt content redacted. There is nothing further held by the Scottish Government that forms part of the contract.

Having reviewed this request and the information previously withheld, I have concluded that some of the information previously withheld under section 33(1)(b) (commercial prejudice) was incorrectly withheld and can now be disclosed due to the lapse in time and the diminishing effect of the commercial damage that would be caused. Having engaged with the relevant Scottish Government policy officials I am content that this information, if released, would be likely to significantly damage or weaken the commercial interests of both the Scottish Government and Deloitte LLP.

The information withheld relates to the scope of work being carried out by Deloitte in service to Scottish Ministers and also relates to the pricing of such services. Having engaged with officials from the relevant policy unit, I am satisfied that admission of the terms withheld, if made public, would be likely to substantially weaken the position of the Scottish Government when negotiating similar contractual terms when procuring services in the future and achieving best value for public money. Similarly, release would also hinder the commercial advisors in this regard and as such cause commercial damage to the company.

Scottish Ministers must be able to negotiate freely the terms of such contracts and release of this information would be advantageous to such advisers in the future in achieving higher rates of pricing at the taxpayer’s expense.

As has been widely publicised, GFG is also in active refinancing and restructuring negotiations with creditors and prospective lenders worldwide. Release of information detailing the ongoing work taking place at present, which is not in the public domain, could negatively influence this process. The refinancing and restructuring exercise being undertaken by GFG is clearly a critical process for the businesses and any influence on this could harm both GFG, and the Scottish Government as a key financial stakeholder. Any negative impact on the business arising from the release of this information could have a consequential impact on the Scottish Government given its potential financial exposure to GFG. We therefore conclude that, although there is a public interest for transparency, this exemption still applies in order to protect the Scottish Government achieving best value for money.

In withholding this information, we are mindful of the further need to apply the public interest test given exemption 33(1)(b) is subject to this test. In applying that test, we again conclude that release of this financial information is not in the public interest given it would have a negative bearing on the future costs of the Scottish Government procuring advice. It would – or would be likely to – affect our position in future relationship with commercial advisers when seeking advice required for similar projects that safeguard Scotland’s commercial interests and protect jobs. Similarly, any release of commercially prejudicial information that could negatively impact the operations of the business in Lochaber, and in so doing put that company as risk, would not be in the public interest. Particularly when the Scottish Government have a financial interest in such a project.

Regardless of whether this contract is tailored for one specific project, this does not result in the damage caused by release of the withheld information being diminished. It also does not render the statutory exemption under section 33(1)(b) of FOISA non-applicable.

Section 38(1)(b) of FOISA (personal information) is an absolute exemption and is not subject to the public interest test. As such, for review of the application of the public interest test, this would only be relevant to Section 33(1)(b) of FOISA (commercial prejudice). However, upon review of the use of section 38(1)(b) itself, I can confirm that information was incorrectly withheld from release on these grounds in the initial request. As a result I have now remedied this and removed originally redacted content that would not qualify as personal information under this exemption. However, for the information not now released, I have concluded that the original case handler was correct in applying the exemption.

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