Discussions, correspondence and due diligence - Dalzell Steelworks: FOI review

Information requested

You expressed that you were not satisfied with the reply to your original Freedom of Information (FoI) request which was allocated reference number 202200272829. The wording of this initial request is outlined below:

1. On what date (a) did officials first identify and (b) was the Minister for Business, Trade Tourism and Enterprise or his predecessor first informed of (i) the existence of the liability in relation to the facilitation of the sale of the Dalzell steelworks and (ii) that the Scottish Government may have broken state aid rules. Please provide a copy of all the documentation that accompanied these events.
2. On what date and time did the Scottish Government contact Tata Steel after identifying that it may have broken state aid rules while facilitating the sale of the Dalzell steelworks. Please provide a copy of the notification and any response received.
3. What (a) correspondence and (b) meetings has the Scottish Government had with (i) Tata Steel and (ii) Liberty House since identifying that it may have broken state aid rules while facilitating the sale of the Dalzell steelworks. Please provide a copy of the letters, minutes and all other documentation that accompanied these events.
4. Please provide details of the due diligence that the Scottish Government conducted prior to facilitating the purchase of the Dalzell steelworks by Liberty House from Tata Steel, and whether it employed any consultants or commissioned external advice. Please provide all the documents associated with this work and a breakdown of the costs.

Upon receipt of the response to this request, you subsequently submitted a review request as follows: I would like to request that the redactions are removed from the following documents, with the exception of that which falls under third party personal information:

• Document 5a (letter from Tata Steel to Colin Cook, dated 14 December 2021)
• Document 7a (letter from Colin Cook to Tata Steel, dated 23 December 2021)
• Document 8 (minutes of the meeting of 13 December 2021 between the Scottish Government and Tata Steel)
• Document 9 (email from Colin Cook to the Deputy First Minister and Cabinet Secretary for Covid Recovery and the Minister for Business, Trade, Tourism & Enterprise, dated 28 January 2022)

I believe that the release of this information is in the public interest.

In relation to question 4, I would also like to appeal the refusal of the Scottish Government to release the cost of the report undertaken by Atkins dated 22 April 2016 . I would also like the Scottish Government to confirm that this Atkins report was the only due diligence carried out.

Finally, I would like the Scottish Government to remove the redactions it has placed on the document referenced in response to my request, ‘Lanarkshire Steelworks: Soil and Groundwater Contamination Liability Assessment’, dated 22 April 2016, and in particular those relating to the Dalzell steelworks which was the focus of my FOI request. For instance, I believe that publication of all the estimates of the plausible liabilities (redacted in the Executive Summary and again on page 12 and from page 26 onwards) is in the public interest given the back-to-back deal entered into by the Scottish Government mean that it has taken on the liabilities from Tata. This information is therefore critical to understanding the exposure of the Scottish Government to any change of circumstances in relation to Liberty, the current and potential position in relation to the public finances, and the significance of Tata disputing the Scottish Government’s conclusion as set out in document 5a.

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 not be upheld, and new decision substituted as follows:

You have requested that redactions in documents 5a ,7a, 8 and 9 be removed as this information is in the public interest.

• I have reviewed the information withheld from these documents. In the original response an exemption under Section 33(1)(b) (Commercial Interests) was applied to some of the information that you requested; however, I am of the opinion that section 30(c) (substantial prejudice to the effective conduct of public affairs) is the more appropriate exemption.
• These matters concern information about ongoing trading companies operating in a highly competitive market. I concluded that, although there is a public interest for transparency, this exemption applies to protect the Scottish Government achieving best value for money .Release of the information may prejudice the Scottish Government’s ability to arrive at a beneficial outcome and hinder the effective conduct of public affairs.
• As, exemption 30(c) is subject to the “public interest test” I have taken into account all the circumstances of this case, I have considered whether the public interest in disclosing the information outweighs the public interest in applying the exemption.
• I have found that, on balance, the public interest lies in favour of upholding the exemption. I recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate, however, topics discussed were at a preliminary stage of consideration when private space to discuss these was essential to facilitate a positive outcome.
• In the original response some of the information within document 8 was withheld due to being exempt under 36(1) Legal Advice (confidentiality in legal proceedings). I have concluded that this exemption was applied correctly. Some of the information requested is legal advice and disclosure would breach legal professional privilege.
• This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, I have considered whether the public interest in disclosing the information outweighs the public interest in applying the exemption.
• I have found that, on balance, the public interest lies in favour of upholding the exemption. Once again, I recognise that there is some public interest in release as part of open and transparent government, and to inform public debate. However, this is outweighed by the strong public interest in maintaining the right to confidentiality of communications between legal advisers and clients, to ensure that Ministers and officials are able to receive legal advice in confidence, like any other public or private organisation.
• In the original response some of the information was withheld as it was exempt under section 28(1) relations with the United Kingdom. I have concluded that this exemption has been applied correctly.
• Some of the information if disclosed would, or would be likely to, prejudice substantially relations between administrations in the UK (e.g.,between Westminster and Holyrood).
• This exemption is also subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, I have considered whether the public interest in disclosing the information outweighs the public interest in applying the exemption. I have found that, on balance, the public interest lies in favour of upholding the exemption.

You requested “I would also like to appeal the refusal of the Scottish Government to release the cost of the report undertaken by Atkins dated 22 April 2016”

• I agree that the cost of the report undertaken by Atkins dated 22 April 2016 should be released. I am advised the expected cost was £25,000 plus VAT and there is no record of the cost having increased.

You requested “I would also like the Scottish Government to confirm that this Atkins report was the only due diligence carried out.

• A separate FOI (FOI 2023003375040) has been raised in relation to your additional request around due diligence and a response will be issued shortly.

You requested the removal of the redactions the and the release of the cost of the report undertaken by Atkins dated 22 April 2016

• The Lanarkshire Steelworks: Soil and Groundwater Contamination Liability Assessment’, report undertaken by Atkins dated 22 April 2016 was subject to a previous FOI (202100204021) and a subsequent review (202100216003) where further information was released.
• In the response of FOI 202200272829 an exemption under Section 33(1)(b) (Commercial Interests) was applied to some of the information that you requested. I am of the opinion, however, that an exemption under section 30(c) (substantial prejudice to the effective conduct of public affairs) is the more appropriate exemption.
• I concluded that, although there is a public interest for transparency, this exemption applies as to protect the Scottish Government achieving best value for money. Release of the information may prejudice the Scottish Government’s ability to arrive at a beneficial outcome and hinder the effective conduct of public affairs.
• I have taken into account all the circumstances of this case and I have considered whether the public interest in disclosing the information outweighs the public interest in applying the exemption. I have found that, on balance, the public interest lies in favour of upholding the exemption.
• I recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate, however, Scottish Ministers must be able to negotiate freely the commercial terms of agreements and release of this information may give competitors commercial insight.

We regret all cases where responses to FOI requests do not issue within the 20 working day statutory deadline. High caseloads are being experienced across the Scottish Government with DED in particular being affected, and we continue to work to respond to the high volume of requests being received within the required time framework.

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