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Public Accounts Committee: FOI Act should be extended to private companies providing public services

The House of Commons’ Public Accounts Committee has called on the Government to extend the Freedom of Information Act to public companies providing public services. In a report examining the lessons from the private finance initiative and other projects, the Committee states:

Taxpayers could get a much better deal from PFI, as demonstrated by the buoyant and profitable market in PFI deals. The taxpayer’s position is made worse by poor transparency of investor and contract information alongside patchy public sector commercial skills. We suspect that initial investors are able to make excessive profits from selling PFI shares, yet we lack the information to know for sure. Freedom of information provisions do not currently apply to private providers of public services though investors told us they are willing to make more detailed information available. We believe there is a strong case for sharing these gains with the Government. We look to the Treasury and departments to make full use of existing contractual rights of access and further investor information to increase transparency and find ways for taxpayers to get a share of these gains.

…Public scrutiny of investor returns has been inhibited by the absence of an obligation on investors to disclose full details of their profits and gains on PFI deals. The Treasury cited commercial sensitivities for not allowing freedom of information provisions to apply to the private sector. While aspects of some deals may be commercially sensitive, it has been all too easy for departments and investors to hide behind commercial confidentiality, rather than provide full disclosure of costs and benefits to inform value for money. These are publically funded investments and should be subject to public scrutiny.

The Committee recommends:

Transparency on the full costs and benefits of PFI projects to both the public and private sectors has been obscured by departments and investors hiding behind commercial confidentiality. The Treasury cited commercial sensitivities for not allowing freedom of information provisions to apply to the private sector. Once contracts have been let, commercial confidentiality should not restrict the ability of the public, Parliament and decision makers to access information. Freedom of information should be extended to private companies providing public services. The Treasury should define commercial confidentiality and the exceptional circumstances where it applies.

Lessons learnt from PFI and other projects HC 1201, 1 September 2011

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