Freedom of Information - disclosure of financial information in commercial contracts

The Information Commissioner’s Office (ICO) has ordered a local authority to disclose the financial benefits it gets from an advertising contract. In arriving to a decision, the ICO stated that the ‘commercial interests’ exemption’ in the Freedom of Information Act 2000 (FOIA) will not be engaged where information is of a significant age.

What is the FOIA?
The FOIA aims to promote transparency in government and public authority decisions by giving the public a mechanism through which to access government held information. The act gives individuals the right to ask public authorities whether they hold certain information and, if they do, the right to be given that information.

Exemptions under the FOIA
Under the act certain exemptions apply in order to protect sensitive information, these  fall into two categories: absolute and qualified. Any information which falls under the absolute exemption is protected and does not need to be released. However, if the requested information comes under a qualified exemption there is a duty to disclose it unless the elements of the public interest test, set out within the FOIA, apply in favour of the public body. Under this test the public authority must prove that, in the circumstances, the public interest in not disclosing the information outweighs the public interest in doing so.

Portsmouth City Council
In this instance, the complainant had asked the Council to disclose information about the financial benefits it had gained from bus shelters carrying advertising. The 23 year contract was with an advertising company called Clear Channel. Portsmouth City Council had refused the request, claiming that the information it had been asked to disclose would fall under the section 43 exemption.

Section 43
The section 43 exemption covers the disclosure of information which is likely to prejudice the commercial interests of a public authority. Before considering the public interest test, under section 43, the FOIA requires the public authority to prove that prejudice would be caused to their own, or a third parties, commercial interests.   Despite the contract between Portsmouth City Council and Clear Channel not being set to expire until March 2030, the Council argued that disclosure of the financial information would damage its “negotiating position” in future procurement exercises and would cause significant disadvantage to both itself and Clear Channel in the advertising market. 

ICO decision
Whilst the ICO agreed that any tendering process must be carried out on a fair platform, it did not consider the Council’s nor Clear Channel’s arguments to demonstrate a strong link between the disclosure of the financial information and a prejudice to their commercial interests that was real, actual or of substance. The financial information requested were figures collated in 2007 and therefore the ICO decided that, due to their historic nature, would be of no relevance to negotiations of a contract in 2030. Therefore the ICO decided that the section 43 exemption was not engaged as the council had failed to prove significant prejudice and thus the public interest test need not be considered. Despite this, the ICO stressed the importance of transparency and accountability in relation to lengthy third party contracts, particularly in this economic climate, leading to the presumption that if the ICO had considered the public interest balance it is likely it would have fallen in favour of disclosure.

Looking Forward
In light of this decision, public authorities looking to rely on the Section 43 exemption will need to ensure that the information in question is relevant to their current commercial activities and that they can prove a genuine and significant detriment.

If you would like to discuss any of the above, please do not hesitate to get in touch with your usual Stevens & Bolton contact or email beverley.flynn@stevens-bolton.com

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