In this article, our Regulatory Risk and Compliance team (RRC team) discusses the increasing need for firms dealing with government to be alert to the impact of transparency and fair-dealing regulations and how changes in these rules pose risks and may also give rise to opportunities.
This is an evolving area and the RRC team will provide updates to reflect key developments.
The Freedom of Information Reform (Scotland) Bill
A draft proposal for a bill to reform Freedom of Information legislation in Scotland with the aim of increasing transparency in the public sector could substantially extend existing freedom of information rights.
The Freedom of Information (Scotland) Act 2002, which came into force on 1 January 2005, requires public authorities in Scotland to provide recorded information they hold to a requester unless a statutory exemption applies. In this way, the regime has over its lifetime afforded a level of transparency in the public sector.
More recently, concerns have been expressed around whether the regime in its existing form is “fit” for purpose in the modern age. There is a particular concern that the scope of the Act does not adequately cover private sector businesses that deliver public sector services.
The draft proposal was lodged on 1 November 2022 and proposes to extend coverage to all bodies delivering public services, services of a public nature and publicly funded services. A consultation on the draft proposal closed on 14 March 2023. It is anticipated that a final proposal will be made once consultation responses have been analysed and published.
In effect, the draft proposal attempts to bring additional third sector bodies and private businesses within the scope of the existing freedom of information legislation, if they carry out work for the public sector or receive public funds. The consultation also sought views on what information should be published proactively by Government and public services.
Subsidy Control Act 2022
The UK’s new Subsidy Control Act came into force on 4 January 2023. The new rules apply to subsidies granted by public authorities on or after this date and largely replace the EU state aid regime which (for the most part) no longer applies in the UK.
A particularly notable feature of the Act is that it requires public authorities to publish information about any subsidy it awards or subsidy scheme it creates. Any awarded subsidy that has a value of over £100,000 must be entered into the subsidy transparency database, within three months of the award. The information which must be published includes: name of awarding public authority, the form of subsidy e.g. subsidised loan, grant, etc., and the policy objectives and purpose of the subsidy.
On the other hand, the transparency reporting requirement may provide a useful platform to assist interested parties contemplating a challenge to the granting of a subsidy to the Competition Appeal Tribunal.
Procurement Bill
A new Procurement Bill has been proposed and is progressing through UK Parliament, with the aim of embedding greater transparency. Whilst there is already a degree of transparency around public procurement in the UK, the Bill seeks to expand the types of information that is reported on, and improve the usability of this data through a single platform which can be accessed publicly. The proposals include the introduction of a number of new procurement “notices” covering the procurement lifecycle from planning to contract expiry, and the provision of a registration service for suppliers.
The reforms propose a number of benefits for both contracting authorities and suppliers. For contracting authorities, the reforms will enable access to a more diverse range of suppliers through greater visibility of procurement plans and tender opportunities. For suppliers, the reforms will ensure better visibility of procurement plans, engagement events and tender opportunities will increase the number of opportunities to bid on.
More broadly, the reforms propose a number of additional benefits, including lower prices through better disclosure, improved accountability in spending, reduced scope for corruption, and time savings.
We welcome feedback on these topics and would be happy to have a dialogue with interested parties. For a discussion or more information please contact Gordon Downie.