To provide the Audit and Governance Committee with a briefing on commercial confidentiality.

The Head of Governance introduced a report which provided the Committee with an overview of the concept of commercial confidentiality and its impact on relationships between Herefordshire Council and external agencies; this sought to address issues raised at the General Overview and Scrutiny Committee on 14 January 2013 (minute 27, ‘Hereford Futures Governance Update’, refers).

A Committee Member emphasised the need for clarity and integrity when dealing with external partners or agencies.  Referring to the Risk Management section of the ‘Freedom of Information and Arm’s Length Companies’ report submitted to the General Overview and Scrutiny Committee on 4 March 2013, it was noted that ‘There is a presumption of disclosure under the Act, so any ‘borderline’ decisions should come down in favour of making information public.’  It was felt that agreements and contracts needed to reflect the presumption in favour of transparency from the outset.  Support was expressed for the comments of Margaret Hodge MP, Chair of the Public Accounts Committee in the House of Commons, that “Too much is hidden behind commercial confidentiality and I think that has now become an excuse for hiding data and information that we need to assure Parliament and the public that there is value for money” (BBC Radio 4, File on 4, ‘Public, Private and Profitable’, 23 October 2012).  The Committee Member said that it was likely that more key public services would be delivered by private companies in the future and it was vital that tax payers had the opportunity to follow public money.  He added that Councillors should not be satisfied with purely technical answers from such bodies.

The Head of Governance explained that, within the Constitution (Part 2 - Articles, 2.13.3.1, Confidential Information), Councillors had ‘… a right to any information which they need in order to fulfil their functions as Councillors but may need to demonstrate that they have a need to know that information ...’.  In terms of confidential information, key factors to be considered included who held and who owned the information, and whether the information was likely to prejudice commercial interests if disclosed.  Nevertheless, confidential information could be disclosed with the co-operation and consent of the party to whom the obligation of confidentiality was owed.

The Scrutiny Officer said that public / private relationships were an emerging issue and, until properly tested, authorities needed to consider the risks of unilateral disclosure bearing in mind the potential level of damages if found to be in breach of confidence.  The Monitoring Officer added that there was a strong public interest in openness but this did not override all other considerations.

A Committee Member commented that unnecessary disclosure of information could undermine negotiations with other parties.

In response to a question, the Head of Governance advised that the Freedom of Information Act only applied to companies that were wholly owned by a single public authority currently but it was anticipated that the Act would be extended to cover other public ownership arrangements in the near future.  Noting that it was difficult for members of the public to obtain information at present, a Committee Member said that greater transparency would enhance public perceptions of such bodies.

A Committee Member felt that, to ensure proper scrutiny and accountability of organisations that were spending public money and delivering elements of Council policy and projects, openness should be the normal position; he added that genuinely sensitive information could be redacted as appropriate.

The Chairman thanked attendees for their interesting contributions.

RESOLVED:  That the report be noted.