Business chiefs warn over extension to FoI

Published on Thursday 4 November 2010 14:48

BUSINESS organisations have hit out at government moves to extend Freedom of Information (FoI) obligations to private firms involved in public sector contracts.

CBI Scotland has fiercely criticised the Scottish Government proposals, saying that "no convincing case" had been put forward for extending the legislation.

The Freedom of Information (Scotland) Act gives anyone the right to obtain information from publicly-funded bodies, such as councils, hospitals and prisons, about their activities.

The latest proposals could see contractors who build and maintain schools, hospitals and roads subject to FoI laws along with private prison operators and leisure, sport and cultural trusts set up by local authorities and housing associations.

The business lobby group said the proposals flew in the face of "encouraging steps" taken by the Scottish Government to simplify regulation and public procurement - and that, ultimately, the taxpayer would end up bearing the extra costs.

In a submission to the government's consultant on the proposals, David Lonsdale, assistant director of CBI Scotland, said: "At a time when the public finances are so tight, and when efficiency and innovation in the delivery of our public services ought to be at a premium, then private sector provision ought to be supported and extended, not made more difficult.

"Extending FoI obligations to include businesses which supply public services - when the public authorities who commission the service are themselves already subject to FoI - is unnecessary, will raise the cost of public services, and could deter potential suppliers from contracting with government."

David Watt, director of the Institute of Directors Scotland, agreed, saying an extension of FOI would discourage businesses from bidding for work.

"We're quite concerned about the potential for this to damage the commercial aspect of businesses," he told Scotland on Sunday.

"In the public sector, a significant amount of staff time and resource go into answering FOI requests and not every company will want to spend that time and resource. It makes contracts less financially viable."

Watt added that companies would not want to "expose all of their ongoing information to public scrutiny. It goes beyond figures related to public-sector contracts," he said. "FOI requests could cover companies' entire businesses, not just the bidding process."

The Federation of Small Businesses (FSB) in Scotland argued the burden would likely fall on small subcontractors. For example, if a large contractor was asked how many miles of cable went into building a hospital, it was likely to pass the question onto the electrical firm that it sub-contracted to do the work.

Colin Borland, public affairs manager at the FSB in Scotland, said: "We know from past experience that perfectly well-intentioned legislation can throw up a host of unintended costs and headaches for small businesses.

"Our concern here is that legislative requirements which are designed for the sort of large multinationals who are the main contractors on major public works will, in practice, end up being met by the small subcontractors."