The rules governing
the public's rights to view and copy local authority files
are profiled in this section. |
The
Local Audit and Accountability Act 2014
The Accounts and Audit Regulations 2015 (England)
The Local Audit (Public Access to Documents) Act 2017
The Accounts and Audit (Wales) Regulations 2014
The Local Authority Accounts
(Scotland) Regulations 2014
The
Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015
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 Download our handy PPT presentation here
29
October 2010:
The Court of Appeal today ruled that taxpayers
and voters are entitled to examine and copy local authority contracts and invoices
- but that councils and contractors are permitted to protect legitimate 'trade
secrets'.
Lords
Justice Rix, Jackson and Etherton today said the Audit Commission Act 1998 (a
law which permits the public to trawl through local govt accounts each summer)
requires councils and police authorities to disclose files to local taxpayers
and voters except where there is a 'strong public
interest' against disclosure.
The three
appeal judges agreed that the European Convention on Human Rights, as enacted
in the Human Rights Act, and European Directives on confidential data, provides
limited scope for protecting 'commercially confidential'
information contained in contracts, invoices and other documentation in council
and police authority accounts.
On one hand the council must subject itself
to public scrutiny by allowing local persons to inspect contracts, invoices, deeds,
bills and receipts, but on the other hand the council has a duty to protect the
public purse and
ensure that 'confidential' information is not disclosed in a way that harms the
public interest, the court stated.
 |
The case concerned an attempt by environmental campaigner Shlomo Dowen (pictured
left) to obtain details of PFI contractor Veolia's commercial dealings with Nottinghamshire
County Council, notably copies of the contract and associated schedules, and monthly
invoices. |
The Court of Appeal had
to balance Mr Dowen's legal right to view the data and (should he choose) to make
representations or objections to the district auditor, with Veolia's rights to
protect its own pricing formulae. The company argued that such disclosure would
harm its interests should the information get into the hands of its competitors,
which could only compromise the council's attempts to achieve 'best
value' and efficiency. That point was endorsed
by the Audit Commission, which was an interested party in the case.
The
court's decision (which is a re-statement of existing legal approaches to treatment
of confidential information and which follows a 2004 EU directive on public bodies'
usage of confidential information) means that councils and police authorities
will have to balance
the public and private interest before disclosing or withholding data described
as 'confidential'.
It also means that local taxpayers, journalists and
voters will either need to seek Judicial Review (if they have reason to believe
data is withheld during the statutory public audit period for improper reasons)
or lodge an objection
with the external auditor (who has wider powers to obtain documents).
The
court agreed confidential information can be withheld during the audit period,
but disagreed whether the common law or the 1998 Act impliedly prevents voters,
taxpayers or journalists using any information gleaned other than for the express
purpose of raising questions or objections with
the auditor.
Veolia pressed for a resstriction on publication of any data
viewed and copied by 'interested persons' during an audit, but Mr Dowen's Counsel
Mr Timothy Pitt-Payne argued any general restriction was a matter for Parliament
and not for the courts to implement.
Rix LJ said: "I am not entirely
convinced that English common law has always regarded the preservation of confidential
information as a fundamental human right. Nevertheless it can be seen that it
is a species of 'possessions' with which the state cannot interfere without justification.
"I
see no difficulty in reading down section 15(1) [the right of an 'interested person'
to inspect and copy accounts and associated documents] so as to provide an exception
for confidential information because ... the structure of the Audit Commission
Act as a whole shows a clear regard for preservation of confidence subject to
the demands of a proper audit."
That
does not mean that any financial record described as 'confidential' can be withheld
from taxpayers, voters and journalists, the court concluded.
Rix
LJ said: "Confidential information comes in all shapes and sizes and there
is also an opportunity for parties by agreement to misuse its categorisation.
"In my judgment, the proper and preferable approach is that of reading
down the right of access by reference to well developed principles for dealing
with confidential information which exist where there is a conflict
between competing values."
In a dissenting part of his judgment, Rix
LJ argued that local taxpayers, voters and journalists should not be permitted
to disclose any information to any person other than the district auditor, and
should not be at liberty to publish the data without permission.
Mr Dowen had already received some confidential material which he could "only
use for the purposes of the audit".
But Etherton LJ and Jackson LJ
disagreed. Etherton LJ said: "There are many ways an interested person who
obtains information might seek to deploy such information. I am doubtful that
it is helpful to consider the lawfulness of such conduct in the abstract ... where
a claimant seeks to restrain the use of information."
If a party to
a contract wanted to prevent a local taxpayer, voter or journalist publishing
the data (whether 'confidential' or not) then equitable relief through an injunction
might be available, Etherton LJ said.
Jackson LJ said: "We should
not decide the use to which information accessed under section 15(1) of the Audit
Commission Act 1998 should be put."
Laura Gyte, Friends of the Earth
lawyer (acting for Mr Dowen) said: "The Court of Appeal have confirmed the
victory in this case for freedom of information. "We
are disappointed that the Court of Appeal implied a qualification on commercial
confidentiality - in our view this is a matter for Parliament to decide upon -
but it is important that even where commercial confidentiality is
claimed,
the audit laws mean that public authorities must still disclose the
information
where it is in the public interest
to do so." The
Court of Appeal decision is available on the bailii.org (British and Irish Legal
Information Institute) website.
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12
July 2010:
The Court of Appeal has been tasked to decide whether
UK taxpayers and voters (including journalists) are free to view, copy and then
publicise details of Town Hall finances.
Lords
Justice Rix, Jackson and Etherton are to judge whether the Audit Commission Act
(a law which permits the public to trawl through local govt accounts each summer)
must be tightened up, to enable councils and consultants to keep 'confidential'
contracts and invoices out of public view.
The court is also to rule whether
taxpayers and voters (including journalists) should be prohibited
from disclosing any information inspected and copied to any individual or organisation
other than a nominated district auditor - who will determine what information
can be made public. |
| Nottinghamshire
County Council was constrained under a temporary injunction obtained by Veolia
ES (Nottinghamshire) Ltd not to disclose parts of a contract and parts of invoices
relating to a waste incinerator PFI project, to a local taxpayer and Friends of
the Earth campaigner Mr Shlomo Dowen (left). |
Mr Justice Cranston ruled in October 2009 that there was no provision in the Audit
Commission Act to allow Veolia or Notts CC to withhold information from a local
elector or taxpayer on grounds of 'commercial confidentiality'.
Veolia's appeal against that High Court decision was heard before Lords Justice
Rix, Jackson and Etherton on 5/6 July 2010. Judgment was reserved.
The
case has taken on added significance because of its wider implications for the
rights of local government electors and taxpayers, journalists, campaigners and
local businesses to probe
details of local council and police authority accounts in the future, and to publish,
disclose or network material gleaned from their own enquiries.
That is
because Counsel for Veolia, the Audit Commission and Notts CC presented the Court
of Appeal with two critical questions on legitimate and illegitimate use of information
gathered.
Firstly whether any information in invoices, contracts, receipts
or bills, described by contractors or consultants as 'commercially confidential'
or 'trade secrets'
, can be withheld from public scrutiny altogether.
Secondly to rule whether
the law prohibits taxpayers
and voters from
showing any documents inspected and copied to persons other than the district
auditor - regardless of whether or not it is marked 'confidential'.
It
means the Court of Appeal is being asked to rule whether voters and taxpayers
(including journalists) act lawfully or unlawfully if they publish (or upload
onto the web) any details of council and police authority expenditure inspected
and copied during the annual audit at their local authorities.
Counsel
for taxpayer and campaigner Mr Dowen urged the Court of Appeal not to impose any
legal limitations on voters' and taxpayer's' rights to access and circulate financial
records, warning of a 'chilling effect'
on the public's right to know.
In the course of submissions, Lord Justice
Rix said: "When the court has to conduct a balancing exercise, or a 'reading
down' exercise, there are three ways you can read down the primary authority with
confidential information in mind.
"One is to say that the statute
only gives a limited right of access
to certain documents. One way is to say that you can have documents but you should
be concerned about how much confidential information you give away.
"It
may be that the statute allows for redaction because the auditor can see the documents
and can determine how far to dig, given that the auditor has obligations
of confidentiality.
"Another way is to say you may inspect the documents
but only for the purpose envisaged by the Act, [which is] to inspect and to object
to the accounts."
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Mr
Philip Coppel QC, for Veolia (claimant)
"The
only purpose for making the accounts available for 20 days, is for the purpose
of questioning the auditor.
"There is an obligation on the auditor to
listen to an objection from an elector but not to act on every objection. It is
not an opportunity for a local government elector to duplicate what the auditor
does. The auditor is independent of the local authority and is qualified.
"The
principle is that anyone doing business with a council will want to be very sure
that, when they provide confidential information to a public authority, that confidentiality
is maintained.
"The [legislation enabling an interested person to inspect
and copy accounts to be audited] lacks a sufficient clear intention to displace
the protection afforded to commercially confidential information [recognised]
by [common] law. The right of access does not extend to such information." |
Mr Peter Oldham, for the Audit Commission (2nd interested
party)
"Given our remit, we feel
a result permitting untainted use of confidential information is not going to
support cost effective local government.
"If the information becomes
generally available, it might affect the value that a local authority got from
a particular contractor.
"My learned friend [Mr Coppel] says the information
[Veolia] seek to protect is commercially valuable.
"In other words, if
it were to be released generally then clearly that could have a damaging effect
on the prices available for that type of service.
"We see nothing that
would prevent the person interested from taking it to the auditor, who would make
use of the information to report any iniquity." |
Mr
Clive Lewis QC, for Nottinghamshire CC (defendant)
"There
is a question [that] if we do have access to information, confidential or not,
what does Parliament intend the local government elector to have the access for?
[One] interpretation is that, once you have the information, then you are free
to do what you want.
"We say that inspection must be for a legitimate
purpose and, if it is more limited, then we just use it for the audit purposes.
It is clear that the intention of Parliament was to ensure proper democratic accountability
for public funds.
"It is public money and the local government electors
need to be sure that it is being spent wisely, especially at the present time.
"Veolia
knew or should have known there is emphasis on value for money and that interested
persons may exercise their rights [to inspect the accounts]. They can't say that
they didn't know about it." |
Mr
Timothy Pitt-Payne QC, for Mr Dowen (1st
interested party)
"If there is a
restriction about the purpose or intention about how the information can be used,
then that would suggest that the local authority can ask questions about the interested
person's purpose before the information is disclosed.
"That would have
a chilling or limiting effect on the exercise. [Can an elector] show the information
to a friend who has some expertise, to formulate some questions to the auditor?
"What if he wants to tap on the expertise from further afield and he
puts it on the internet and invites comments from anyone with relevant experience?
"Let's say the local government elector has information and wishes the
Press to cover the issue, and shows the information to a journalist so that the
journalist can write about the issue. Is that proper or improper?" |
A
detailed summary of Counsels' submissions to the court, and judges' questions
and comments, are available in the following PDF files.
Mr Justice Cranston's High Court decision is available on the bailii.org
(British and Irish Legal Information Institute) website.
For
further guidance, contact ONB.
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The Veolia and Nottinghamshire County Council court
cases (2009/10)
The
ONB and Lincolnshire County Council court hearing (2005)
The
HTV and Bristol City Council court case (2004)
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