Accessing Local Authority Information: The Audit Commission Act: A Wider Right than FOI?

Local authorities are bracing themselves for an influx of requests after a recent case held that confidential and commercially sensitive information, which would normally be exempt from disclosure under the Freedom of Information Act 2000 (FOI), could be disclosed under previously little known provisions of the Audit Commission Act 1998 (the 1998 Act).

The 1998 Act provides that “persons interested” can inspect and make copies of local authorities’ accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them.

In October 2009, the case of Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council [2009] EWHC 2382 held that the in relation to the 1998 Act considerations of commercial sensitivity and confidentiality were not relevant.

At the end of last year, however, the Court of Appeal threw a lifeline to those who contract with the public sector by providing that an authority must show that the public interest in disclosure outweighs the private interest in protecting such information.

This brings the situation into a similar position as FOI where the exemption for confidential information and commercial sensitivity are subject to a public interest test: whether the public interest in maintaining the exemption is outweighed by the public interest in disclosure. It should be noted, however, that the balance in FOI is between public interests, whereas under the Veolia judgement, the exercise is in balancing private interests against the public interest. This means it may not be difficult to prove that a private interest in withholding project documents is outweighed by the public interest in knowing how public money is spent.

Scotland

Although the 1998 Act does not apply in Scotland, there is a similar right to inspect contained in s.101 of the Local Government (Scotland) Act 1973. The public right to object to accounts is wider in the Scottish provisions as any person interested can object and appear before the auditor while in the English provisions it is restricted to local government electors.

In fact, the right of any interested person to inspect local authority accounts has already been bolstered in the case of Stirrat v Edinburgh City Council 1999 SLT 274 in which the Court decided that simply because the requestor was a council tax payer in the relevant local authority meant that he had title and interest in seeing the accounts and that the motive was irrelevant.

It is therefore likely that if the matter arose again in Scotland, a Scottish Court, persuaded by the Veolia decision, would reinforce this position.

How will this affect me?

The expected effects of the Veolia decision should be set in the context of the parameters within which information may be obtained. The combination of the public interest test and stringent procedural rules contained in the Accounts and Audit Regulations 2003 and, in Scotland, the Local Authority Accounts (Scotland) Regulations 1985 may mean that the amount of requests which will be accommodated will be relatively small.

Nonetheless, the opportunity remains for the public to access commercially sensitive information which could be extremely harmful for private companies as does the possibility of local authorities breaching confidentiality obligations by improper application of the legislative provisions.

On paper, it would appear that the Veolia decision does give rise to a right wider than FOI. Exercising that right may, however, be difficult and may mean that in practice Veolia does not mark the watershed in accessing public information that it might otherwise have been.

Read our guide to dealing with these requests here.

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