Part 2: Organisations to be considered for coverage by the Act because they are exercising functions of a public nature

15. When considering whether an organisation should be included in a section 5 order, we need to consider whether the organisation falls within the definition of section 5, that is to say whether it has functions of a public nature, or is providing under contract with a public authority any service whose provision is a function of the authority. We should then confirm at the outset that the organisation is neither already included in nor capable of being added to Schedule 1 (as explained in paragraphs 3 and 6 of this document), nor wholly owned by a public authority and therefore already covered automatically by the Act. Finally we need to consider whether it is appropriate to cover the organisation under the Act.

2.1 ‘Functions of a public nature’

16. In this part of the consultation paper we consider the first type of organisations to which section 5 relates: those that ‘[appear] to the Secretary of State to exercise functions of a public nature’. Determining conclusively whether or not any given organisation falls within this description can be difficult.

17. There is no single definition of what constitutes a function of a public nature for the purposes of the Act, either in relation to formal legal definitions or commonly accepted terms. Whether an individual organisation may lawfully be included in a section 5 order is something only the courts can determine conclusively, but some of the issues to be taken into account are outlined here in order to give a context for the consideration of appropriateness which follows.

18. What is perceived to be a function of a public nature partly depends on the position and perception of society and is likely to change with time. Certain functions, which may previously not have been seen as a public function, have become clearly public functions in today’s society – for example having a National Health Service. Equally some functions, once perceived as public, may today be seen as predominantly private functions.

19. The question of whether a person or organisation exercises ‘public functions’ or whether a person’s activities are of such a nature that they should be subject to public law constraints, has arisen in a number of different contexts and has been the subject of consideration by the courts. An example is in determining whether a person is a ‘public authority’ for the purposes of the Human Rights Act 1998 because certain of their functions are ‘functions of a public nature’ (section 6 of the Human Rights Act 1998). It is anticipated that the courts would be likely to have regard to broadly similar factors in relation to section 5 of the Act as they would when determining the scope of judicial review and the Human Rights Act 1998.

20. Some factors which may be relevant to determining these questions - many of which have been considered by the courts in the contexts mentioned above - are identified below. The presence of one factor in any given case would not act as a reliable guide that the person in question would satisfy the test, as the question needs to be considered in all the circumstances of the particular case at hand.

2.2 Appropriateness of coverage

21. Considerations that might be suitable to be taken into account under this heading include whether the organisation concerned receives public funding and whether the benefits of public access to the information held appear to outweigh any negative impacts, for example in terms of
additional burdens on resources.

2.2.1 Organisation funding

22. It may be appropriate to extend coverage of the Act only to those organisations that receive funding from the public purse or from fees charged as a consequence of performing a public function. Since only information relating to an organisation’s public functions would be covered by the Act, it would seem logical to specify those functions as the ones in respect of which an organisation to be included in a section 5 order should receive public funding.

23. There are a number of different sources of public funding for organisations, including core funding, funding for infrastructure purposes and funding to deliver specified services. Some functions of a public nature are funded by the charging of a levy. For example, the Pensions Ombudsman, who is already covered by the Act, is funded by a levy on pension providers.

2.2.2 Balancing access to information against the cost of FOI

24. There is a need to strike a balance between making information available through the use of section 5, and ensuring that organisations are still able to carry out their essential functions. Some of the factors that it might be appropriate to consider in deciding whether to cover an organisation are listed below.

Part 3: Organisations to be considered for coverage by the Act because they provide services under contract with a public authority whose provision is a function of that authority

25. In this part of the consultation paper we consider the second type of organisations: one which ‘is providing under a contract made with a public authority any service whose provision is a function of that authority’. Decisions about whether to designate such an organisation as a public
authority would be made on a case-by-case basis.

26. When considering criteria for the inclusion of such organisations in a section 5 order we need to consider the following questions:

3.1 Services whose provision is a function of a public authority

27. Public authorities enter into many contracts with external organisations. Not all contracts will be to provide a service whose provision is a function of the public authority, however, and it follows that not all organisations contracting with a public authority will be suitable for designation under section 5. The key criterion is whether the provision of that service is a function of that public authority. For example, if a local authority contracted with a private organisation to run some of its children’s homes, these might be considered services whose provision was a function of the authority. On the other hand, a contract to provide stationery or IT equipment for purposes purely internal to the public authority might not be considered as providing a service whose provision is a function of the authority. Thus there is a need to distinguish between services that the authority provides or is expected to provide as part of its functions (e.g. child protection), and those services that it commissions to enable or assist it to carry out its day to day activities (e.g. IT equipment).

28. Some of the factors listed earlier when considering whether an organisation exercises functions of a public nature are helpful in deciding whether a contractor is providing a service whose provision is a function of the public authority.

3.2 Appropriateness of Coverage

29. Even where a service provided under contract is a function of the public authority, it still might not be appropriate to designate the contractor. The benefits of public access to the information must outweigh any negative impact of designating the organisation as a public authority.

30. In general, a significant degree of public accountability already exists where a contractor provides a service on behalf of a public authority. The authority is still accountable for the service and will ensure that the contractor is accountable to it. Information held by the public authority about the service provision, either through the scrutiny process or through other means, will be covered by the Act. Contractors are sometimes required to provide information to the public authority if this is required for their business needs. The Office for Government Commerce has provided model contract clauses that require contractors to provide information and assistance with FOI requests.

31. Further, in some circumstances, information held by a contractor will be held on behalf of the public authority and therefore covered by the Act. It is therefore likely that much of the information relevant to services provided under contract is already accessible and so there will be less benefit in covering a contractor than in covering an organisation that exercises functions of a public nature in its own right.

32. There are also a number of potential disadvantages to covering contractors. Firstly, while most public sector bodies are established to provide a service, contractors are often businesses or voluntary and community sector organisations which choose to provide services. Having to comply with FOI may make these organisations reluctant to bid to provide services. A reduction in the number of organisations bidding to provide a service would not be in the public interest. Secondly, contractors may expect full cost recovery from the public authority. This cost could be greater than the actual cost of FOI as compensation for any perceived risk might be included.

Part 4: The requirement to specify functions or services

33. Sections 7(5) and 7(6) of the Act require that section 5 orders must specify which of the public functions of, or contracted services provided by, an organisation will be covered. Information the organisation holds which does not relate to the specified functions or services will not be covered. Many of the functions or services to be listed will be relatively straightforward, although there are a number of areas related to the running of an organisation where information could be concerned both with the function or service concerned, and with other areas. It will be important that it is agreed in consultation with the organisation how these will be handled. These include:

34. In general terms, it is expected that where these issues relate to the delivery of the service or function, this would be included in the function specified for the purposes of section 5. For example, if an organisation held a board meeting at which financial decisions were taken regarding a service delivered under contract, the relevant information would be subject to FOI, but other information would not. Similarly, information about staffing and management in relation to the service or function would be subject to the Act. The established FOI exemptions would apply as appropriate in these cases.

35. This approach could result in additional burdens for organisations that have only part of their services or functions designated under section 5. For example, they might need to consider how best to ensure that information management systems made available the information covered by FOI. This would need to be discussed and agreed during the consultation period and reflected in the Impact Assessment.

Part 5: What happens next?

36. Once this consultation has finished, the Government will analyse the responses and formulate proposals on whether to extend the coverage of the Act at this stage. If the Government is minded to use the power in section 5, a list of organisations to be considered for designation will be drawn up, taking into account the consultation responses received.

37. Before any section 5 order could be introduced, the Government would need to have consulted with the organisations proposed for designation or their representatives and with the relevant public authorities. Those public authorities and the organisations under consideration might also wish to enter into discussion between themselves. The views expressed would be taken fully into account in the drawing up of any order to be put before Parliament.

38. The Government would need to discuss on a case-by-case basis how much time designated organisations should have to prepare for FOI before any order took effect. Some could be ready for implementation quite quickly, either because their sponsoring public authority could offer support with implementation and the handling of requests or because they had long expected to be designated and had prepared accordingly. Others would need more time.