NHS Lothian will not appeal the decision of the Scottish Information Commissioner that forced the publication of a £1.2bn private finance initiative (PFI) hospitals contract.
The decision could be a landmark in extending freedom of information (FOI) legislation into the private sector.
Scottish Commissioner Kevin Dunion told technology law podcast OUT-LAW Radio this week that he believes the public has a right to probe private contracts.
"The FOI Act should follow the money and if the money is being spent on public functions whether it is directly from the public authority or a private contractor then information about that should be made available to people," he said.
Dunion recently ordered NHS Lothian to publish the contract between it and PFI operator Consort for the £1.2bn building and 30-year operation of the Edinburgh Royal Infirmary.
OUT-LAW has learned that NHS Lothian will not appeal the decision, and that Consort has agreed not to sue the authority.
The health authority said that it had refrained from releasing the contract because it was threatened with legal action by Consort for breach of confidentiality.
"NHS Lothian was willing to release information in February 2005 but was prevented following legal advice from Central Legal Office, which reflected the position taken by Consort our PFI partners in respect of commercial confidentiality," said a statement from NHS Lothian.
"We work in partnership with our private sector partners Consort, who operate the Royal Infirmary of Edinburgh, and it was felt by them to be inappropriate to release financial details for reasons of commercial confidentiality," said John Matheson, director of finance for NHS Lothian.
Dunion told OUT-LAW Radio, though, that local authorities must be responsible for their information and must not put the interests of private developers above those of the public's right to know.
"The code of practice makes it quite clear that public authorities should not enter into confidentiality agreements on such contracts or indeed on any contracts," he said. "It's up to the authority to set out its arguments and its conclusions to me under the legislation."
"The code of practice which we have in Scotland and which exists elsewhere in the UK suggests that companies and authorities that are drawing up contracts should assume that information should be proactively put into the public domain," he said. "When you receive an FOI request for goodness sake [don't] assume that simply asserting asserting commercial confidentiality is going to get you anywhere. It clearly will not."
FOI legislation only applies to public authorities, but Dunion's ruling that the public authority's contract with a private PFI firm must be published extends it a little way into the private sector.
The Ministry of Justice in Westminster, though, has just launched a consultation on the formal extension of FOI law into the private sector to take account of the fact that public sector functions are increasingly carried out by private sector companies.
The [FOI] Act includes provision to extend its coverage to organisations that carry out functions of a public nature and to contractors who provide services which are a function of that public authority," said the consultation paper.
"The aim of the consultation document is to seek views as to whether the Government should…extend the coverage of freedom of information (FOI) and if so which organisations it should consider."
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