REUTERS | Andrew Winning

Public sector investments and the Freedom of Information Act 2000

On 18 October 2016, the Information Commissioner (IC) issued ICO decision notice FS50627178 which determined that the exemptions in sections 41 (information provided in confidence) and 43(2) (commercial interests) of the Freedom of Information Act 2000 were not engaged by a request for quarterly data relating to a local government pension fund’s holdings in seven investment funds. This is unlikely to be a controversial decision in itself but serves as an interesting reminder of relatively well-established principles and the IC’s approaches to private equity and pensions investments made by councils.

The respondent, the City of Bradford Metropolitan District Council, was the subject of a further request for fund performance data which it refused and which was considered by the IC in April 2016. That case, ICO decision notice FS50588878, presents an interesting point of comparison not least because the IC determined that the council could rely on the section 43(2) exemption.

In addition, the October 2016 case referred to the 2007 ICO decision notice FS50083667 relating to Tameside Metropolitan Borough Council, which was required to disclose similar aggregated fund level information, albeit not on a periodic basis. The arguments made by the requester in the present case before the IC were notable and made interesting reference to councils’ and public sector investors’ approach to disclosure of private equity data in the last decade.

In both cases, the council was the administering authority for the West Yorkshire Pension Fund (WYPF), a local government pension fund administering the Local Government Pension Scheme for employers and scheme members. WYPF published details of its investment portfolio annually on its website.

October 2016 IC decision (FS505627178)

In March 2016, the requester had asked the council for quarterly data detailing WYPF’s commitment to and cumulative distribution, cumulative contribution and market value of holdings in specific investment funds. The requester wanted the information in order to conduct research on the long term performance of an investment asset class, which he offered to share with WYPF once completed.

The requester had in fact made a similar earlier request to the council for quarterly investment data in June 2015, which it had refused on the basis that it published data annually and, therefore, that the exemption under section 21 (information accessible to applicant by other means) was engaged. In a decision notice dated 6 January 2016, the IC determined that the council could not rely on section 21 on the basis that the annual data was not within the scope of the request (the IC supposed that the council may have misread the request) and ordered it to disclose the information (see ICO decision notice FS50589743).

Refusal of the March 2016 request

The March 2016 request appears, however, to have been more specific and related to particular investments. Nonetheless, the council refused the request, relying this time on the section 43(2) exemption on the basis that disclosure would prejudice its commercial interests and those of co-investors and the investment funds. It argued that the quarterly cumulative data was far more likely to provide an insight into commercially sensitive trading activity, even at a summary level, and that disclosure may make private equity managers reluctant to do business with WYPF in future.

Before the IC, the council also relied on the section 41 exemption but, to the apparent confusion of the IC, did not submit “any arguments” as to why disclosure would constitute an actionable breach of confidence.

The requester’s submissions on disclosure and public sector investment

The requester’s arguments before the IC are notable and included that:

  • Public sector investors have become increasingly transparent and prepared to disclose data on fund performance, and that they report on this on a quarterly basis as this reflects the capital account statements they receive. This has followed the IC’s decision notices FS50083667 and FS50086121 (relating to Hertfordshire County Council), issued almost a decade ago, which required aggregated fund performance data to be disclosed by public authorities. There has, the requester argued, been no negative consequence to these decisions and, in fact, public investors have invested more into private equity than they did before those decisions.
  • Other pension funds disclose quarterly data on their websites or on request (the Merseyside and Berkshire Pension funds were singled out as examples).
  • His request was for historical data, typically “six months out of date”, and did not extend to the most up to date information held by the WYPF that would invariably have included capital drawdown and distribution notices. The requester acknowledged that this information was highly confidential.

The IC’s decision

In respect of the section 43(2) exemption, the IC considered that the council had not sufficiently explained why the quarterly data would be more likely to be commercially sensitive and more likely to betray individual trade information than the annual data, particularly given the long-term investment approach taken by the WYPF. The council had failed to demonstrate a causal link between disclosure and prejudice to commercial interests (see ICO: The prejudice test (March 2013), at paragraph 33).

In respect of section 41, it was not immediately apparent to the IC that disclosure would cause specific detriment to any party nor, therefore, that it would breach an obligation of confidence. The IC cited the breach of confidence test in Coco v Clark [1969] RPC 41 (see Practice note, Freedom of information and information provided in confidence: section 41 FOIA: Breach of confidence: orthodox approach).

Given that, in addition, other pension funds publicly disclosed equivalent data, the IC decided that neither exemption was engaged. The IC ordered the council to disclose the information to the requester.

May 2016 IC decision (FS50588878)

Presenting an interesting point of comparison, the council had refused a request for WYPF performance data in May 2015 from another requester, which had asked for latest cash flow statements for each fund “priced on a daily, weekly or monthly basis” as appropriate which could be made in an “unlocked” format which was capable of being manipulated and edited. The council withheld the information relying on section 43 before the IC. In April 2016, the IC considered that section 43 was engaged, and that the public interest was in favour of withholding the information. Notwithstanding the public interest in increased accountability and transparency which disclosure would allow, the IC considered in particular that:

  • The requested level of information was not normally made public.
  • If it was made public, there was real potential for private equity managers to be negatively affected and, consequently, discouraged from working with the council.
  • This could, in turn, jeopardise the council’s ability to invest in private equity.

The IC held that the council could rely on section 43 (ICO decision notice FS50588878).


The cases present an interesting reminder and discussion of the IC’s approach to private equity and pensions investments made by councils.

The October 2016 decision indicates that a council may not be able to treat quarterly fund performance data differently to annual or “latest” data (as was requested in FS50083667). It is notable that the IC commented in the April 2016 decision that “accountability of investments is partially achieved through the publication of details of [WYPF’s] website and in its annual statements”, however, and that decision will be of some solace to local government pension funds that are faced with requests for perhaps uncomfortably detailed or recent performance information.

The key differences between the information requested in each case appears, effectively, to be the level of detail and the age of the data. The information requested in the April 2016 case was, specifically, the “most up to date” and of a level of detail that was not normally put into the public domain and, consequently, would be to the detriment of the operation of the WYPF if it was. The information requested in October 2016 was, however, historic and of a type that was routinely made public, notwithstanding that disclosure may not have been desirable for private equity managers.

The requester in the October 2016 made numerous interesting arguments about public investment since the 2007 decisions. Whilst the IC did not and was not required to scrutinise or promulgate upon these in particular detail, a more tightly contested freedom of information case relating to public sector investments in private equity may yet consider the merits of similar arguments.

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