Practical Law

Jackie Gray, Director, Dickinson Dees LLP:

Local authorities are now required to publish, online, spending data, tender documents and contracts over £500 as part of the government’s Transparency Programme (the Programme). The requirement also extends to central government departments, non-departmental public bodies (NDPB’s), government trading funds and NHS bodies (including NHS trusts), although the threshold for publication of spending data for those public authorities is £25,000 and tenders and contracts is £10,000.

In this post, Jackie Gray looks at the implications of the Programme for local authorities and, in particular, what steps authorities should be taking now.

Background

Greater public sector transparency is one of the main policies of the coalition government.  The key driver for transparency is the need to demonstrate to the public that taxpayer money is being spent appropriately and to make politicians and public bodies accountable for what they spend in a period where significant savings need to be made to reduce the public deficit.

The Programme was launched in a letter by the Prime Minister to government departments in May 2010 setting out the government’s requirements. Following this, Eric Pickles, the Secretary of State for Communities and Local Government, wrote to all local authorities setting out how this applied to local government and additional information which he called for local authorities to publish. The Programme has also since been extended to fire and rescue authorities.

Although there is currently no legal obligation to comply with the Programme, there is clearly an expectation that most affected public authorities will comply with its requirements. The Department for Communities and Local Government has set up a “transparency timeline” on its website showing those local authorities who have started to publish spending data, together with an A-Z list of local authorities with direct links to the spending data on their websites. However, a week before the 31 January 2011 deadline more than one third of local authorities had yet to publish spending data and the message from Eric Pickles was clear:

“The final countdown for councils has begun. In the last six months more than half of all councils have got their house in order. Today I’m putting those councils still to open up on one week’s notice”.

Whilst the deadline for the publication of spending data has been a hot topic, the publication of tender documents and contracts has not been the subject of as much attention. However, for public sector procurement and contracts lawyers these requirements are likely to have a greater impact on their day to day work, and in many cases, will need to be addressed now in relation to current procurement exercises.

Impact on current procurement exercises

Where a procurement was commenced prior to 1 January 2011, there is no requirement to publish the tender documents. However, all new contracts entered into after 1 January will need to be published, together with a summary of the contract data. In relation to the procurement of IT contracts by central government departments, NDPB’s, government trading funds and NHS bodies, the publication requirement however applied to new tenders and contracts from 1 July 2010.

For current procurements where final tenders have not yet been called for, transparency notices can be included in any subsequent tender documents issued. Contract terms and conditions can also be updated with transparency clauses which seek the consent of suppliers to the publication of the contract.  To assist with redactions, bidders should also be asked as part of their bid response, to complete a redactions schedule setting out what parts of the contract they consider may be exempt from disclosure under the Freedom of Information Act 2000 (FOIA) or the Environmental Information Regulations 2004 (EIR), together with detailed justifications as to why.

Where final tenders have already been called for and where there were no transparency notices in the tender documents or contract, public authorities may still be able to obtain consent to the publication of the contract from the preferred bidder. On large procurements where a preferred bidder letter has not yet been issued, it may be possible to incorporate this consent into the preferred bidder letter. Where consent is provided, public authorities will also need to agree with preferred bidders those aspects of the contract which may be sensitive and should therefore be redacted. Most bidders active in the public sector will already be aware of the Programme and therefore should be aware of the new requirement to publish contracts.

For a procurement under an existing framework agreement, advice should be sought from the public body or government department who manages the framework agreement in relation to the publication of the call-off agreement. For example, Buying Solutions has provided guidance for both suppliers and customers on what can be published in relation to framework agreements they manage.

Where a public authority has set up its own framework agreement prior to 1 January 2011 which did not include transparency clauses, then it may still be possible to obtain consent from suppliers to the publication of call-off agreements. Where consent is provided, agreement should be reached on any sensitive provisions which may need to be redacted, using a redactions schedule. Whether a framework agreement entered into prior to January 2011 can itself be published will depend on the framework agreement terms and conditions and whether consent is provided by all of the relevant framework suppliers. It is however anticipated that in most cases, only new framework agreements will be published.

Recommended actions

Compliance with the Programme will require public authorities to put in place new procedures for the collection, review, redaction and publication of data, tenders and contracts. Actions which public authorities may therefore need to take include:

• Building the transparency obligations into contract procedure rules or standing orders, particularly in relation to the capture of data and documentation about low value requests for quotations and contracts which may not currently be captured in procurement and contracts databases.
• Building additional time into the procurement process and timetable to address the new publication procedures arising out of the transparency requirements, including the time to produce redacted versions of tender and contract documents for publication.
• Updating contracts and tender documents with suitable transparency clauses and developing redaction schedules for bidders to complete to identify possible contract redactions and applicable exemptions under FOIA or the EIR.
• Establishing an internal process for the consideration of exemptions and agreement of redactions, including identification of suitably qualified or experienced staff who can advise on exemptions.
• Agreeing internal responsibilities and implementing a protocol for quality checking and approving the publication of data, tender documents and contracts. 
• Ensuring there are processes in place to prevent the inadvertent disclosure of personal data that would breach the Data Protection Act 1998.
• Making staff and suppliers aware of the new transparency obligations and managing supplier and bidder expectations in relation to the application of exemptions and redactions to contracts and spending data.
• Establishing a transparency page on your website to publish data about spending, tenders and contracts.
• Reviewing intellectual property ownership and licensing arrangements in relation tender documents and contracts and developing appropriate licensing provisions governing the re-use of documents by members of the public.

If anyone has any views on these recommended actions or other tips on how local authorities can meet their transparency obligations please feel free to submit a comment below or get in touch with PLC Public Sector.