Local Government & Regeneration Committee inquiry - The Freedom of Information (Scotland) Act 2002 (Designation of Persons as Scottish Public Authorities) Order 2013

SCVO welcomes the opportunity to contribute this written submission to the Local Government and Regeneration Committee as part of its consideration of the Freedom of Information Designations Order. In your invitation to us it is stated: ‘To this end we would welcome a written submission setting out your views on this, outlining some practical examples of what you believe the impact of FOI will be for ALEOs, and for the voluntary/third sector more generally.’ Before we respond to the details contained in the order we should make it clear that SCVO does not consider ALEO’s to be part of the third sector, despite the fact that many obtain charitable status. There is no statutory definition of ‘third sector’ and the many different types of organisations in the sector utilise a wide variety of governance models and legal forms. This diversity and plurality is part of the strength of the sector and is necessary for its flexibility and creativity. However, separation from government is a key principle and demarcation of the third sector. It is therefore the control and influence exerted by local authorities that excludes ALEOs from our definition of the third sector. We would not allow ALEO’s to become members of SCVO, nor include them in our consortia or other work exclusive to third sector organisations. In addition, we see ALEOs who achieve charitable status as a direct threat to the reputation of the third sector and the charity brand. Public trust in charities is high[1] but negative stories around ALEOs with charitable status such as East Glasgow Regeneration Agency[2] and Riverside Inverclyde[3] pose a risk to that trust. We are also concerned that ALEOs may be diverting vital resources from the third sector to fund public services that should be resourced from local authority budgets. In reporting on third sector spend, a false impression could be created of the level of funding received by the sector if ALEOs are included in those calculations. There is also the danger of ALEOs presenting themselves as ‘third sector organisations’ and being considered as such by policy makers, the media and the public. This creates a false impression of an independent voice when in fact their views are simply an extension of those of the local authority. As the Community Empowerment & Renewal Bill progresses it will be critical that ALEOs are not perceived as third sector bodies that can be consulted as part of any community engagement process. This could lead to an unhelpful and insular process where in effect the local authority consults with itself on its own proposals with genuine community voices entirely absent from the process. There are also clear conflicts of interest which arise from the establishment of ALEOs in areas such as procurement. If a local authority is awarding contracts to an ALEO that is to all intents and purposes under their control, a clear conflict of interest arises.

FOI and ALEOs

We support the extension of FOI to all ALEOs. The control exerted by local authorities and the services they deliver clearly substantiate the view they: ‘exercise functions of a public nature’[4]. We would like to see FOI extended to all ALEOs not just those ‘whose functions on behalf of any of those authorities include developing and/or delivering recreational, sporting, cultural or social facilities and activities.’[5] We see no reason in principle why this order is limited to the culture and leisure trusts and does not extend to other arms-length bodies. To maintain transparency, accountability and scrutiny of the public pound, it is vital that all ALEOs are subject to FOI to ensure that by creating ALEOs local authorities cannot avoid their duties in this regard. The commitment of Glasgow Life and other ALEOs to FOI and the Publication Scheme[6] is commendable and shows that it is achievable without overburdening an organisation. However, FOI should not be something arms-length bodies choose to opt in to, it should be a legal requirement based on the principles of FOI. The ‘description of person’ in the Order defines ALEOs as being ‘established or created solely by one or more local authorities’[7]. We have concerns that this might create a loophole that would allow new ALEOs to be established by local authorities with other bodies to exempt them from being covered by this order.

FOI & the third sector

SCVO has maintained a clear position on extension of FOI to the third sector. We support the extension of Freedom of Information to include the provision of all public services, irrespective of whether those services are provided by public, private or third sector organisations. In our view the public have a right to know all aspects of how publicly funded services are funded and run. Our view is that the best way to achieve this would be to insert a Freedom of Information clause into all contractual relationships between government and public service providers which requires compliance. This requirement would remain active for the lifetime of the contract and would only apply to information related to the contract. SCVO has consistently opposed the extension of FOI legislation to individual third sector organisations. In our view this would represent a disproportionate burden on charities and social enterprises and would discriminate against them in respect of their non-government and non-public service work. Either all organisations, including those which are exclusively commercial, should be covered by FOI, or its obligations should be focussed on the public sector and public services.

Conclusion

The combination of local authority control, without the transparency and accountability of public bodies, currently present in ALEOs is a threat to proper scrutiny of public service delivery. We therefore support the proposed order which will extend FOI to culture and leisure trusts. However, it is our view that all ALEOs should be covered by the legislation and further action is required to bring other arms-length bodies under FOI. In addition to the transparency problems, we are also concerned by the growing number of ALEOs with charitable status. Through their increasing public profile, they pose a threat to the charity brand and risk confusing the public about the values and principles that underpin the charitable sector.