The mystery services you pay for and aren't allowed to know about

There is a vast range of stuff involving taxpayers’ money that taxpayers aren’t actually allowed to know. Why?

Here is brief assortment of things you aren’t supposed to know. The terms under which Circle Healthcare was contracted to take over an NHS hospital in November 2011. The date by which the NuGen joint venture was due to construct a new nuclear power station at Sellafield. How much the Lord Mayor of Chester spends on leasing a chauffeur-driven Bentley.

This isn't an exhaustive list, you understand: these are just a few of the incidences in which that will-sapping phrase "commercial confidentiality" has popped up in the news over the last few months – put there, no doubt, by journalists steaming from the ears at their inability to get hold of actual facts and figures.

This dreaded phrase comes from the Freedom of Information (FOI) Act, which makes clear that, while the public has a perfect right to know about most of what the government does, there are certain areas in which the powers that be are within their rights to keep schtum: anything, in fact, deemed “prejudicial to the commercial interests” of somebody or other.

The result of all this is that there is a vast range of stuff involving taxpayers’ money that taxpayers aren’t actually allowed to know. Want to see the un-redacted contracts under which outsourcing firms are running public buildings? Or what targets they have to hit, to claim their rather expansive bonuses? Tough. None of your business. Bugger off.

If the private sector feels at all concerned about the impression this is leaving, it’s hiding it well. In early September, the main business lobbying organisation, the CBI, put out a report calling for greater transparency regarding how services were performing. This, it argued, would make it easier both to spread good practice, and to highlight when things were going wrong.

The reason for this sudden commitment to openness is simple: it drives trust. The more information we have about how good private firms are at offering public services, the CBI thinks, the more comfortable we’ll all get with the idea. The report doesn't quite come out and say it, but it seems to be aimed at things like the Staffordshire hospital scandal; its subtext can best be summarised as 'Game on'.

Not everyone’s going to agree with that, of course, but most people, at least, would probably say this commitment to openness is to the lobby group’s credit. There is, however, a gaping hole in its argument: it only talks about one side of the equation. The report includes an airy promise that “citizens are entitled to know how taxpayers’ money is spent”; but it mentions commercial confidentiality only once, and that’s to say how important it is that the rules allowing secrecy stays in place. As far as the business lobby is concerned, we’re allowed to see what’s coming out of public services; we’re not allowed to see what’s going into them.

If pushed on the matter, the CBI’s wonks point out that financial arrangements within the public sector tend towards the opaque, too. And they argue that publishing contracts would stifle innovation. Commercial confidentiality works like a patent: no one’s going to spend money coming up with a cleverer way of doing things if they think their rivals will instantly nick it.

But even if every closed contract is hiding a wealth of innovation, which is frankly hard to believe, isn't it in our interests that their rivals can see this and start copying it? If the risk of financial transparency is that everything gets cheaper, then I'm not convinced the downside is quite as big as the CBI thinks.

The real reason commercial confidentiality persists lies elsewhere. Outsourcing firms may not want any pesky members of the Public Accounts Committee trawling through their contracts – but neither does the government. There are no clear rules setting out what can be classed as confidential, or when it can be overruled by public interest. There is, what’s more, plenty of anecdotal evidence to suggest that specific financial information sometimes stays hidden at official request. If you were the guy who signed the PFI contract that included a £300 fee every time a light-bulb needed changing, you’d want it hushed up, too.

But there’s a sort of Prisoner’s Dilemma at work here. Both outsourcing firms and public authorities think it in their short term interest to keep everything quiet – but both might benefit from a touch of transparency. If there was a public interest rule that meant any contract involving public money would be subject to FOI, then the government would probably benefit by getting products and services cheaper. But companies could benefit too: partly because they could see what their rivals were up to, but mostly because everything the CBI says about the value of trust is entirely true.

Fairly or otherwise, a lot of people remain convinced that outsourcing companies are all evil profiteers, growing rich off the backs of children or sick people. Some of them aren’t. Some genuinely believe they can provide better public services at lower cost. Were they to be more willing to prove it, we might start to believe them.

Want to know how much the Lord Mayor of Chester spends on a chauffeur-driven Bentley? Sorry. Image: Getty

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.

Photo: Getty
Show Hide image

After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.