ACCESSING LOCAL AUTHORITY INFORMATION UNDER THE AUDIT COMMISSION ACT 1998

November 9th, 2009 by Anya Proops QC

It is often thought by members of the public that the only way to access information relating to how local authorities are spending public monies is through the application of the Freedom of Information Act 2000. However, a recent judgment of the High Court has highlighted that such information may also be accessed in certain circumstances under another much less well known enactment, namely the Audit Commission Act 1998 (ACA). In summary, section 15 ACA permits ‘any person interested’ (e.g. local council tax payers) to inspect a local authority’s accounts and documents ‘relating to’ those accounts at the time of the authority’s annual audit.

In Veolia ES Nottinghamshire Ltd v Nottinghamshire CC & Ors [2009] EWHC 2382 (Admin), an inspection request was submitted to the Nottinghamshire CC by an interested person. The documents falling within the ambit of the request included a particular waste management contract which Veolia had entered into with the Council, along with invoices which Veolia had supplied to the Council under the contract. The Council decided that it was obliged to permit inspection of these documents under s. 15 ACA. Veolia challenged that decision by way of judicial review. Evidently, in mounting that challenge, Veolia was concerned that the information contained in the documents was commercially sensitive and should not therefore be permitted to enter the public domain under s. 15. Veolia’s case before the High Court was advanced principally on the basis that inspection should not be permitted under s. 15 as the contract and the invoices did not ‘relate to’ the local authority’s accounts. This argument was firmly rejected by Cranston J. He held that the words ‘relating to’ were sufficiently flexible that they could accommodate the documents in issue.

In reaching this conclusion, Cranson J evidently had in mind that the function of s. 15 is to enable interested persons to inspect documents which reveal precisely how the local authority is spending public monies. He concluded, in effect, that such a function would be frustrated if such persons could not consider the various contracts and invoices under which the local authority made payments to third parties.

It is apparent from the judgment in Veolia, that considerations relating to commercial sensitivity and confidentiality will not be relevant to the decision as to whether documents may be inspected under s. 15. This very generous approach to accessing commercial information under the ACA is to be contrasted with the more restrictive approach adopted under FOIA and the Environmental Information Regulations 2004 (see further the specific exemptions afforded under those enactments in respect of confidential and commercial information; and see also South Gloucestershire Council v Information Commissioner (EA/2009/0032) for a recent example of how these exemptions apply in practice – see further the post on this case). Veolia’s application for permission to appeal against Cranston J’s judgment is currently being considered by the Court of Appeal.

11KBW’s Michael Supperstone QC, Tim Pitt-Payne and Peter Oldham all appeared in the case.