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The rules governing
the public's rights to view and copy local authority files
are profiled in this section.
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August 2009: The
Veolia legal challenge to Nottinghamshire County Council (2009)
 | Nottinghamshire
CC was constrained under a temporary injunction obtained by Veolia ES (Nottinghamshire)
Ltd not to disclose parts of a contract and parts of invoices relating to a waste
incinerator PFI project, to a local taxpayer and Friends of the Earth campaigner
Mr Shlomo Dowen (left). |
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judicial review hearing took place at the High Court on 25-26 August 2009 before
Mr Justice Cranston. |
Mr
Philip Coppel QC, for Veolia (claimant)
Veolia
submitted that the public's rights to inspect the accounts is limited to material
which is presented to and signed off by the external auditor and then by the council,
which is the annual 'statement of accounts'.
The claimant also argued
that electors and taxpayers do not have a statutory right to inspect any contract
or invoice which is not identified in the 'statement of accounts'. The company
also submitted that the taxpayer has no legal right to 'gainsay'
or 'duplicate' the work of the auditor.
Veolia also submitted that electors
and taxpayers have no legal right to inspect any contract or invoice which is
subject to day-to-day internal audit, because that material is not supplied to
the external auditor or to the council to be signed off as part of the annual
audit process.
Mr Coppel said: "What one can't find is anything to
suggest that there is anything beyond the statement
of accounts, or rather the accounts in the statement
of accounts, that constitute the accounts to be audited."
The company
argued that it was absurd to suggest that Parliament had given local taxpayers
a right to seek judicial review on any item of expenditure - such as whether a
single, 'miniscule' £2.00 payment had been spent outside the terms of an
approved contract.
The
claimant also submitted that the court had to carry out a balancing exercise in
relation to Mr Dowen's inspection rights, in order to protect the commercially
sensitive and confidential information contained in its contract and invoices
with Notts CC.
Veolia argued that it had developed a 'sophisticated' and
competitive formula for contract and tender fees
and charges, and that the company's financial
interests would be damaged if its sub-contractors and rival firms obtained the
figures. |
Mr
Michael Supperstone QC, for Nottinghamshire CC (defendant)
The
council submitted that Veolia's assertion - that contracts and invoices are open
to public inspection only if there is a reference to the cost in the annual 'statement
of accounts' - was 'arbitrary' and defied 'common
sense'.
The defendant argued that Veolia's
approach failed to resolve the issue that it had raised about confidentiality,
since under its regime any disclosure of invoices and contracts would depend on
what appeared in the annual statement.
Mr Oldham said: "The claimant's
narrow interpretation would considerably limit the scope of the local
government elector to enquire and object to the
accounts, in such a way as to become unworkable."
The council argued
that it would be 'untenable' if records and invoices relating to a £200m
contract were open
to inspection, but those of a £500m contract were not, purely by token of
whether an entry appeared in a statement in any particular year.
The defendant
submitted that the Veolia contract and the monthly invoices were part of the council's
accounts, regardless of whether they were itemised in the annual statement of
accounts.
The council argued that it would never be possible to include
references to all of the material making up the accounts in the annual statement,
because the volume of material which is open to public
inspection is so vast. |
Mr
Timothy Pitt-Payne QC, for Mr Dowen (1st interested party)
The
1st IP accepted that Parliament had not sought to protect commercially confidential
information in the statute, as it had with similar legislation such as the Freedom
of Information Act and the Environmental Information Regulations.
Counsel
submitted that this was deliberate, and not a statutory omission. Parliament
had revised the law as recently as 2007, to provide for non-disclosure of personal
information in the accounts under public inspection.
The 1st IP argued
that the HTV West case (link here) established a local
elector's rights to inspect and make copies of the contract and invoices, without
having to satisfy any legal requirement concerning motives.
Counsel submitted
that taxpayers were then free to use the information - as in the HTV case where
information was sought for a documentary
- providing that no other law was broken.
Mr Pitt-Payne said: "It
is clear that the council has paid money to Veolia and has received money, and
that is sufficient to say that the disputed documents
(the contract and the monthly invoices) relate to the accounts."
Counsel
submitted that local taxpayers fulfill an important role during the public inspection
period, whereby they may identify potentially fraudulent
payments. The law does not restrict them from raising matters with the auditor,
or with local government officials, or elected members, or other taxpayers. |
Mr
Peter Oldham, for the Audit Commission (2nd interested
party)
The Commission submitted that Veolia's
case was seriously flawed by a 'wholesale misrepresentation'
of taxpayers' rights to view the accounts, statement of accounts and the accounting
records.
The 2nd IP argued that the legislation gives electors and taxpayers
a 'powerful' right to seek out documents during the inspection period, and that
those rights were not limited or conditional on raising questions or objections
with the external auditor.
The Commission submitted that the 'accounts'
referred to in the legislation were a 'running record' of day-to-day transactions.
Mr
Oldham said: "The purpose of allowing interested persons to inspect the books
is to provide some measure of local accountability,
and to fill any gaps which may have arisen because the auditor has not delved
into an issue."
The 2nd IP accepted that there is no formal definition
of the term 'accounts' as it appears in the statute but argued that a 'common
sense' approach to the regulations indicates
that Parliament intended the phrase to include all of the accounting records and
all of the materials that go to make up the records.
The Commission submitted
that explains why the statute specifies that all books, deeds, contracts, vouchers,
bills and receipts 'relating to' the accounts must be made available for inspection,
and why the statute allows an elector to object to an 'item' in the accounts.
The
2nd IP argued that also explains why the regulations specify that the public notices
of the inspection rights are worded in a similar fashion. |
Judgment
was issued on 1 October 2009.
Link to the High Court decision here
For guidance, contact Orchard News Bureau Ltd.
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London &
Regional Updates
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The 2010-2011 accounts
of major local authorities were open to public inspection
last summer. For additional information relating to unitary,
metropolitan and shire counties etc. (copies of relevant
notices and links to relevant websites), check the links
below Information on the 2011-2012 accounts will be posted
soon.
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