The current debate on transparency of senior politicians' tax returns is gaining momentum. It is perhaps inevitable that the UK follow the practice in the US and many other countries whereby tax returns of those seeking or holding elected public office are published. It is equally conceivable that some nations within the UK will get there ahead of others.
There is a useful debate to be had about the impact and implications of such openness. There is also an equally valuable debate to be had regarding whether to stop with tax returns or to require publication of wider information on the financial, property and asset holdings of politicians and indeed possibly their immediate partners and families. Whatever the outcome of this immediate debate, though, there does appear to be a thirst for greater public transparency across the public sphere.
One aspect of this whole debate and an especially fascinating 'clash' waiting to happen is between this momentum towards transparency and the increasing use of business and social sector providers for the delivery of publicly funded public services. Typically, contracted services have been shielded from the public spotlight by invoking a claim of "commercial confidentiality" by both public sector clients and providers. However, inexorably, this state of affairs has been eroded with more and more contractual and other detail entering the public domain.
In my opinion, much more can and should be done to open up all our public services to transparency irrespective of who provides them. In turn this would strengthen accountability. The Government's phrase "Open Public Services" should also mean "public services that are open".
A start would be to extend the Freedom of Information Act to all contracted public service providers and not just to the public sector as client and provider. This reform now called for by Margaret Hodge, MP, Chair of the Public Accounts Committee is long overdue. It should be accompanied by a duty on these providers to present information openly without due consideration to the interests of and pressures from their public sector clients.
A second action would be to allow the National Audit Office and other auditors, regulators and inspectors full access to information, data and personnel in non-public sector providers. Their current powers in this regard are limited.
A third action would be to require providers to give evidence to Parliamentary select committees and local government scrutiny committees without prejudice to their contracts, so as to avoid any perception of collusion between client and provider; and to ensure that clients can be properly held to account.
A fourth step would be to require all companies bidding for public service contracts to publish their tax policies, those of their parent companies and of their subsidiaries. Details of the tax payments in the UK and elsewhere should also be publicly available to ensure full transparency.
A further action would be to publish all public service contracts on-line and to publish verified and where appropriate independently audited performance data measuring outcomes against contract terms. Financial performance data should also be published in accessible forms and where there are contractual joint venture companies, profit share arrangements or profit ceilings, financial returns should be independently audited prior to publication.
Similarly any client action or interventions taken in respect of a contracted public service should be publicly reported provided that doing so does not jeopardise client-provider negotiations or prejudice future procurements.
In my view,these actions would go a long way to making public service contracting more transparent and accountable. They would also offer greater confidence to the public.
However, there is scope and, I believe, a need to go still further.
All providers of public services - whatever sector they are in - if they are using public money and/or making an impact on the wellbeing of individuals and communities should be transparent and publish details of their owners/shareholders and their business models - e.g. their expected rate of return on investments. The public has a right to know about the nature and ethos of companies and third sector bodies contracting with the public sector, so statistics on complaints, employee terms and workplace practices should be made available. This could include information on the ratio of the highest and lowest remuneration. The same information should be available for publicly managed services too.
In addition, there is a case too for publishing details such as the remuneration of senior personnel in provider organisations including any incentive arrangements that could influence public service delivery. The wider shareholding and business interests of board members, trustees and key decision makers should also be available to the public - this would extend what is to some extent already the case. Of course, exactly the same requirements should be placed on politicians (and are to a greater extent) and to public officials responsible for commissioning services and for those responsible for procuring, letting and managing contracts.
As Polly Toynbee argued in The Guardian (10.04.12) there is a strong case for publishing the tax returns of senior executives and directors from business and third sector providers. There will be difficult issues to be addressed in terms of family members and family trusts given the need to protect and respect individuals who themselves are not involved in the business. But we know that there are occasions when family members are involved in tax avoidance arrangements so this aspect of any reform has to be carefully examined. Any tax advice for this group paid for by their employers should also be published.
Greater transparency and greater accountability are concepts that few would challenge. However, it is important that their pursuit does not have unintended consequences. Any new arrangements should be designed and applied in ways that are not overly bureaucratic and expensive to administer, and should be proportionate to objectives underpinning them. They have to allow for innovation and not deter new entrants or smaller organisations from any sector contributing to public services. For example, there could be total contract value thresholds below which providers would be exempt from these requirements. Of course, above all any such arrangements would need to give the public confidence in the system and the use of their tax payer money. This won't be an easy process but is not one to duck.
Some providers and indeed some in the public sector will cry "foul" at only a few of the ideas in this article let alone the total package. They will say these will be unfair, too costly, force some providers out of the market and possibly the UK, and undermine the benefits of competitive public service markets.
My response is to say that if you wish to play cricket, you have to accept the LBW rule, and if you wish to take advantage of public service contracting you have to accept the rules of a democracy - transparency and accountability. And my message to the politicians promoting competition of supply in public services? You have a duty to ensure that the public can be confident that true public value is being secured.
The ideas in this article may not find universal support nor may they all be appropriate but I hope that they will stimulate a much needed debate about how we ensure that "Open Public Services" are themselves open and accountable.