Exploring the history of expansions of FOI to private operators for our report on Reforming FOI led to trying to understand the history of how Network Rail became subject to FOI and EIR. This blog post explores how in very niche circumstances, the highest information court is the Office for National Statistics.
Network Rail is a body that owns and manages the infrastructure of most of the railway network in Great Britain (England, Scotland and Wales). As such, it holds information of potential public interest, but its status under Freedom of Information (FOI) and the Environmental Information Regulations (EIR) has been contested. A 2006 ICO decision concluded that Network Rail was not a public authority for the purposes of FOI (FER0071801 /FER0087031), but was for the purposes of EIR. This decision was overturned by the Information Tribunal (EA/2006/0061 EA2006/0062) in 2007, who held it was not a public authority for the purposes of EIR either. These decisions are now mostly irrelevant as in 2015 Network Rail became unambiguously a public body subject to FOI and EIR, and was added under s.5 to the FOIA schedule. The complication is that this change was not a political decision, but was effectively decided by the Office of National Statistics.
When implementing the 2010 European System of Accounts (ESA10) in 2014, the Office of National Statistics (ONS) retroactively reclassified Network Rail as a “central government controlled, nonmarket body classified as part of the Central Government sector”, and as having been so since 2004. This did not result from any new understanding of facts, but ESA10 included several new tests of government ‘control’ of an organisation: the ‘degree of financing’ and the degree of ‘risk exposure’. Previous tests (appointment of officers, provisions of enabling instruments, contractual agreements) had not concluded that Network Rail was government controlled but these new tests changed that picture.
The ‘degree of financing’ test required the government to ‘fully or close to fully’ fund the body for it to count as government controlled, this was not the case with Network Rail. The second test of risk exposure is sensitive to the question of who holds debt for the organisation. In this case, ONS argued that the debt was guaranteed by the Department for Transport, and there was an effective statutory obligation for the government to step in if Network Rail was to collapse. This by ESA10 criteria made Network Rail government controlled and part of the public sector. The reclassification was announced in 2014, and the new framework agreement between Network Rail and the Department of Transport agreed that Network Rail should be subject to Freedom of Information (1.15). While the body was added under section 5 of the FOI Act (rare), this order is in other respects similar to the frequent amendments made under section 4 as it reflected a change in ‘the public sector’ rather than including non-public sector bodies fulfilling a public function under the Act.
Given accounting change means that retrospectively Network Rail should be seen as part of the government accounts in 2007, does this have any impact on the underlying logic of the Information Tribunal decision that it was not subject to EIR at this time? In this case, the Information Tribunal did consider the degree of government control through the same test of board appointment and public funding that the ONS similarly considered Network Rail to ‘pass’. It did not consider the question of where the debt is guaranteed, but this would have been a novel approach. This wider idea of government control might be useful in future questions of examining government ‘control’ of an organisation for EIR purposes. However, subsequent decisions by the Upper Tribunal have suggested a strict definition of control as meaning “no genuine autonomy”, creating a high bar for a control based argument. The debt test of control is an inversion of the typical control argument. The organisation may (like Network Rail) have fairly clear operational autonomy but the government does not have autonomy because it holds all of the risk and none of the decision-making power. This is a situation that the public accounts (and good governance rules) should seek to correct but may not meet the strict test of control.
This more general idea of independence from government was a supporting part of the Information Tribunal’s argument and not the key argument. The main difference between the Information Tribunal and ONS arguments is this question of what would happen if Network Rail did not exist. The Information Tribunal argue that the services provided were not necessarily a public function, as “[i]f [National Rail Limited] did not perform these functions, they would be performed by some other similar body, not by central government”. In contrast, the ONS’ position was that the Department of Transport was on the hook both on the debt guarantee and through the Railways Act 2005 maintaining an older responsibility to “protect the interests of users of railway services”. This is interpreted by ONS as implying the government would need to keep the railways operating as “that government could allow Network Rail Ltd to fail while stepping in to support and protect the wider rail industry seems questionable, given that no one else is bearing any significant financial risks in relation to Network Rail”. The evaluation of who holds the financial risk questions the Information Tribunal’s premise that another similar body rather than central government would perform the functions of Network Rail. As Network Rail’s functions were only possible as a result of substantial arm’s length support from the central government, the same would be true for any replacement organisation and so the central government is not a disinterested party. This undermines the argument about lack of control, but it was just one supporting argument. It is unclear if the approach would have led to a different decision, but it seems unlikely.
In the niche situation that government control is a result of risk exposure, the Network Rail case shows the Information Tribunal and Upper Tribunal are not the only possible avenue. A large and significant organisation that was judged to not be subject to FOI and EIR is now retrospectively understood to have been part of the government accounts throughout the whole period. Accountancy arguments of control may or may not convince the courts, but they only need to convince the accountants.
- 1: Document 2.1 in this FOI
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