Public Sector Information Policy: On the Right Track? Audrey Mandela Chair The Locus Association

Public Sector Information (PSI) matters The Locus Association was established to encourage the public sector to maintain a trading environment that is fair and equitable, in particular in relation to the licensing and re-use of public sector information “ Between 15% and 25% of commercial information products and services are based on information held by the public sector.” (Lord Falconer, former Secretary of State for Constitutional Affairs and Lord Chancellor) “ Government is a natural monopolist for most PSI.” (Treasury Spending Review) “ Geographic information is a key element in PSI.” (European Union study by PIRA) Over £500 million of lost value to the economy because of current arrangements. (OFT Commercial Use of Public Information Market Study)

The Locus Association was established to encourage the public sector to maintain a trading environment that is fair and equitable, in particular in relation to the licensing and re-use of public sector information

“ Between 15% and 25% of commercial information products and services are based on information held by the public sector.” (Lord Falconer, former Secretary of State for Constitutional Affairs and Lord Chancellor)

“ Government is a natural monopolist for most PSI.” (Treasury Spending Review)

“ Geographic information is a key element in PSI.” (European Union study by PIRA)

Over £500 million of lost value to the economy because of current arrangements. (OFT Commercial Use of Public Information Market Study)

The current position on PSI trading is not optimal….. for business or for government Locus does not believe PSI should necessarily be free Key PSI Holders focus on exploitation, not maximization of re-use Public task is poorly defined Commercial conflicts of interest are endemic Legal, sales and marketing overheads Investment to challenge existing private sector products Restrictive licensing Inhibits Government operations Impedes modernization – unsuited for Internet use Limits transformation and sharing services Disadvantages citizens – lack of choice Strong disincentive to private sector investment, enterprise and innovation

Locus does not believe PSI should necessarily be free

Key PSI Holders focus on exploitation, not maximization of re-use

Public task is poorly defined

Commercial conflicts of interest are endemic

Legal, sales and marketing overheads

Investment to challenge existing private sector products

Restrictive licensing

Inhibits Government operations

Impedes modernization – unsuited for Internet use

Limits transformation and sharing services

Disadvantages citizens – lack of choice

Strong disincentive to private sector investment, enterprise and innovation

What is actually happening? Operational Efficiency Review consequences Defending PSI appears to PSI Holders to be in the national interest New public guidelines are vague and come from a variety of (sometimes conflicting) independent reports: - CUPI Study (OFT) - Power of Information Study and Taskforce - Cambridge Study Private acceptance that PSI Holders must “sweat the assets” Barriers have stopped coming down

New public guidelines are vague and come from a variety of (sometimes conflicting) independent reports:

- CUPI Study (OFT)

- Power of Information Study and Taskforce

- Cambridge Study

Government is the main user of PSI but there is a high cost of non-statutory data Limitations of use, for example on Internet Unnecessary gold-plating of data quality Questionable efficiency vis a vis the private sector Lack of choice because monopoly providers Tortuous licensing Complex negotiations

Private sector blocked from innovation Limitations of use, especially on Internet Opaque accounting, cross-subsidization Competitive threat (and now reality) Unfair behaviour and terms Inadequate regulatory framework

The playing-field is not level Office of Public Sector Information (OPSI) has no real regulatory power OPSI obliged to support government policy – not all stakeholders PSI Holders have substantial resource to defend their business models. [ OPSI’s entire annual budget is less than OS spends on lawyers alone] “ Information Fair Trader Scheme” is an “agreement” designed to encourage best practice – not to enforce it. Not open to Judicial Review OPSI’s only sanctions are too nuclear The PSI Regulations exclude vital PSI and need tightening The National Audit Office remit is too high-level The Office of Fair Trading can only “investigate” 1 in 30 complaints Stimulating PSI re-use requires all barriers to be removed

Office of Public Sector Information (OPSI) has no real regulatory power

OPSI obliged to support government policy – not all stakeholders

PSI Holders have substantial resource to defend their business models. [ OPSI’s entire annual budget is less than OS spends on lawyers alone]

“ Information Fair Trader Scheme” is an “agreement” designed to encourage best practice – not to enforce it. Not open to Judicial Review

OPSI’s only sanctions are too nuclear

The PSI Regulations exclude vital PSI and need tightening

The National Audit Office remit is too high-level

The Office of Fair Trading can only “investigate” 1 in 30 complaints

Stimulating PSI re-use requires all barriers to be removed

The Cambridge Study Socially optimal policy would involve moving to marginal cost charging for a subset of products Having proper governance/regulatory regime in place is central to realising benefits of change: Public Task currently poorly defined Trading Funds have no incentive to minimise cost but only to match cost to revenues Trading funds can currently always raise prices and increase revenues to meet costs Leads to gold-plating of products and over-investment A change in charging regime should not have an impact on data quality or efficiency Shareholder Executive advising Trading Funds but the Shareholder Executive only represents interests of some stakeholders

Socially optimal policy would involve moving to marginal cost charging for a subset of products

Having proper governance/regulatory regime in place is central to realising benefits of change:

Public Task currently poorly defined

Trading Funds have no incentive to minimise cost but only to match cost to revenues

Trading funds can currently always raise prices and increase revenues to meet costs

Leads to gold-plating of products and over-investment

A change in charging regime should not have an impact on data quality or efficiency

Shareholder Executive advising Trading Funds but the Shareholder Executive only represents interests of some stakeholders

At present the UK government does not have a viable policy Gives away some data Sells some data “ Public Task” boundaries are blurred Aggregation of “Product” costs permitted Cross-subsidisation condoned Unrefined and refined data costs merged Lack of clear and effective regulation tolerated

Gives away some data

Sells some data

“ Public Task” boundaries are blurred

Aggregation of “Product” costs permitted

Cross-subsidisation condoned

Unrefined and refined data costs merged

Lack of clear and effective regulation tolerated

Government must decide…. a) If it continues commercial activities How to separate clearly and fairly, commercial activities from those of its data collection activities b) If it retrenches and focuses purely on data collection activities Whether to provide them free or At real cost (plus margin) for each data collection activity

a) If it continues commercial activities

How to separate clearly and fairly, commercial activities from those of its data collection activities

b) If it retrenches and focuses purely on data collection activities

Whether to provide them free or

At real cost (plus margin) for each data collection activity

What is needed? Decisions about what government should be doing in this space Information about what PSI is available Clarity about use conditions A level competitive playing-field. Some Trading Funds are almost certainly acting anti-competitively. Privatisation is thus impossible. A review process that is relatively swift, low cost, open, adequately independent and robust Transparent outcomes within a realistic timetable Certainty that decisions will be implemented promptly

Decisions about what government should be doing in this space

Information about what PSI is available

Clarity about use conditions

A level competitive playing-field. Some Trading Funds are almost certainly acting anti-competitively. Privatisation is thus impossible.

A review process that is relatively swift, low cost, open, adequately independent and robust

Transparent outcomes within a realistic timetable

Certainty that decisions will be implemented promptly

THE LOCUS ASSOCIATION PO Box 54826 London SW1Y 4XX Tel: 020 7930 9788 Fax: 020 7976 1680 Email: harriet@quintuspa.com Web: www.locusassociation.co.uk