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Case Number: 160313

Whether the Council was justified in refusing to release details (including the names of payees in some instances) of payments made by the Council to accommodation companies, hotels, hostels or B&Bs to house homeless people from 2010 to 2016

Conducted in accordance with section 22(2) of the FOI Act by the Information Commissioner (the Commissioner)

Note: This decision was appealed to the High Court in May 2017

Background

On 9 June 2016 the applicant sought access to records containing a breakdown of amounts paid by the Council to accommodation companies, hotels, hostels or B&Bs to house homeless people from 2010 to 2016. He indicated that he was not seeking the names of the payees where the amount paid was less than €30,000 in any given year. He also sought the total cost of such accommodation in each year. The Council part granted his request by releasing a table containing annual figures for payments made to a) hotels and b) private emergency accommodation (PEA) for 2010-2015. It relied on section 36 of the FOI Act (commercially sensitive information) to refuse to grant the request in full.

On 30 June 2016, the applicant made an internal review request. The Council affirmed its original decision. The applicant made an application to my Office for a review of the Council's decision on 27 July 2016.

I note that Ms Sandra Murdiff, Investigator, invited the Council to make a submission justifying its decision to part grant the applicant's request. Ms Murdiff drew the Council's attention to my decision in Case No. 160047 Dara Bradley, Connacht Tribune Group and Galway City Council (available on my Office's website www.oic.ie) where I found that the public interest favoured the release of similar records. The Council indicated that it had reviewed that decision and its position remained unchanged. I also note that during this review, Ms Murdiff contacted the Council and asked if it would be willing to release details of individual payments under €30,000 per year to the applicant, without payee names. The Council indicated that those figures had been included in the total figures supplied to the applicant but did not comment further. Accordingly, I have decided to bring this review to a close by way of a formal binding decision.

In conducting this review, I have had regard to the Council's decision on the matter, the Council's communications with the applicant and with my Office, the applicant's communications with the Council and with my Office and the content of the withheld records, provided to my Office by the Council for the purposes of this review. I have also considered the views of the third party companies whose interests would potentially be affected by the release of the payments information, as submitted to my Office during the course of this review.

Scope of Review

This review is solely concerned with whether the Council was justified in its decision to refuse to release details of the amounts paid to various accommodation providers to house homeless people from 2010-2016, including the names of the payees where the amount is more than €30,000 in any given year, on the basis of section 36 of the FOI Act.

During this review, one company argued that it should not be included in the records at issue. It stated that it had purchased a building with the Council as a sitting tenant. It contended that the Council provided accommodation to homeless people at the location, not the company concerned. The Council confirmed that it made rent payments to the company and stated that a homeless charity ran the accommodation as a homeless hostel on the Council's behalf. The Council was of the view that these rent payments did not come within the scope of the applicant's request for payments made to "accommodation companies, hotels, hostels or B&Bs" to house homeless people. Essentially, it stated that these payments had been included in error in the records provided to my Office. In the particular circumstances of this case, I am willing to accept that the payments made to the company concerned do not come within the scope of the applicant's request.

Preliminary Matters

It is important to note that section 22(12)(b) of the FOI Act provides that there is a presumption that the refusal is not justified unless the public body "shows to the satisfaction of the Commissioner that the decision was justified". Therefore, in this case, the onus is on the Council to satisfy me that its decision is justified.

I would also draw the Council's attention to its obligations under section 13 of the FOI Act to provide reasoned decisions. The Council did not justify or explain its original decision or internal review decision or engage in the public interest balancing test required under the exemptions which it cited in both decisions. In both cases, it merely quoted the relevant section of the Act. In this regard, I encourage decision makers to use the FOI resources available, including guidance on the FOI Act published by the Central Policy Unit of the Department of Public Expenditure and Reform and by my Office, to assist them in their decision-making.

Analysis and Findings

The records at issue in this case are spreadsheets containing the name of the accommodation provider and the amount paid to each for the relevant timeframe (January 2010 - June 2016). Separate tables are provided for each of three categories: PEA (which is described as 24 hour private emergency accommodation), Low Value Purchase Card (described as hotels booked on credit card) and Accounts Payable Suppliers - i.e. Hotels, B&Bs and Landlords. The Council stated that due to the large volume of transactions on the general ledger, the figures for PEA payments may include some rent payments. The information released to the applicant was a separate table containing total yearly figures only and did not include the names of any individual accommodation providers.

Section 30
In the course of this review, a third party suggested that the Council could have possibly relied on section 30(1) of the FOI Act in its refusal to release the information at issue. However, section 30, which provides for the exemption of records relating to the functions and negotiations of FOI bodies, is a discretionary exemption, which was not relied upon by the Council.

Breach of Privacy
A number of third parties argued that identifying properties as housing homeless people would lead to the people staying there being identified as homeless and breaching their right to privacy. One provider argued that release of their hotel name would essentially mean the release of his guests' address, which he argued would come under the definition of personal information as set out in the Act. However, based on the submissions received, only one proprietor has stated that he solely provides accommodation to homeless people. The rest of the properties, as I understand it, accommodate a mix of the homeless and private guests. Accordingly, I am not convinced that release of the records concerned would result in the release of personal information relating to identifiable individuals or lead to a breach of privacy.

Confidential Information
Some of the accommodation providers argued that the information concerned had been provided in confidence and referred to "privacy of contract". However, as noted above, other providers state that no contract existed or that at best a verbal contract was in place. Furthermore, the Council has not argued that any such contracts or confidentiality clauses are in place in its dealings with the companies in question. In any event, I am of the view that there would not necessarily be an expectation of privacy where a commercial company is providing services in exchange for public funds. In fact, one provider acknowledged just that and was of the view that any transaction concerning the expenditure of public funds should be open and transparent.

Section 36
Section 36(1) - Commercially Sensitive Information

36(1)(b)
The Council relied on sections 36(1)(b) and (c) in its decision to refuse to release the records in this case. Section 36(1)(b) provides that:

"Subject to subsection (2), a head shall refuse to grant an FOI request if the record concerned contains -

...(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation."

The Council did not offer an explanation in its original decision or internal review decision as to the reasons it had invoked section 36. However, in response to Ms Murdiff's letter drawing its attention to my decision in Case 160047 the Council made a submission to my Office setting out some details of responses it had received from third parties during a consultation process carried out in response to a similar request for access to records. These echoed the submissions received from the third parties in this case, which I shall consider below.

In relation to section 36(1)(b) the Council argued that release could damage the negotiating position of the Council with private landlords and result in further costs to the Council. It also stated that the difficulty involved with sourcing emergency homeless accommodation had been at a critical level for some time.

A number of third parties listed in the records made submissions to my Office during the course of this review. The companies concerned comprise a range of accommodation providers from self-service apartments to B&Bs, guesthouses and 2, 3 and 4 star hotels. Their views and perspectives differed widely. While a number of accommodation providers made specific arguments relating to their own particular circumstances, most contended that the information sought is commercially sensitive. I set out their main arguments below.

Material Financial Loss
Many of the companies involved stressed the importance of their businesses' online profiles to their continued trading and were of the view that their identification as a provider of homeless accommodation would negatively affect them. They contended that release of the information could reasonably be expected to cause material financial loss. In this regard, they referred to a number of outcomes which they argued could be reasonably expected if the information sought was released, including on-site protests or negative effects on the resale value of their properties. One provider argued that there was a reasonable expectation that other aspects of his business would face a downturn in trade if it became known that all of the guests in his premises were homeless people. Others expressed concern at what they saw as the likelihood of a fall off in business leading to a potential reduction in staff numbers or the ultimate closure of their properties.

In essence, they contended that, "rightly or wrongly", guest numbers would fall and major contracts, as well as functions and weddings would be lost or withdrawn if their companies were identified as providing accommodation for homeless people. Some companies referred to specific feedback from customers to support this view.

Prejudice Competitive Position
Another provider argued that release would reveal how much the Council paid it for accommodation, which could be used by its competitors to their advantage in future tendering competitions. However, there is no evidence before me of a tender competition in regard to the services provided, and at least one other provider specifically stated that there was no tendering/procurement process involved. In fact, a number of third parties argued that they did not "tender for or seek this business" and that this sets them apart from companies entering a public tender competition and my Office's approach to the release of such records. In any event, I consider that the usefulness of information to a third party's competitors often relates to the level of detail contained in the records at issue. The records concerned in this case contain total amounts paid to providers per year and do not indicate how many people were accommodated or for how long, so I do not see how that level of information could reveal details which would necessarily lead to a competitive advantage.

The companies also argued that release of the information at issue could seriously prejudice their competitive position. They contended that other hotels, who were not identified as providing homeless accommodation, would use this to their advantage when competing with the providers concerned for business. One company in particular referred to a major contract it had with a large sporting organisation who had identified factors including the hotel's reputation as a "luxury hotel" with "a track record for attracting high end leisure and corporate business" as a reason for choosing that venue. It argued that it would be likely to lose this business to another hotel if the information at issue was released.

Expectation of Harm
I take the view that the test to be applied in this regard is not concerned with the question of probabilities or possibilities, but with whether the expectation of harm is reasonable. The only requirement which has to be met in the second part of section 36(1)(b) is that disclosure "could prejudice the competitive position" of the person concerned. The standard of proof necessary to meet this test is considerably lower than the standard required to meet the test of "could reasonably be expected to" in the first part of section 36(1)(b). Having regard to this and to the third parties' argument that there is a possibility that other accommodation providers who were not named in the records at issue could leverage this information in order to gain a competitive advantage, I am satisfied that section 36(1)(b) applies to the information in the records at issue.

As I have found that section 36(1)(b) applies to the records at issue, I do not need to consider any further exemptions claimed.

Section 36(2)
Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arises in this case.

Section 36(3) - Public Interest
Section 36(3) of the FOI Act requires me to consider whether, on balance, the public interest would be better served by granting than by refusing the request. In considering the public interest in cases of this kind, I must consider the interests of each party. Section 36(1) itself reflects the public interest in the protection of commercially sensitive information.

Arguments
The Council argued that the accommodation providers would withdraw their services if the information was released, which would lead to extreme difficulties for the Council in finding and securing emergency homeless accommodation. It argued that this was not in the public interest. A large number of the companies who replied to my Office's invitation to make submissions stated that they were likely to withdraw or to consider withdrawing their services if the information at issue was released and negative publicity ensued. I am prepared to accept that if this happened, it could significantly reduce the amount of emergency accommodation available to the Council.

Accommodation providers argued that the level of information sought was not necessary to achieve greater openness and inform scrutiny and was "not proportionate". They argued that any public interest in openness and accountability could be satisfied by disclosing some or all of the following: the overall amounts spent on emergency accommodation or the number of providers to whom money was paid, or the number of providers/hotels paid over certain amount(s).

In its submission the Council accepted that there is a public interest in openness and transparency with regard to expenditure of public money. It stated that this outweighed the public interest in people being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result. In essence, it contended that this was why it had released the total expenditure on emergency accommodation, which it says is also published online.

The applicant argued that the Council is spending millions on hotels for homeless people every year when this money would be better spent paying for social housing. He stated that he believed that the release of the names of the companies concerned "would help focus public attention on the homeless problem" and the use of public resources. He also contended that there was a public interest in showing how "vast sums of money" were being spent in this regard. He also argued that details of suppliers of accommodation to asylum seekers are made public and that they were "as vulnerable as homeless people". However, this case differs, in that the companies involved in direct provision have tendered for the business and operate under contract.

Case No. 160047 dealt with a similar request for records from a local authority relating to the provision of emergency accommodation for homeless people in Galway. Third parties were contacted by my Office in both that case and this case and invited to make submissions. No replies were received in Case No. 160047. Over 50 replies were received in this case, and all but one objected to the release of the information at issue.

Analysis

In my decision in the earlier case referred to above, I commented that I was entitled to assume that "if any of the businesses involved were truly concerned that their commercial interests would be undermined to a significant extent by the release of the information about payments to them by the Council, they would have expressed their views to my Office when invited to do so". It does not necessarily follow, however, that arguments made in this case about anticipated material losses, or submissions made objecting to release, would necessarily lead to a finding that, on balance, the public interest lies in refusing the request. It has been accepted by the Courts that the balancing exercise is one uniquely within my remit. I have, of course, carefully considered all of the submissions received. I have taken account of the interests claimed by both the Council and the third parties.

The Act recognises, both in its long title and in its individual provisions that there is a significant public interest in government being open and accountable. There is a strong public interest in revealing information that would shed light on whether the Council - the body charged with public housing provision in the Dublin City area - carried out its functions, including the procurement of accommodation, in a manner consistent with openness and accountability.

Section 11(3) of the FOI Act requires public bodies to have regard to the need to achieve greater openness in their activities and inform scrutiny, discussion, comment and review by the public of their activities. It provides that FOI bodies shall, in performing any function under the Act, have regard to a number of matters including the need to achieve greater openness in the activities of FOI bodies and to promote adherence by them to the principles of transparency in government and public affairs. I note here, that what is at issue is a public interest which equates with "a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law " as referred to by Macken J. in Rotunda Hospital v Information Commissioner [2011] IESC 26.

In my opinion, the openness required includes being open about the commercial entities with whom the State does business and to whom it pays taxpayers' monies, in order that it is accountable in relation to such activities. In this case, a significant amount of public funds (reported in the media based on figures released by the Dublin Regional Homeless Executive as being €38.9 million in 2016) are being spent to house individuals and families in hotels and various other accommodation.

In previous cases, my Office has distinguished between the public interest in disclosing information which relates purely to the financial business of the third party and information which relates to the activities of the FOI body, e.g. the exercise of its regulatory function. In this case, the records not only show the amount of money spent on emergency accommodation for homeless people but, they also demonstrate the number of properties and companies involved, giving an insight into the scale of the Council's task and the solutions it has pursued.

While the public interest has been served to some degree by releasing information about the total expenditure by the Council for the period concerned, I take the view that real transparency about value for money and efficiency on the Council's part would require access to information not only about total expenditure, but also the number and identities of the accommodation providers concerned and the amounts being paid to each of them. Such openness is a significant aid to ensuring effective oversight of public expenditure, in ensuring that the public obtains value for money and in preventing corruption, waste and misuse of public funds. However, I must weigh this against the effect that release of the company names could have on the level of accommodation available to the Council to house homeless people and on the commercial interests of the third parties. Having regard to all the circumstances, it seems to me that is primarily a business decision for the accommodation providers as to whether to provide or continue to provide the services to the Council. While the Council has not, apparently, conducted tendering or procurement processes, the fact is that taxpayers' money was paid to those providers in much the same way as it would have been if they had competed for and been successful in a tender process. As regards continuance of the service by the providers to which the 2010-2015 information in the records relates, I note that the Minister for Housing has publicly stated very recently that he is committed to the ending of the use of "commercial hotels" for emergency accommodation for families by mid July [2017], except in exceptional circumstances.

I recognise that there is a public interest in protecting the commercially sensitive information of third parties. I also accept that there is a legitimate public interest in persons being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result. I accept that there is a possibility that disclosure of the information could have some effect on the supply of accommodation to the Council to provide for the emergency needs of homeless people as well as on the commercial interests of the third parties. On balance, however, I consider that the public interest in refusing the request is outweighed by the public interest in the information in the records being disclosed due to the substantial public monies paid out.

Accordingly, I direct the Council to release the records at issue in full to the applicant, with the exception of (a) the rent payments referred to in the Scope of Review section above, and (b) the names of the payee where the payment is less than €30,000 in any given year.

Decision

Having carried out a review under section 22(2) of the FOI Act, I find that the Council is not justified in withholding access to the information sought, under section 36 of the FOI Act. I hereby annul the Council's decision and direct the release of the records containing the information sought by the applicant, with the exception of a) the rent payments referred to above, and b) the names of the payee where the payment is less than €30,000 in any given year.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

Peter Tyndall
Information Commissioner