The UK government has made transparency a common theme of a number of its recent policy proposals. These changes are likely to have a material effect on companies operating in the UK public and government contracts sphere by, for example, increasing the disclosure burden.

Recent UK legislation such as the Modern Slavery Act has already begun to increase the transparency requirement within companies’ supply chains, and the UK government seems set on developing this policy theme.

On 12 May 2016, UK Prime Minister David Cameron hosted a landmark Anti-Corruption Summit (the “Summit”) that focused attention on transparency and compliance amongst global businesses. As the Open Contracting Partnership noted in its blog on the Summit, “public contracting is every government’s number one corruption risk because it’s where the money and the discretion in government are concentrated … about 60% of bribes investigated … were for government contracts”.

A number of measures have been introduced following the Summit—displaying the action that the government is planning to take to achieve its intentions. One example includes the introduction of the Open Book Contract Management scheme, as well as other developments arising out of the Summit itself.

UK Open Government National Action Plan (NAP) 2016-18

Timed to coincide with the Summit, on 12 May 2016 the UK government announced that public contracts awarded in the UK will soon be visible to the public from start to finish. It announced the implementation of the NAP, which sets out 13 commitments on transparency, anti-corruption and open government. The NAP also sets out how the UK government plans to make information clearer, easier to interpret and easier to use.

The 13 commitments include:

  1. The UK will establish a public register of company beneficial ownership information for foreign companies that already own or buy property in the UK, or that bid on UK central government contracts. Essentially, this means that, from 6 April 2016, all UK companies are required to hold a register of People with Significant Control (PSC) and, from 30 June 2016, UK companies will start providing PSC information to the Companies House public register. Non-UK companies will not be able to buy UK property, or bid for central government contracts, without joining this public register. This rule will also apply to non-UK domiciled or registered companies that already own property in the UK.
  2. The government plans to publish a new Anti-Corruption Strategy by the end of November 2016, with the aim to publish progress against actions within the strategy by January 2018. By June 2018, the aim is to introduce a mechanism allowing greater Parliamentary scrutiny of anti-corruption work.
  3. The UK will establish an Anti-Corruption Innovation Hub with Mexico, France, Ghana, Georgia, Switzerland, Afghanistan, UAE, Indonesia and Norway. The hub will involve social innovators, technology experts and data scientists on the one hand, and law enforcement, business and civil society on the other—and is intended to enable sharing of best practices and innovative techniques in tackling corruption. The government intends to showcase examples at the 2016 OGP Summit in Paris in December 2016, with the Innovation Hub being operational by May 2017.
  4. The UK will implement the Open Contracting Data Standard (OCDS) across the Crown Commercial Service’s operations by October 2016, starting with High Speed Two (“HS2”, a high-profile, high-speed rail link under construction in the UK) and rolling out across government thereafter. The OCDS enables disclosure of data and documents at all stages of the contracting process by defining a common data model. It was created to support organisations by increasing contract transparency, and allowing deeper analysis of contract data by a wide range of users. The OCDS is intended to ensure that the whole process of awarding public sector contracts, from bidding to building, will be visible to the public.

According to the UK government’s announcement, this policy has received wide-ranging support and at least nine countries, including Mexico, France, the U.S., and Argentina will apply the OCDS to specific major projects.

  1. Other announced measures include a variety of steps aimed at data—e.g., developing a common data standard for reporting election results, making government data easier to find and more secure, involving data users and making better use of data assets and collecting more granular data on grant making; enhancing company disclosure of payments made to government for the sale of natural resources such as oil, gas and minerals; and review of the GOV.UK website.

Impact?

Some of the measures introduced by the UK government are likely to further increase the disclosure burden on companies—for example, the beneficial ownership disclosure requirement for foreign companies. Other measures may, if successful, be of benefit to companies doing business in the UK or with the UK government, such as reducing anti-corruption via the Anti-Corruption Strategy and Innovation Hub, and increasing contract transparency via the OCDS.

However, it remains to be seen exactly how the OCDS will operate in practice. Firstly, a large number of countries have signed up, but from all corners of the globe. Will the standard really be common in the UK as compared to Mexico and Argentina? Furthermore, as HS2 (the first “real-life” example) is likely to take at least another ten years or so to complete, it may be some time before “bidding to building” is reviewed from beginning to end.