Dear Sandwell Metropolitan Borough Council,

1. Please disclose ALL legal documents relating to the so-called “Concordat” between Sandwell MBC and Sandwell College (and others) relating to The Public, West Bromwich. I make this request on the basis that both the principal parties are public bodies funded by the taxpayer, locally and nationally, and that the contract for the conversion works has been given to a third party without tender or other competition.

If you refuse this request please state your reasons and then go on to answer question 2 below.

2. (Only to be answered if Question 1 above has NOT been dealt with).
Please state:

(a) The full names of ALL parties to the “Concordat”;

(b) The date the “Concordat” was signed;

(c) The main terms of the “BSF Design & Build” contract and/or any other contract(s) relating to the conversion of The Public including specifically but not exclusively, the overall cost of all relevant contracts;

(d) The “details of the repayment mechanism”, whatever that means, as set out in the “Concordat”. Insofar as this relates to SMBC and/or ANY party borrowing money to fund the conversion and any ancillary works state
(i) The lender(s);
(ii) The amounts borrowed;
(iii) The repayment terms including by whom the repayment is to be made and when.

(e) The principal terms of any lease between SMBC & Sandwell College and/or any other party in respect of future occupancy of The Public. This to specifically but not exclusively include:
(i) The length of the lease;
(ii) Details of any break clause or clauses in the lease;
(iii) The rental terms (including details of any mechanism to increase or decrease the rental);
(iv) Any specific terms relating to access to the building by members of the general public (as opposed to those entering on legitimate College business) including provision of access to the Changing Places lavatory on level 3.

(f) The provisions for the ongoing repair and structural maintenance of the building as set out in the said lease or otherwise. If the repair etc responsibilities lie solely with SMBC they will please state the amounts per annum budgeted for this purpose.

(g) The amount(s) of any sums to be paid by SMBC to Sandwell College and/or to any other party by way of public subsidy to specifically but not exclusively include arts funding and provision for incubator business services and state:

(i) The sums to be paid;
(ii) The period over which the payments are to be made;
(iii) The mechanism for determining that the said sums are spent in accordance with the agreement as set out in the “Concordat” or elsewhere.

(h) Whether the entirety of the conversion works are to be undertaken by Sandwell Futures Limited. If not, please specify:

(i) The identity of any other contractors appointed or proposed to be appointed;
(ii) The sums contractually agreed or proposed to be agreed to the said contractors
(iii) The payee(s) in respect of the said sums.

(i) Any other materially relevant terms of the “Concordat” and any related or ancillary contracts/agreements.

(j) Whether the legal work in respect of the “Concordat” and any related contracts/agreements were undertaken in-house or outsourced. If the latter, state the overall cost exclusive of VAT and the recipients of any fees.

Yours faithfully,

Darryl Magher

Dear Frank Caldwell,

It's a bit rich advising us of timescales and not keeping to them. Is it purely the so called complexity or is there any other reason for not releasing the information as requested. We do seem to have to wait some considerable time on many matters for Sandwell MBC to make what ought to be open, transparent and public in the first place. I would much prefer that you ensure the request is answered within the legal framework.

Yours sincerely,

Darryl Magher

Dear Frank Caldwell,

This request according to the legal timescales set out should have been fully responded to by 12th Feb. This is now considerably overdue. May I respectfully request that your full response be given without any further delay and an internal review be conducted and made public to properly determine why the legal timescales have not been complied with. Not only would this ensure that any issues that this request may have caused within your organisation are found and resolved, it would also ensure all future FOI requests are not tardy and comply with the legal timescales set out.

Yours sincerely,

Darryl Magher

To: (1) Adrian Scarrott, Director of Neighbourhoods, Sandwell Metropolitan Borough Council;
(2) Mr C. Davies, Vice-Principal (Standards & Information), Sandwell College.
Application for an Internal Review – Freedom of Information Act 2000
SMBC Ref: INT1-658301905
Sandwell College Ref: [email address]
I repeat my original request dated 15th January, 2014 in its entirety. The reply does not answer the request in any way and it has been so-heavily redacted so as to have been rendered entirely meaningless. I believe that I am entitled to have the original request answered fully in accordance with Freedom of Information Act 2000.
Background to the Request
In 2013 Sandwell Metropolitan Borough Council (SMBC) closed the public-owned facility in central West Bromwich known as “The Public”. SMBC is a local authority funded by the taxpayer, both locally and nationally. It is a matter of public interest that their financial dealings are open to public scrutiny save in exceptional circumstances or where the law specifically permits non-disclosure.
SMBC resolved to convert The Public for use primarily as a sixth form school/college and to grant a lease for the educational usage of the building to Sandwell College (SC). There are some ancillary agreements whereby SC are apparently to provide a level of artistic/cultural service to the general public, some adult education and so on.
Sandwell College (SC) is another public body reliant for the vast majority of its income from the taxpayer, mostly via central Government through the Education Funding Agency. It is a matter of public interest that the financial dealings of SC are open to public scrutiny save in exceptional circumstances or where the law specifically permits non-disclosure. It is noteworthy that only in September, 2012 SC took possession of a brand-new £77 million building, also in central West Bromwich, which was funded from the public purse. Ironically, the same contractors responsible for that new building are those that feature in these matters.
The Public was a landmark, bespoke, building designed by an internationally-renowned architect. Nevertheless, SMBC resolved to undertake major conversion works to the building (the “Fit Out Works”) so that it was “fit” for educational usage. This was specifically against the recommendation of reports from property consultants which cost £39,000 excluding VAT. In the normal course of events, one would expect SMBC to tender for the conversion works or open the project to some other form of open competition so that SMBC and the taxpayer could be satisfied that the final accepted quote constituted good value for (public) money but SMBC rejected this approach. Indeed, it resolved to gift the conversion contract to Sandwell Futures Limited (SFL) utilising the “standard form BSF (“Building Schools for the Future”) Design and Build contract” and specifically resolved on 16th October, 2013 “that any necessary exemptions be made to the Council’s Procurement and Contract Procedure Rules” to permit this transaction. SMBC were acting with considerable haste since the “Cabinet” only formally resolved to proceed in October, 2012 but had already (June, 2013) made public pronouncements that the college/school would be open by September, 2014. This may well have had a significant bearing on the decision to disallow open procurement and to enter into so-called “negotiations” with a single party.
Having excluded the world-at-large from the procurement process, I submit that it is particularly incumbent upon SMBC to show that the said contract was fair, reasonable and represented good value for the taxpayer and public (insofar as it is lawful at all).
Sandwell Futures Limited (SFL) has an opaque chain of control/ownership but SMBC itself owns 10% of the shareholding of the Company. The annual return of 17th June, 2013 shows a further 10% of the shares in the hands of Building Schools for the Future Investments LLP and the remaining 80% in the hands of Environments for Learning Sandwell PSP Limited. There are other companies related to this tangled web but the “ultimate parent company” is Interserve Plc and its subsidiary undertakings of which the aforementioned companies are two. The said annual return also shows that two taxpayer-paid employees of SMBC are Directors of SFL. One, at least, is very senior and highly paid from the public purse.
SMBC appears to state that open tender/competition was not necessary since SFL is a “special purpose vehicle procured as part of the Sandwell Building Schools for the Future Project” and that the BSF Design and Build contract was awarded in 2009 following appropriate & lawful procurement procedures. With respect, this is nonsense.
The current agreement in respect on the fit out works is a secret bipartite affair. The decision by the Cabinet to enter into it was based on a secret “strategic review”, part of a so-called “fundamental review”, which has not been placed in the public domain. The fundamental review and Cabinet decision itself are heavily redacted insofar as they have been disclosed.
The Building for Schools project commenced in 2003 and was always a tripartite affair. The Department of Education appointed a delivery agency called “Partnership for Schools” and the delivery vehicle was the “Local Education Partnership” (LEP). Whilst not an actual shareholder within the meaning of company law, the PFS was, itself, a stakeholder or partner of the LEP in the whole BSF scheme.
A local authority could opt into the scheme and present a “Strategic Business Case” to the PFS. This was followed by an “Outline Business Case” (OBC) which set out, inter alia, the scope of the project, costs, affordability, risks, the procurement route and a timetable. If approved a LEP was formed between the authority and a Private Sector Partner (PSP) which was identified after a tendering process in accordance with EU requirements.
In this particular case, I am prepared to accept that SMBC set up a LEP called Sandwell Futures Limited with a PSP - Interserve Plc and its subsidiaries as the major shareholders (as above) for the SPECIFIC purpose of delivering building and ancillary works pursuant to the BSF programme. I do not believe that the relevant contractual documentation for this has ever been placed in the public domain. Very importantly, the LEP once established was not limited to the first wave of projects but was expected to endure for the 10 or 15 years required to fulfil the whole local authority BSF programme. By a Strategic Partnership Agreement the LEP was granted exclusivity for the programme (but not for anything else).
(For the sake of brevity I will refer to Interserve Plc and its subsidiaries simply as “Interserve” save where the context demands otherwise).
In general, the BSF programme was delivered in “waves” in accordance with a “Funding Allocation Model”. After the first wave, an OBC was still required (save in respect of the formation of the already existing LEP which had by then already been appointed and acquired exclusivity). Once this further OBC approval had been given the authority and LEP did further work on the scope of the next wave to RIBA Stage E which was then forwarded to PFS as the “Final Business Case”. If approved by the PFS in conjunction with HM Treasury a promissory note was issued to fund the “wave”.
The OBC in particular was a significant milestone in that approval demonstrated that the project was robust and prepared for procurement but was not the end of the story. The PFS would then work closely with the authority and LEP through a two-stage process up to FBC where the LEP was required to show evidence of value for money. Costings were compared to the PFS benchmarking system before final approval.
This scheme was highly bureaucratic, costly and time-consuming (one of the stated reasons for its abandonment in 2010) and was “policed” by the PFS/Treasury. This did not suit SMBC in the current case where the “decision” was made and had, accordingly, to be carried through in haste. With a close review of costings, benchmarking etc the scheme was the very antithesis of the secret and private deal allegedly done here between SMBC and the LEP, Sandwell Futures Limited, alone. Further, as far as one can tell from press reports, there is no external funder (PFS/H M Treasury). Rather SMBC is funding the fit out works itself via what it calls “prudential borrowing” and will then lease the building to SC. There is no apparent mechanism to benchmark costings nor, indeed to check standards against the RIBA or other such schemes (although this may be contained within the redacted parts of the so-called contracts). It is not clear whether the lease to the College has been negotiated at less than an open-market rental for what is a very large building and/ or whether there is any mechanism for repayment by the College of any of the borrowing costs. It is in the public interest for the taxpayer and public at large to ascertain who is paying for what? For example only and without prejudice to all issues, the local taxpayers of Sandwell have a legitimate interest in determining that they alone are not shouldering the burden of the borrowing when the College funding should be spread to the whole country via central government taxation and funding. (Although it seems unlikely that central Government would have agreed to the College acquiring a second £70 million plus building so soon after it had moved into its own £77 million one).
In any event, future BSF schemes were stopped by the Secretary of State for Education in July, 2010 and so any concept of SFL having exclusivity in procurement terms is absurd. The alleged contracts are based on false premises and are a sham to avoid an open procurement process and to allow the project to proceed with all possible haste, regardless of the costs to the public purse. Accordingly, I will seek to persuade the Information Commissioner (“the IC”) that the contracts are unlawful and void. It follows, if the IC is with me on that point, that ANY and ALL clauses in the said “contracts” purporting to thwart disclosure of information pursuant to the FOA are also null and void and cannot protect any information that has been redacted on the grounds of either “commercial confidentiality” or “commercial sensitivity”. I shall rely on the statement of the Secretary of State for Education of 5th July, 2010 that all future BSF projects which had not reached financial close would not go ahead together with his further comments in letter form, “In particular, I do not wish to allow the creation of area-wide exclusivity agreements over many years with a single contractor”.
If the IC does not accept that point, it is in the public interest to see the terms of the contract and full costings so that an attempt can be made to benchmark those costs. There is clearly a very real risk that the taxpayer will not have received best value. As the situation is obviously not one in which BSF applies at all there is also the question of whether there is any conflict of interest in two taxpayer-funded employees (one, at least, highly paid) working for both parties to a secret bipartite transaction.
Further, the only information that has been forthcoming about the fit out costs has come purely from SMBC press releases which have suggested two quite different but significant sums of money ie £5.5M on one hand and £6.7M on the other. Once again, it is the public interest that full procurement and costing arrangements are available for scrutiny to clarify this apparent and considerable discrepancy. There is also the question of any mechanism for payment of extra sums in the event of the project “running over” or for any other reason.
As far as one can tell from the limited press reports and the heavily redacted information available through my original request there should be the following principal documents:
1. An agreement between SMBC & the so-called LEP;
2. An agreement between SMBC & SC plus a lease.
Although most of the shareholding of SFL is in the hands of Interserve it has specifically sub-contracted the fit out works to one of its own subsidiaries, Interserve Construction Ltd, and this has been disclosed in heavily redacted form as the “Design and Build Contract”. As above, this contract which also purports to have been made pursuant to the BSF, is no such thing and is a sham created purely for the convenience of the parties. I will submit to the IC that it too is unlawful so that any clauses therein designed to thwart the disclosure of information pursuant to the FOA can have no legal effect. Again, if the IC is not with me on that point then I will say that the public interest is not served where public money is manipulated through a company controlled by one party (Interserve Plc in this case) and paid to a subsidiary of the same company (Interserve Construction Ltd in this case). Accordingly, the IC should allow public disclosure of any information which is alleged to be either commercially confidential or commercially sensitive between two companies which are, in fact, two parts of the same organisation. It is noteworthy in this context that one of the contracts provides for notices relating to same to be sent to SFL via an Interserve address in Birmingham and for notices to the other contracting party (an Interserve subsidiary) to be sent via Interserve’s Head Office in Reading!
If the shareholding of 10% in SFL owned by SMBC has any bearing upon the matter then it is anathema that a public body – SMBC - should seek to use contractual clauses drawn up by its own lawyers to thwart the operation of the FOA and to attempt to use a small shareholding in a private company to subvert an open procurement process and award contracts to a single, favoured, party.
Response to the Disclosure to Date
May I deal firstly with the lease between SMBC and SC which appears to be of 25 years duration. It is said that the lease need not be disclosed as it will be registered at HM Land Registry in due course. I believe the lease was signed on or around 19th December, 2013 but as at 8th March, 2014 it has NOT been registered and so it is not in the public domain. As a matter of law, the lease may be considered an outright disposal of the property by SMBC and it is in the public interest to determine the true position. As above, it is in the public interest to determine that the lease terms accord with those available on the open market.
It is said that information as to personal data within the meaning of s40(2) should not be disclosed ie principally in respect of persons signing the documentation and also, as far as one can tell from the redacted information, names of persons appointed to a joint “strategic body”. I do not accept that where two public bodies are concerned – both funded by the taxpayer – that any secrecy is necessary as to appointments to joint boards etc and will ask the IC to order disclosure in the public interest. (I also specifically reserve my position noting the heavily redacted disclosure to date). I have no particular objection to the redaction of names of signatories etc unless any of the documents are signed by Sarah Melanie Dudley and/or Kerry Anne Bolister since these individuals are both employees of SMBC and Directors of SFL and it is in the public interest to determine that no conflict of interest has arisen in respect of their involvement in these matters. As Directors of a Company they must have a reasonable expectation that their identities will not be private in respect of these matters and disclosure would not be unfair to them.
It is said that some information is redacted pursuant to s21 FOA on the basis that it is available elsewhere. I have already dealt with the question of the lease which has not, as yet, been filed at HM Land Registry. Apart from a few press releases, I am not aware of any other information relating to these matters that has been placed in the public domain save that there is an argument from the College that the SMBC Cabinet decision of 16th October, 2013 and fundamental review are already in the public domain although they accept this is in heavily redacted form. (It seems that I will have to make a separate FOI request in that regard). I say for the purposes of this review that SMBC and SC should state publicly where such information may be located. Accordingly, at present, I do not accept redaction of information on this ground.
Section 22 FOA is also raised ie that certain information is to be released at a future date. I refer to my original request. The vast majority of the information requested was clearly in existence when the purported “contracts” were executed on 19th December, 2013, now some 3 months ago. I accept that it APPEARS that certain programme details are to be finally determined in respect of ancillary cultural/artistic/adult education “offerings” but these matters have, presumably, been budgeted for and those sums were what was originally requested. For both of these reasons I do not accept redaction of information pursuant to S22.
It is claimed by SMBC and SC in respect of the main bulk of the redacted information that it is either commercially confidential and/or commercially sensitive. Firstly, they rely on clauses within the various agreements themselves which are designed to protect such information and, secondly, they rely upon Sections 41, 42 and 43(a) FOIA.
I have already rehearsed the arguments above that the contracts are not what they purport to be. They are shams designed to avoid an open procurement process and to prevent the details thereof from entering the public domain. Again, if this view is not accepted, it is abhorrent that SMBC should seek to hide the facts of its transactions behind a 10% shareholding in a private company so that they are unavailable to public scrutiny. I have quoted above the precise wording whereby SMBC sought to restrict its “normal” contract and procurement procedures and so it is particularly incumbent on them to show that their dealings are open, fair and constitute good value for public money. As there is not, so far as I can tell, any mechanism for a third party (as in the BSF arrangements) to check or benchmark costs this information is of public interest so that full independent scrutiny can be made thereof. Where the “public interest test” applies, therefore, I say that the information must be disclosed.
Interserve are a very large public company with multi-national interests and although costing many millions of pounds of public money, in the general scheme of things this is a one-off, bespoke “contract” for them and a small-scale one to boot. It is, when all said and done just a conversion of an existing building to them and it is difficult to imagine what details thereof would constitute either “commercially sensitive” information or “trade secrets”. There is not, nor is there likely to be a comparable job in the area that one can foresee and so it seems unlikely that competitors (who have been deliberately excluded from this work) are likely to obtain any unfair competitive advantage from knowing the details of this unique transaction. Indeed, it is in the public interest that competitors DO see the details as they have been deliberately excluded from tendering since they are the persons/companies who may be best able to give an informed opinion on the “agreements”.
It is advanced that the disclosure of commercially sensitive information would mean that the “LEP”, ie SFL, would be likely to refrain from “bidding” for future public sector contracts which would lessen the competition available when public bodies are letting public contracts in the future. This again, is nonsense as rehearsed above. SFL was a single purpose delivery vehicle within the BSF scheme as is clearly stated by the parties themselves in the recitals to the various so-called contracts. It is a curious argument to advance noting that all competition was excluded so that ONLY SFL could bid for this particular project and it is difficult to imagine what contracts SFL would be bidding for as BSF has been cancelled.
As above, these contracts (unlike BSF) do not appear to be “policed” by any third party and so the three parties here have set themselves up as the sole arbiters of what is or what is not commercially confidential/sensitive. The contractual clauses, insofar as they are lawful at all, are too widely drawn for contracts (mostly drafted by their own lawyers) involving public money and two public bodies should not be allowed to determine between themselves what is commercially confidential/sensitive and therefore not disclosable. This is not in the public interest and it is, in law, inequitable.
It is also said that disclosure would impede future discussions and the viability of current proposals and future projects in particular the renovation of The Public and that disclosure would in some unspecified way affect the ability to secure “best value” in the future. As the so-called contracts were signed some three months ago and Interserve are in the building and gutting it, I do not understand these arguments nor, for the reasons outlined above, do I consider they apply on the facts of this highly-unusual and unique case.
Finally, it is said on behalf of the College that disclosure can be adequately dealt with by transparent College decision-making and reporting and accountability through regular monitoring. I am afraid this is nonsense again since ALL publicly available College Board and Audit minutes have been released with all references to The Public redacted. This, indeed, is now subject to a separate FOI request (from another member of the public).
Noting the substantial delay in dealing with my original request by both SMBC and SC, please conduct an internal review as a matter of urgency.

Yours sincerely,

Darryl Magher