Local authorities have been ordered to release details of money paid to brokers by investment managers on behalf of council employees’ pension funds. In what he called ‘a landmark ruling’ the Information Commissioner, Richard Thomas, decided there was a strong public interest in releasing the information.
He has now issued 36 decision notices, covering 32 local authorities, for disclosure of commission payments under the Freedom of Information Act. The list includes 19 English and Welsh County Councils and nine London Boroughs. Four authorities – the London Borough of Bexley, Cheshire, Surrey and West Sussex County Councils – released the details required before being served with the notices.
The ruling arises from a request made to Tameside Metropolitan Borough for Investment Managers Association disclosure tables, which give a breakdown of the commission payments made by investment managers on behalf of the Greater Manchester Pension Fund. The payments are taken directly from the pension fund.
The council initially refused to reveal the information and cited two exemptions under the Freedom of Information Act – confidentiality agreements and commercial sensitivity. The Commissioner, however, decided that the public interest in disclosing the information was greater than that served by maintaining the exemptions.
Mr. Thomas has ruled that the most important public interest argument for disclosing information about the payments centres on the need for public bodies to be transparent in their decision making when they invest public money. He believed there were strong reasons for the public to be able to scrutinise the council’s commission payments. The ruling says, “He has not been convinced by the argument of the council that it is already as transparent as it ought to be as far as commission deductions are concerned. Nor is he convinced that the current statutory audits provide sufficient checks on the council’s actions in this respect to demonstrate to the public that it does properly scrutinise the levels of commission its investment managers pay to brokers. “
The Commissioner has, though, decided that the names of the brokers used by the authorities and the market areas named in some of the IMA tables can remain confidential as their release might prejudice commercial interests.