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Capital Of Confidentiality??

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Capital of Confidentiality to keep cash deals secret PDF Print E-mail
Published on May 11 2006
by Paul Unger
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Liverpool's waterfront
Liverpool's waterfront
LIVERPOOL Culture Company, the organisation in charge of European Capital of Culture celebrations, has rejected claims it is publicly unnaccountable despite refusing to allow access to financial information.

The organisation declined to confirm how much income is being received from private companies through sponsorship programmes.

Having won the signatures of eight official partners from the private sector, LCC has refused to disclose the amounts each is paying and how receipts tally with the business plan.

The sums don’t add up.

In the business plan for 2005 - 2009 the organisation says 11 per cent of total income will come from commercial sources.

Of the £94.9m budget set for the four-year plan this produces a commercial income target of £10.4m.

Liverpool City Council will contribute 54 per cent and other grant sources 35 per cent.

However, in a separate “delivery plan” LCC states its ambition to sign up 12 official private partners each offering cash and in-kind payments worth £2m, or £24m in total.

Bolstered

This is already double the four-year target for private income and will be bolstered by tiers of “official supporters, suppliers and friends” worth more than £15m as a whole.

Ten official supporters will pay £1m each.

Another 10 official suppliers - Cains brewery is the only one so far - will sign deals worth £500,000 each in cash and stock. Friends will total around 40, each paying £20,008.

While LCC may have set itself deliberately cautious targets, it is not known what percentage of sponsorship packages are actually paid in cash despite the full liability for the programme resting with the public.

Chris Green, head of commercial at LCC, said it was against policy to comment on the detail of the sponsors’ packages.

He added: “We are not setting an upper limit on the amount raised by sponsorship. It could be more than the targeted £10m if we can generate it.”

Duty

Green denied the organisation was being too closed in its stance and said it had a duty to protect the confidentiality of clients. “If you look at what we have revealed in the delivery plan it is difficult to accuse us of not saying where the money is coming from and what we are paying for with it. If a sponsoring organisation wants to keep amounts [of money] confidential that’s their affair.

“We are also in talks with other potential sponsors and, considering each agreement is drawn up differently according to what the partner can offer, we would not want the detail of earlier deals becoming known in case it jeopardised negotiations.”

LCC aims to secure at least 50 per cent cash from each deal, Green said, although this could be reduced by a significant media offer.

Trinity Mirror NW, publisher of the Liverpool Daily Post and ECHO is believed to have paid 10 per cent in cash of its £2m package.

All the official partners so far declined to reveal details of their sponsorship deals.

Experts in information disclosure believe when a group is overwhelmingly funded by the public purse it should not withold operational information.

Public interest

Katherine Gundersen, spokeswoman for the Campaign for Freedom of Information, said: “It is obvious that when there is a large amount of public money in a company or organisation there is a strong public interest case for asking what that company is doing.”

LCC has come under repeated pressure to disclose more information on its operations following a string of complaints about appointment procedures for key executives and a lack of detail about events in 2008, the Capital of Culture year.

Conveniently, LCC is both a council department, covered by the FoI, and a private company limited by guarantee and exempt from FoI.

In a statement LCC said: “The Liverpool Culture Company is a department of Liverpool City Council, unique for having an independent board and specifically created to deliver the Capital of Culture programme in 2008.

“All major decisions go before the city council's executive board, whose minutes are available publicly, as are the Culture Select Committee's and Scrutiny Committees. Requests for information about the personnel and finances of the Culture Company board can be addressed to Companies House.”

Exempt

However, as a private company limited by guarantee with no shareholders, LCC is exempt from reporting its financial accounts to Companies House.

The LCC statement continued: “The majority of our activity comes under the local authority remit, so FoI requests are dealt with as usual. We would not make contracts with partners available as these contain commercially sensitive data, so they are exempt under the FoI, and are not publicly available at any point.”

The Enquirer has now made requests under the FoI to the LCC and its public partners to see the contracts and all board minutes, committee meeting minutes and reports relating to the commercial income of the organisation.

Gundersen added: “Contracts awarded by public bodies have been seen a lot more since the public sector came up against FoI.

“There are tough tests in place in the act relating to the release of commercial information. Firstly it has to prejudice the commercial interests of any person to be withheld. Secondly, a public interest test can be applied. This will test whether the public interest in disclosing information outweighs the commercial prejudice. So it is not as simple as applying a blanket exemption and saying ‘that is that’.”

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