The first question I need to answer is why I should take up the Minister's time so late at night on a subject that many would see as somewhat narrow. The answer is that a wider context of policy formation is involved that deserves wider currency. The Office of Fair Trading examined the issue of the reuse of public sector information earlier this year and that was followed by a valuable report, "The Power of Information", commissioned by the Cabinet Office. The Government have responded to both reports and, in addition, a review has been in progress of the future of trading funds, an issue to which I shall come later as it has a particular bearing on this subject matter.
Public sector information is gathered and held for a wide variety of purposes and is critical to both the direct provision of services and our understanding of many aspects of modern Britain. It also earns money in its own right. The OFT worked out in its study that it earned some £590 million in direct income, but the economic impact of public sector information can be calculated in various ways. The Ordnance Survey has done a study that estimates that it alone underpins revenues of some £100 billion a year in the provision of mapping data to a wide variety of businesses which then utilise that data for their own purposes to generate revenue. Those examples, from just one part of the Government information business, give some idea of the scale of what we are talking about.
If we consider the issue first on a strategic level, we see that as our society and public services grow more complex, more data are collected on the Government's behalf to manage that process and measure what we are attempting to achieve. Those data are increasingly stored in accessible formats. Instead of a lot of paper files of various kinds or the maps that people would recognise, digitised information is now commonly available across a wide range of Government activity. There are both more effective and ubiquitous tools that allow search, selection and compilation of information almost at will.
The longevity of our public data collection is almost unique, and that produces generally high-quality data compared with those held in many other countries, as well as data sets with long historical potential use. We have some of the most powerful brands in their field in the information world, such as the United Kingdom Hydrographic Office. In our long period of empire, our understanding of the sea bed and navigational matters was critical, and the office continues to be a world leader in its field. Ordnance Survey was originally set up to provide information so that we could defend the country against an invasion by Napoleon, but over time it spread its wings much further, providing maps of our country to a standard that is envied around the world. The Met Office has set extremely high standards in the provision of weather data, which are commonly used well outside our country. We have built on a legacy of global reach, stable long-term governance, the self-confidence of the Victorian age and the spirit of innovation that founded those bodies.
Increasing numbers of citizens seek information for themselves, and are prepared to compile it using their own resources; I have referred to the increasing availability of the tool sets that allow them to do that. Our relatively free communications marketplace has provided diverse channels for the distribution of the information. Other than any cost of the data, the entry barriers to an information business are now extremely low, promoting high levels of competition and innovation. Web technologies are evolving extremely rapidly, and that evolution will accelerate. Information business models will change rapidly as technologies and customer capabilities change over time. Of course, underpinning that, and of particular advantage to us, is the fact that the use of the English language remains a powerful asset in any information business.
In sum, the UK is extremely well placed to generate businesses based on information; we hold significant competitive advantages. However, businesses that rely on the use of public sector information face significant barriers. Data are dispersed widely across central and local government. There is no common understanding of the value of data, or what defines their quality. There are no clear principles on how to share data to produce information within Government, let alone how to provide it to an external third party. To focus on geographical information, it would be valuable to have an agreement on how data can be shared by local government, which holds a significant proportion of localised information of various kinds. I have already mentioned Ordnance Survey. The Land Registry stores information on property transactions, the Post Office controls the use of postcodes, the Environment Agency maps issues such as flood risk, and there are many other kinds of information. However, there is no framework in which that can all work together. That, of course, hinders the development of public sector information, as well as the availability of much of the data in the private sector.
There is no strategic framework in which to determine the various policy goals of considering the use of public sector information. There may be social value in allowing relatively ready access to data, in maximising the use of data collected in the public sector so that it performs multiple functions, in the recovery of costs, in generating a return on investment, in controlling the context of any reuse, in maintaining and developing data quality—I will come back to that point—and in fostering economic growth. Those are all perfectly legitimate policy goals, but the Government have not given those who hold data an adequate framework in which to determine which are the most important, and how to value them.
There have been tentative attempts to establish ground rules on how to trade information, but the regulatory framework is neither resourced appropriately to address the diverse demands of the sector, nor empowered to enforce any guidance on fair trading. Without a governing strategy, decisions on the future governance, or even ownership, of some of the sector's key players, such as the trading funds, Ordnance Survey, the Hydrographic Office and the Met Office, are at best premature, and at worse risk damaging the development of the sector.
To give an example, some of those businesses—and businesses they really are—would have significant value in the marketplace if they were ever disposed of. That would be an attractive prospect for a Government seeking to create an additional stream of money for other purposes. However, without a clear understanding of what the organisations were supposed to do and of how they might trade with others, such judgments would be dangerous and risk damaging the developing marketplace in public sector information and its reuse in the private sector.
What do I want? First, I want a recognition of the possible scale of our lost opportunity. The OFT reckoned that another £600 million might be generated each year if public sector information were properly understood and sold, with the important qualification that only a relatively small proportion of that lay within the responsibility of the various trading funds that have already developed businesses in trading public sector information. For example, a large amount of that lost revenue lies in local government, in which the mere existence of much of the information is not known about and it is certainly not possible to make it available to third parties.
The first requirement is a clear strategy with proper Government ownership. One of the difficulties is that a variety of Departments have a role to play; there is no clear, coherent leadership, as was evidenced in the preparations for responding to this debate. My hon. Friend the Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform has been passed the parcel of answering at 10.15 or thereabouts, but to be honest the task could have gone to a number of other Ministers. Indeed, I was asked which Minister I thought it appropriate should answer the debate. There is a lack of clarity at that level that needs to be resolved.
The strategy should at least address how the various policy goals that I set down should be balanced in any policy on pricing and rights control. It should explicitly set out the duties of key holders of public information in respect of accuracy and comprehensiveness. As an example I cite the annual report of Ordnance Survey, which has to
"represent 99.6 per cent. of significant real-world features in the database within six months of completion."
To give a picture of the difficulty of that task, I should say that that means any significant building development anywhere in the country. Even if it relates to a relatively remote location where the reuse of the information is of minimal value, the database has to be kept very accurately up to date. We need clear goals of that kind to be imposed on public sector bodies. The strategy should also address how investment could be maintained to ensure data quality and data development based on public service needs. It should ensure that our powerful brands, to which I have referred, continue to be associated with quality.
I should like briefly to comment on the free our data campaign, which has suggested that the correct path is to distribute Government data virtually for free, or at cost. The difficulty of that model, which relies on the argument that that would generate substantial economic growth and tax revenues that would easily repay the amount lost in revenues directly associated with the sales, is that I am afraid it places a substantial reliance on any Government—not just this one—to continue to fund the development and maintenance of the quality of data in those organisations. At the moment, the organisations have revenue streams on which they can rely to invest into the future. Simply relying on the Treasury to bury its hand into its pocket periodically to develop data into the future is wishful thinking. That is not the path down which we should be treading.
We also need a stronger Office of Public Sector Information able to enforce its decisions on market unfairness. The OFT report says:
"Comparing the size of OPSI and the size of the sector it regulates with the established economic sector regulators"— not an entirely fair comparison, but the point is well made—
"and the size of the market sectors they regulate, OPSI appears very small, with both fewer financial resources and fewer staff."
If the sector is to be taken more seriously, it requires more specialist resources to tackle issues of pricing and market fairness raised by partners in developing new products. There needs to be a robust test of reasonableness in pricing policy that reflects direct costs and proportionate recharging of public service duties. To take the example of Ordnance Survey, perhaps 27 per cent. of the data that it holds on mapping in the UK genuinely has a commercial value for re-use. There are large parts of our country that relatively few people want to know about in great detail. That information is prepared for our own purposes in Government but does not have a substantial commercial value, so how does one factor the cost of collecting it, as part of Ordnance Survey's universal service, into the sale of products to third parties?
My next objective is that we should have a modest investment—small sums go a long way; I have mentioned the low barriers to entry in this sector—in experiments focused on areas of Government data that are less well understood and where partnerships have been hard to establish. Local government data may be an example. There should also be a framework to ensure policy momentum, because this field changes extremely rapidly, and an international dimension—the United Kingdom Hydrographic Office and the Met Office, for example, are major international players—should be maintained in policy development.
In 2000, there was a cross-cutting review of the knowledge economy that addressed this issue, at least in part. I am afraid that since then we have done relatively little. We cannot afford these lengthy periods of neglect. I have highlighted the lost revenues, the existing potential, and the competitive edge that we have in the UK. Let us take advantage of those things.
I congratulate my hon. Friend Mr. Todd on securing parliamentary time for this important debate. I welcome the opportunity to explore the issues that he has raised. I hope to give him some comfort by saying that there is more work being undertaken and more consideration in Government of those issues, albeit that there is unfinished work before us.
Let me set out a little of the background to the Government's position. We welcomed the Office of Fair Trading's market study into the commercial use of public information, which, as my hon. Friend will recall, was published in December 2006. The study was thorough and identified a range of detailed and complex issues. The recommendations reflected a concern by some users of public sector information about the interaction between Government and markets, specifically the impact that the public sector can have on the way that markets work.
Another issue mentioned in the OFT report was the estimated potential value of public sector information within the economy. The report concentrated on the commercial use of public sector information. As my hon. Friend acknowledged, that is a particularly important area in driving new, improved and innovative products in today's global market. Public sector information holders are often the only source for much of these raw data. Several PSIHs also compete with businesses in turning that raw information into value-added products and services. As my hon. Friend also alluded to, the OFT estimated that the value of public sector information to the UK's economy has the potential to increase from £590 million at the moment to more than £1 billion annually. As he also said, some experts believe that that figure could increase even further.
The main conclusions of the OFT's study were that public sector information holders should make as much unrefined public sector information available as possible for commercial use and reuse; that businesses should have access to public sector information at the earliest point at which it is useful to them; and that where the public sector information holder is the only supplier, access to information should be provided on an equal basis for all businesses and the public sector holder information holder itself. The report also referred to the need to use proportionate cost-related pricing, and the need to account separately for costs and income from unrefined and refined information activities so that public sector information holders can demonstrate that they are providing and pricing information fairly and in a non-discriminatory manner.
The last recommendation from the OFT's work that I shall highlight is the suggestion that the role of the Office of Public Sector Information be widened to monitor public sector information holders better, with improved enforcement and complaints procedures. The Government response welcomed the recommendations of the OFT study, and accepted the majority of them. As my hon. Friend may be aware, we noted in our response that some of the OFT's recommendations required further work by the Government.
My hon. Friend alluded to the subject of trading funds. We believe that further work is required to consider the impact of proposed changes to data definitions and pricing policy, especially the impact on trading funds, in order to ensure that there are no adverse impacts on the ability to collect the information in the future or on the performance of trading funds in the fulfilment of essential public tasks, and to ensure that the proposed benefit is sufficient to justify the fiscal cost. He may be aware that such work is currently being undertaken and I expect that the initial research will be concluded later this year.
As my hon. Friend indicated, the current model has been good for the taxpayer. Thanks to the trading funds' role in fulfilling public tasks, the Government create and own high quality information assets, such as mapping data, geological data, nautical charts and meteorological data, but the taxpayer only pays a fraction of the cost of their collection and dissemination.
Given that the trading fund model is well established, the Government believe that we should take the time to look at the issues in some detail. We must ensure that high-quality data continue to be produced, and public sector tasks fulfilled, at the same time as opportunities for the wider economy are maximised. It would be entirely premature to abandon what has been a high-quality data production model without fully exploring the consequences. As my hon. Friend said, the UK has world-class agencies, including Ordnance Survey, the Met Office, the UK Hydrographic Office and the Land Registry. I shall take this opportunity on behalf of the Government to pay tribute to the professionalism, expertise and talent that is housed in each of those offices. We should be careful to avoid destabilising those excellent agencies.
The Government have set out the principles within which trading funds should operate and how public sector bodies should charge for their services in the recently published document "Managing public money". Individual bodies are free to set their prices within the markets in which they operate, provided that they abide by those broad principles. The research that is under way may inform future policy in this area.
I quote from the Government's answer to the OFT report:
"The Chief Secretary to the Treasury asked that each relevant government trading fund prepare an action plan setting out where they were, and how they proposed to open access to their information further using the principles for improving its pricing and dissemination set out in the report."
That process was set for the end of 2007. Will it be completed?
We need to complete the research to which I have alluded, which is absolutely key. As my hon. Friend rightly said in reference to the expertise of those bodies, the last thing that the Government believe is that we should destabilise them. There are discussions under way within Government. We are seeking to achieve the policy objectives set out by the Chief Secretary to the Treasury and more information will be made available to my hon. Friend and to the House in due course.
The Office of Public Sector Information plays a crucial role in the management of Crown copyright information. A wide range of Government information can be reused under the online licensing system, which is managed by OPSI. In addition to the work of OPSI, some parts of Government, mostly the trading funds, operate under delegated authority. Delegations of authority confer the right on Government organisations to license the reuse of material that they produce. They are subject to the Government organisations complying with the standards of fairness and transparency as set out in the information fair trader scheme. Public sector information holders should apply exactly the same terms to all commercial reusers of their information, including when they are reusing their own information. It is essential that there is transparency and fairness and it is unlawful to discriminate between reusers under the Re-use of Public Sector Information Regulations 2005, regardless of whether they are public or private.
My hon. Friend makes the important point that the scheme is voluntary. However, it includes all the trading funds and it has helped to raise standards. For example, Ordnance Survey is now being much more transparent about its pricing and licensing terms. It has dropped the restriction to competitive activity in granting its licences and we are encouraging more public sector information holders to adopt and follow the fair trader scheme principles.
OPSI also has a regulatory responsibility under the 2005 regulations to consider complaints relating to reuse. That complaints process provides a low-cost alternative to taking action through the courts. It also provides a level of assurance to reusers that their concerns will be investigated transparently and openly.
A series of practical and innovative steps have been taken by OPSI to ensure that the importance of the regulations is recognised, understood and put into practice. When the Office of Fair Trading perceived or identified potential competition issues, the OFT, OPSI and the trading funds have worked to resolve them. Overall, the regulatory regime is working but we are looking to improve and will take on board the recommendations made by the OFT.
My hon. Friend referred to the power of information review, which was published on
I will write to my hon. Friend to address a number of the other more general questions that he raised and to give him some additional comfort on the time scale. In conclusion, I am grateful to him for giving me the opportunity to set out a little of the background to the Government's work in this area.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.