Public Sector Transparency – Do We Need Open Receipts Data as Well as Open Spending Data?

Some time ago, in the post Using Aggregated Local Council Spending Data for Reverse Spending (Payments to) Lookups, I described a way of looking at local council spending data based on how much different councils spent with each other.

This technique generalises within and across sectors, so for example we could look at how hospitals spend money with each other, or how police authorities spend money with each other. In this way, we can get a picture of how public bodies buy -and sell – services off each other. The mappings don’t have to relate to spend, either – we could equally well use this sort of model to see how hospitals transfer patients to one another, or how mental health or social care services offer out-of-area cover to each other, or how councils and housing trusts manage transfers between each other.

The insight that lets us produce this sort of view is that we have entities of a particular sort (hospitals, for example, or local councils), entering into transactions with other entities of the same sort. If these sorts of entity all operate under the same transparency rules, a requirement to publish outgoing (spend) transactions, for example, then we can recreate incoming (receipt) transactions from each entity of the same sort. For example, if local councils are required to publish details of spend over £x, then we can also learn how much councils received from other local councils by means of transactions over £x.

As the UK Government at least seems hell bent on getting markets established in the delivery of public services, markets that can include private companies, then we are faced with a possible asymmetry in transparency information.

UK Gov Policy – Making local councils more transparent and accountable to local people

The public should be able to hold local councils to account about the services they provide. To do this, people need information about what decisions local councils are taking, and how local councils are spending public money.

And from the NHS:

NHS – Transparency of Spend

As part of the government’s commitment to greater transparency, there is a requirement to publish online each NHS organisation’s expenditure over £25,000. In accordance with the requirement NHS Direct publish this on the basis of payments made in each calendar month.

For example, if hospital A buys significant services off hospital B, and must report that spend under transparency legislation, we can build up a picture not only relating to A’s spend, but also B’s sale of services, because A’s data relating to spend with B is openly available; which means B’s receipts from A are also available. (In this example, if items can be itemised as less than £25k per item, then this form of reporting under transparency guidelines is not required.)

If hospital A now buys service of company C, then we can look up spend from hospital A to get a picture of how much public money is flowing out to the private sector and into company C. That is, we can get an idea of company C’s receipts from openly published hospital spending data. (Of course, games could be played with itemisation – 10 treatments at £3k a treatment would result in a ‘must declare’ spend of £30k on the course of treatment, but an undeclarable £3k per treatment if billing is organised that way.)

But what if company C buys services off hospital B (maybe even subcontracting services it was contracted to deliver by hospital A)? If the spend data of company C is not subject to transparency requirements, and the receipt data from the hospital is not publicly available, we lose sight of how money is being spent within and across the public service.

Whilst private companies may balk at being required to publish details of their own spending data, we might still be able to recreate a picture of their spend with public services by requiring public bodies to also publish receipts data, along with the current requirement to publish spend data?