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Press releases 2006 -

OFT report finds public sector bodies cost the economy half a billion in hidden information markets

171/06    7 December 2006

The OFT's market study into the commercial use of public information has found that more competition in public sector information could benefit the UK economy by around £1billion a year.

Download Commercial use of public information (pdf 707 kb).

Examples of public sector information include weather observations collected by the Met Office, records held by The National Archives used by the public to trace their family history, and mapping data collated by Ordnance Survey. The underlying raw information is vital for businesses wanting to make value-added products and services such as in-car satellite navigation systems.

Public sector information holders (PSIHs) are usually the only source for much of this raw data, and although some make this available to businesses for free, others charge. A number of PSIHs also compete with businesses in turning the raw information into value-added products and services. This means PSIHs may have reason to restrict access to information provided solely by themselves.

The study found that raw information is not as easily available as it should be, licensing arrangements are restrictive, prices are not always linked to costs and PSIHs may be charging higher prices to competing businesses and giving them less attractive terms than their own value-added operations.

The report has also found that much of the legislation and guidance which aims to ensure access to information is provided on an equal basis, lacks clarity and is inadequately monitored. As a result the full benefits of public sector information are not being realised.

The OFT concludes that PSIHs should:

  • make as much public sector information available as possible for commercial use/re-use
  • ensure that businesses have access to public sector information at the earliest point that it is useful to them
  • provide access to information where the PSIH is the only supplier on an equal basis to all businesses and the PSIH itself
  • use proportionate cost-related pricing and to account separately for their monopoly activities and their value-added activities so that PSIH's can demonstrate that they are providing and pricing information fairly and in a non-discriminatory manner, and
  • enable the regulator (Office of Public Sector Information) to monitor PSIHs better, with improved enforcement and complaints procedures.

Implementing these recommendations could double the value of public sector information to the UK economy to £1billion a year, and benefit consumers by providing a wider range of competitively priced goods and services.

The OFT found good examples of PSIHs working well with businesses, such as the British Geological Survey making core samples and field notebooks accessible to businesses producing their own mapping products. Also, the Met Office ensures that it charges the same price for weather observations to competing businesses as to its own weather forecasting operations. However these cases were not found to be typical.

John Fingleton, OFT Chief Executive, said:

'This is ground-breaking work for the OFT, looking at hidden markets in the economy. These monopoly public sector bodies cost the UK economy £500 million in lost opportunities. Our recommendations will help to make this valuable public asset more easily available for commercial uses which will benefit the economy and consumers.'

NOTES

1. The OFT is using the term 'raw' information to mean unrefined information for which the PSIH is likely to be the sole supplier. PSIHs are usually the only source of the basic information they hold. There are good reasons why this is the case, such as: high fixed collection costs, government funding for collection and privileged access, perhaps through statutory collection powers. We refer to this basic information, which cannot be substituted directly from other sources as unrefined information. Once a PSIH does something with the unrefined information which could also be performed by another organisation, such as a private business, if it were given access to that unrefined information, it becomes refined information.

2. The following are the eight largest PSIHs by income from the supply of information:

Ordnance Survey - £100m
The Met Office - £90m
UK Hydrographic Office - £57.2m
Land Registry - £29.4m (most of this income derives from the supply of PSI chiefly for conveyancing services where prices are set by statute)
Companies House - £14.2m
The Coal Authority - £9.3m
Ordnance Survey Northern Ireland - £7.4m
Registers of Scotland - £6.2m

The next 10 largest PSIHs who responded to our survey reported a combined income of approximately £20m.




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