Memorandum by Dr Pauline Pollard
I welcome the opportunity to submit evidence
to the Communities and Local Government Select Committee review
of the impact of the recommendations made in the House of Commons
Transport, Local Government and the Regions Committee published
on 22 June 2002.
I have taken an interest as an Information Systems
practitioner and as an academic in the issue of geographic information
and public policy since 1986. During the period 2005-2006 I interviewed
60 people with interest in geographic information policy including:
civil servants, executive agency staff, local authority staff
and people from the private sector. This also included a majority
of the GI Panel members and the views of other stakeholders about
this Panel. I am currently an academic observer on the review
of the Public Sector Information (PSI) Directive implemented to
create a level playing field in the re-use of PSI.
I have responded below to the review under the
four topic headings proposed.
1. THE DISTINCTION
BETWEEN ORDNANCE
SURVEY'S
PUBLIC INTEREST
AND COMMERCIAL
OPERATIONS
The Government in its response to the select
committee's recommendations stated its policy for Ordnance Survey:
"its primary focus is on the collection, maintenance, marketing
and licensing of appropriate national geospatial datasets that
underpin policy, planning and operations across the complete range
of public and private sector activities ... [It would] introduce
new geographical information and mapping-related products to meet
essential national requirements or changing customer needs"
(ODPM, 2002).
There is no clear definition of the public versus
private task and Ordnance Survey is responsible for determining
which products, their specification and their terms of exchange.
It must make a return to the Treasury. Set up to operate as a
public sector commercial enterprise there has been confusion within
and around government between what Ordnance Survey's role is as
regards its public task and its role to provide a financial return
to the Treasury. There needs to be clarification regarding this
as the lack of clarity has a significant impact both on the development
of information sharing for e-government and on the geographic
information market in the UK.
It also may impact on the development of common
policies within European Union with a possible consequence for
the development of cross-border environmental datasets under the
INSPIRE Directive and for the meeting of the Lisbon objectives
to develop the European Union as a leading knowledge economy by
developing a market in public sector information. Its requirement
to make a financial return led Ordnance Survey to lobby for amendments
to EU policies that enable its own survival as a Trading Fund.
Whilst it is entitled to do so, and UK policy is to cost recover,
the lobbying has been questioned by stakeholders within the public
and private sectors.
There are alternative models. Some countries
have legally separated the public task from the commercial task.
Others do not commercially exploit public sector information.
E-government
Geographic information has long been recognised
by members of the Association of Geographic Information (AGI)
as essential to information sharing for both service planning
and service delivery. In 2004, the e-government unit recognised
its significance, and carried out a survey on geographic information
use—promising an analysis and recommendations. However,
the published survey report contained neither (Cabinet Office
, 2005b). In response to an enquiry regarding the role of the
Ordnance Survey in changing the content of the report, the Cabinet
Office replied that Ordnance Survey is part of government advising
colleagues where it has expertise. However, the changes to the
report raise a question regarding the implications for e-government
of Ordnance Survey's advisory role when it is also a trading organisation.
In 2005, the e-government unit published its
e-government strategy aimed at making government "transformational"
by moving to a shared services culture. Identifying the need to
resolve costly delivery failures it recognised the importance
of information management and the "crucial" role of
geographic information within this. However, rather than address
this, it promised a geographic information strategy developed
by the GI Panel (Cabinet Office, 2005). The role and independence
of the Panel is discussed in response 3).
In response to the e-government strategy consultation
it is notable that the Ordnance Survey urged that intellectual
property should be protected so as to realise the benefits of
a shared services culture which "requires the unimpeded flow
of information between organisations" (Shiell, 2006). The
AGI drew an opposite conclusion identifying intellectual property
rights as one of the "biggest constraints" to data sharing
(AGI, 2006)). An example, of the constraints of IPR can be seen
in the conflict over the licensing of use of Ordnance Survey data
in the local government address dataset.
The address dataset
In the early 1990s local government began to
develop a robust, low-cost spatial address dataset to a British
Standard. Although involved with this project, Ordnance Survey
entered the market to develop a product based on the postal address
file (which itself originates from local authority data). It was
able to enter this commercial market because the government placed
no boundaries on Ordnance Survey's remit.
When Intelligent Addressing created the local
government address product it utilised the Ordnance Survey dataset
as a source. In doing this it became responsible for payment of
a licence fee. However, in attempting to licence the local government
address dataset Intelligent Addressing has complained of restrictive
licensing practices by Ordnance Survey. A complaint upheld by
OPSI (Office of Public Sector Information, 2006). A recent ruling
by the appeal body APPSI, contrary to the agreement of both parties
in the dispute that the address dataset is a pubic sector task,
has determined that the Ordnance Survey address dataset has been
developed outside of the public task and is therefore not subject
to the PSI regulations.
The issues around the address dataset are particularly
significant because this dataset did not derive from Ordnance
Survey's original role in mapping. It was a new market and in
electing to go into this market it went into competition with
local government who had identified that for its own requirements
(and those of government) a dataset based on PAF would be insufficiently
robust. The decision therefore created a conflict between two
public sector bodies that has had implications for e-government
service delivery and for the private sector. Depending on the
final outcome, there are potentially significant costs for users
in re-designing databases (Drew Smith et al. 2004). However, government
is not seeking to resolve the issue—leaving it for the market
to resolve despite the potential cost to the public sector (GI
panel website).
2. THE NATIONAL
INTEREST MAPPING
SERVICE AGREEMENT
(NIMSA)
The decision not to renew the NIMSA with Ordnance
Survey is appropriate. It was conceptualised in the 1990s as a
means for supporting Ordnance Survey in its public task where
activities were considered uneconomic, but the implications of
cross-subsidy for the development of a geographic information
market can not be ignored. For example, NIMSA was used to fund
rural addressing whilst Ordnance Survey's competitor in the production
of a national spatial address dataset has not received funding.
This is particularly ironic, if indeed, the Ordnance Survey dataset
was developed outside of the pubic task. Specific national interest
mapping services can be more appropriately obtained through a
public procurement process.
3. THE ROLE
OF THE
GEOGRAPHIC INFORMATION
(GI) PANEL
The select committee recognised a contradiction
in Ordnance Survey's role as both provider and GI adviser in its
proposal for a GI Panel. Stage 2 of the quinquennial review reinforced
this:
"It [Ordnance Survey] cannot reasonably
be expected to offer impartial advice on issues affecting its
own future role or commercial interests". (National Economic
Research Associates, 2002).
The consultants proposed a fully independent
body to advise government on geographic information issues and
identified that Ordnance Survey itself was developing commercially
but in a national policy vacuum. A conclusion I had also reached
(Pollard, 1997).
The government accepted the select committee's
recommendation, but, the implementation of this has been disappointing.
In particular, attention has been drawn to the failure to set
the panel up as an independent public body whose membership selection
is supervised by the Cabinet Office.
By not setting it up as public body, the ODPM
was able to select the Chair rather than the Chair being selected
by the Panel. A civil servant has indicated that the Director
General had a strong view that as GI adviser to government she
should be chair. However, as one government member of the Panel
said:
"If I was chief executive of the Ordnance
Survey I would expect to be chair ... But given the reality
and the politics and the commercial pressures on Ordnance Survey
there is a contradiction there and a suspicion which is going
to get in the way."
A non-government member of the Panel identified
the conflict of interest that arises from the contradiction between
the public and commercial task:
"I think one of the difficulties that all
of these government departments that are also Trading Funds have,
is that they have to wear `two hats' all the time"
Another senior civil servant commenting on Ordnance
Survey lobbying on European policies asked:
"How can the Ordnance Survey lead the geographic
information issues when there is a conflict of interest between
its public sector role and its commercial role?"
Attention has also been drawn to the composition
of the Panel. Whilst it was promised the Panel would be a broad
representation of key interests groups, 9 of the 13 members are
public servants—mostly with responsibility as data providers
rather than as data users. There is again a concern about the
role the Ordnance Survey plays in panel selection; and one civil
servant acknowledged that the minister would "wish to consult
with the Chair of the Panel on any question of membership".
A non-governmental Panel member identified the implications of
this:
"It could be perceived to be an Ordnance
Survey based committee. To be driven by Ordnance Survey ... Therefore
it may appear to an outsider to be constrained in its view of
the economic benefits to the nation".
Members of the Panel recognise the role of geographic
information in sharing information for e-government service delivery
and have focused on the development of a geographic information
strategy. However, others doubt that such a top-down approach
to strategy will be effective (AGI, 2006).
It is to be noted that Panel is not able to
manage controversial issues. On the EU INSPIRE Directive the GI
Panel minutes recorded only that they would be unlikely to reach
agreement. When the collapse of the National Spatial Address Infrastructure
occurred it was suggested the Panel could hold an enquiry but
it chose not to do so—although it had not heard views from
local government or the private sector (GI Panel minutes).
It is uncertain what the Panel can achieve.
As one government panel member reflecting on the power invested
in the Panel said:
"It is advisory. Unless a senior policy
department takes on at a senior level responsibility for geographic
information then it will remain as a technology "looking
for air time".
Other stakeholders express similar concerns:
"People are expecting a lot of it but it
has no clear remit. No resources. It only meets quarterly. Who
are the members—are they individuals or representatives
of particular sectors? What's its status in ODPM ... What is required
is leadership."
The question of how to develop a national geographic
information policy was addressed by the House of Lords Committee
of Enquiry chaired by Lord Chorley in 1987(Chorley, 1987). This
committee was concerned that the data suppliers might stifle innovation
and it sought to ensure that the user view be bought into focus.
It proposed a funded national centre responsible for developing
national geographic information strategy independent of the Ordnance
Survey. The government determined a national centre wasteful.
The public sector reforms that led to the creation
of executive agencies, like the Ordnance Survey, are premised
on an administrative concept of a purchaser-provider split in
which the provider is held at arms-length from government and
policy making is the responsibility of the purchaser. It would
be more appropriate in a market model if this division were strictly
enforced in the case of Ordnance Survey.
4. ORDNANCE SURVEY'S
COMPETITIVE POSITION
IN THE
GEOGRAPHICAL INFORMATION
MARKETPLACE
The case for the Treasury's cost recovery model
has not been established. In 2000, the EU member states agreed
to build Europe as a knowledge economy and the European Commission
promoted a Directive for charging for PSI at the cost of dissemination
as beneficial for economic growth. Research, comparing the PSI
market in the EU with the market in the USA, provided support
for this view (Pira International , 2000).
Responding, the UK Treasury acknowledged that
Trading Funds, like Ordnance Survey, hold a dominant market position.
They could charge high prices to a low volume captive primary
market thereby meet their costs without widening PSI use. The
Treasury retained Trading Funds but identified the need for further
research to consider the economic issues around charging for the
economy as a whole.
This need for a review of the economics of information
pricing was reiterated in 2006 by the Office of Fair Trading (OFT)
in its market study on The Commercial Use of Public Sector
Information. It drew attention to the need for joined up policies
which considered the conflicting aims of e-government for wider
use of PSI and the use of targets for income generation(Office
of Fair Trading, 2005).
In the meanwhile, the Ordnance Survey continues
to hold a dominant market position and there remains little market
choice for its primary customers. Ordnance Survey contributes
a substantial sum to the Treasury, but, a significant percentage
of its revenue comes from its captive public sector customers.
There are many hidden costs to public sector customers in the
procurement process (particularly for local government where each
local authority has to engage in the process) and drawbacks caused
by limits to sharing through copyright issues. Customers complain
of long procurement documents, costly changes to web services
to meet royalty payments and copyright agreements, and restrictions
on who may use data.
Given the lack of a market in many Ordnance
Survey products these costs do not necessarily lead to the benefits
to users claimed by government in terms of product pricing and
quality. In addition, there are cost implications in lobbying,
sales staff, legal services and in the development of regulatory
regimes. Any review needs to consider these aspects.
Many private sector customers consider the costs
of Ordnance Survey products too high. They point out that the
products are developed for the public sector and are over specified
for their needs. They would purchase the products but not at the
prices at which they are made available. I have spoken to private
sector customers who have found it cheaper to fund their own planes
for aerial photographs rather than pay the full costs of Ordnance
Survey products.
The OFT market study criticised all the Trading
Funds for high pricing, restrictive licensing and inadequate quality
but it was particularly critical of Ordnance Survey. It pointed
to the nature and seriousness of many of the problems experienced
by users and its resistance to regulation. It considered that
an information market should operate on a fair, efficient and
competitive basis and expressed concern about the lack of government
guidance on how to achieve this. The government has failed to
meet its statutory requirement to reply to the OFT market study
within 90 days.
It is worth noting that the OFT market study
was carried out after the PSI Directive came into force with an
aim of creating a level playing field to enable the wider re-use
of PSI. The EU is currently monitoring the impact of the Directive
on the information market. It is, however, unlikely that a public
sector information market will develop unless there is a change
of culture in the member states with more understanding of the
importance of the role of information in the knowledge economy.
Within UK government it is also hard to envisage a significant
change of policy unless the Treasury view is challenged at a political
level or a review is carried out that identifies the economic
benefits of a different pricing approach. .
Summary
In conclusion, there continues to be an urgent
need for a review on public sector information policy that is
comprehensive in its approach. Such a review needs to develop
a "joined up policy" that resolves conflicts between
policies and ensures that the transformational government initiative
is not hampered by lack of information sharing capacity. It should
ensure that there is a review of the economics of information
pricing as promised by the Treasury in 2000. If a market model
is to be maintained then the government needs to ensure that there
is sufficiently robust regulation and enforcement regime to ensure
that there is a level playing field in the use of public sector
information so that the private sector can develop information
products.
Thank you for the opportunity to provide evidence
to the committee.
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