Financial impact of the PSI Directive: Pricing and Charging Key Issues Chris Corbin ePSIplus Analyst...

Financial impact of the PSI Directive: Pricing and Charging

Key Issues

Chris CorbinePSIplus Analyst

Prague, 30 October 2006

funded by eContentPlus

Presentation Outline

Part 1: ePSIplus project perspective - process and deliverables

Part 2: Impact of PSI Directive perspective & Economic perspective

Part 3: Value chain

Part 4: National Framework perspective

Part 5: Private sector perspective

Part 6: Public sector perspective

Part 7: Discussion - 30 minutes

Theme 4: Impact on prices and charges

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Theme 4: description

• The effects of the Directive on the PSI value chain, on costs, access and organisation within the public sector, including remedies for budget loss as a result of new charging policies.

• Developments in pricing and charging policies: emerging impact and approaches toward free of charge access, marginal costs charging, ‘reasonable return on investment’ policies etc

• Impact of varying fiscal and public sector cost-recovery approaches across Europe

Theme 4: Impact on prices and charges - PART 1

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Meetings

– April 2007 - Helsinki

– November 2007 - London

– June 2008 - Rome

The meetings will group Member State experts by typology and fiscal administrative conditions.

The meetings will address all levels of the public sector.


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ePSIpluswebsite

Country Reports

PSIBibliography


Background paper on issues and good practice

Meeting 1

Publish materials and report on Meeting 1

Meeting 2


Meeting 3


Undertake web based survey and report

Final report on the Financial impact of the PSI Directive

Present to final conference

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PSI Directive

Article 13: Review (Before July 2008)

- The effects of the principles applied to charges


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Data can be made available:

• No charge - Free (no financial transaction involved).

• A marginal cost charge.

• A charge - where the charge for data can be based upon:

– Collecting

– Producing (creation and collation)

– Reproducing

– Dissemination (user support)

– ROI

PSI Directive:

Expected outcome on prices and charges

A downward effect on charges and re-use conditions

Issue:

How to determine whether the change in prices and charges if detected are as a result of the PSI Directive?


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What might impact prices and charges?

• Fiscal policy (Government financial policy)

• A policy change

• A change of Government (Political)

• Technological advances

• Competition (From other data providers)

• Modernising government

• Structure of public sector (constantly changing)

• EU PSI Directive

• Regulation (Competition, Monopoly…)

• Temporal

• Public sector culture, behaviour


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A methodology to assess movements in prices and charges

• Monitor PSIH’s that had a charging regime in place prior to 1st July 2005

• Where PSIH’s have introduced a charging regime since 1st July 2005 to be compared with equivalents where the information is the same.

• Make comparisons with equivalents in other Member States.

(But will need to take into account GDP, different operating frameworks, and ensure like with like)


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Europe: GDP Per inhabitant (1999 and 2005)

0

50

100

150

200

250

300

Luxembourg

NorwayIreland

Switzerland

IcelandDenmark

Austria

Netherlands

BelgiumSweden

UK

FinlandGermany

France

Euro Area

ItalyEU25SpainCyprusGreece

SloveniaCzech Rep.

Portugal

Malta

HungaryEstoniaSlovakiaLithuania

PolandCroatiaLatvia

RomaniaBulgariaTurkey

Macedonia

EU15

PPS (Purchasing Power Standards)

GDP (2005) GDP (1999)

PSIH’s within the monitoring frame

• Cadastral Agencies

• Environment Agencies

• Hydrographic Agencies (Signatories to international agreements)

• Mapping Agencies

• Meteorological Agencies (Signatories to international agreements)

• Statistical Agencies

• Transport Agencies

All of the above are within the major sectors identified in the EC Green Paper


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Temporal aspect of value of data or information

0

10

20

30

40

50

60

70

80

90

100

0 918 27 36 45 54 63 72 81 90 99

108117126135144153162171180189198207216225234243252

Time

Value


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Potential Data &

Information available for re-use

PSI re-users(Value Chain)

InformationConsumers

Public Sector

InputValue

OutputValue

Value added = O/P Value - I/P Value

Economic analysis: simplified model for re-use of PSI


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Potential Data &

Information available for re-use



Public Sector

ComplianceConfiguration of Public SectorOperating frameworkGeographic distributionInternal data flows (IPR/Cross charging)InvestmentNumber of entitiesPricing modelsProductivityROCETerms & ConditionsTransparency

Configuration of value chainGeographic distributionInvestmentNumber of entitiesPricing modelsProductivityRe-use sectorsROCEWorth of organisation

Economic analysis: simplified model for re-use of PSI: Obtaining the data

Article 6

Principles governing charges

Where charges are made, the total income from supplying and allowing re-use of documents shall not exceed the cost of collection, production, reproduction and dissemination, together with a reasonable return on investment.

Charges should be cost-oriented over the appropriate accounting period and calculated in line with the accounting principles applicable to the sector bodies involved.


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Article 6

Principles governing charges

Issues to be considered:

• How would a potential PSI re-user know that these conditions have been met?

• What is, and how would one detect the acounting period that has been adopted in the pricing regime?

• How would one access the efficiency of the organisation?

• If there is no competition how will one determine whether the price is value for money?


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UK annual turnover per employee for the financial year 2004/2005

£ 48,580

£ 23,185

£ 49,675

£ 92,040

£ 34,381£ 77,894

£ 46,581

£ 54,079

£ 48,485

£ 69,937

Companies House General Registers of Scotland HM Land RegistryMet Office Office of National Statistics Ordnance Survey GBOrdnance Survey Northern Ireland Patent Office Registers of ScotlandUK Hydrographic Office


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Annual Turnover per employee for a sample of UK Public Sector Information Holders (PSIH's) 2004/2005

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

GROSONS OSNI

ROS

Companies Hse

HMLR

Patent OffAverage

UKHO OSGB

Met Office

Organisation

Pounds


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UK HM Land Registry - Percentage Return on average Capital Employed (ROCE) per financial year

0

5

10

15

20

25

30

1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05Financial Year

Percentage return


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UK Patent Office Return on Capital Employed (ROCE)

0

5

10

15

20

25

30

35

1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Financial Year

%

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Recital 14

Where charges are made, the usual income should not exceed the total costs of collecting, producing, reproducing and disseminating documents, together with a reasonable return on investment, having due regard to the self-financing requirements of the public sector body concerned, where applicable.

Production includes creation and collation, and dissemination may also include user support.

Recovery of costs, together with a reasonable return on investment, consistent with applicable accounting principles and the relevant cost calculation method of the public sector body concerned, constitutes an upper limit to the charges, as any excessive prices should be precluded.


Recital 14 continued

The upper limit for charges set in this Directive is without prejudice to the right of Member States or public sector bodies to apply lower charges or no charges at all, and Member States should encourage public sector bodies to make documents available at charges that do not exceed the marginal costs for reproducing and disseminating the documents.


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UK Met Office - Income analysis per Customer Sector per financial year

£ -

£ 10,000,000

£ 20,000,000

£ 30,000,000

£ 40,000,000

£ 50,000,000

£ 60,000,000

£ 70,000,000

£ 80,000,000

£ 90,000,000

Defence Civil Aviation Civil Depts. ClimateResearch

Commercial Other

£'s

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05


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UK Met Office Annual Commercial Turnover

£ -

£ 5,000,000

£ 10,000,000

£ 15,000,000

£ 20,000,000

£ 25,000,000

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Financial Year

Commercial Revenue Commercial Costs

Article 7

Transparency

Any applicable conditions and standard charges for the re-use of documents held by public sector bodies shall be pre-established and published, through electronic means where possible and appropriate.

On request, the public sector body shall indicate the calculation basis for the published charge.

The public sector body in question shall also indicate which factors will be taken into account in the calculation of charges

for atypical cases. (not conforming to the usual type or expected pattern)


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UK Met Office


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Irish Met Office


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ECOMET

Article 10Non-discrimination

1. Any applicable conditions for the re-use of documents shall be non-discriminatory for comparable categories of re-use.

2. If documents are re-used by a public sector body as input for its commercial activities which fall outside the scope of its public tasks, the same charges and other conditions shall apply to the supply of the documents for those activities as apply to other users


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A public sector data organisation

C

AStatutory function

BTrading function

Company a Company x

A charges B the same price as C for re-use. A charges C the same price as B for re-use.

Private sector data companies

Example: Public sector organisation that has a public good and commercial role


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NationalMappingAgency

LocalGovernment

A

Public Sector

PSI

Re-user

Private Sector

B

Data Required: Changes in the built environment, Street names.

Transaction A: Some members states charge (Sweden) others do not (UK) Transaction B: Conditions should be the same for that Member State.

Due to precedence one would expect conditions will be the same for A and B

Question: Where would one find this information?

EU PSI Directive Article 7 (Transparency), Article 10.2 (Level playing field)UK SI Regulation 14.2, 16 & 17

Business Analysis: pricing & Service level precedence


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PSI Sold

PSI Free

PSI notavailable

Customer


Analysis of PSI and data flows


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PSI Sold

PSI Free

PSI notavailable

Customer(Includes

Public Sector)


PSI Distributors/ Partners No added value

(1:1 relationship not an aggregator )

Analysis of PSI and data flows


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Economic analysis: simplified model for re-use of PSI

Related areas that impact: eGovernment as public sector moves down stream,procurement, PPP

PSI

Customer

Producer

ProfessionalServices

Content Providers

Data, Games, Navigation, databases, etc.

Commercial re-use sector

Risk, Catchment, Design (architecture, civil engineering), etc

Information services, travel planning, catalogues, tourism, etc.


Other Data Suppliers


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Simplified Value Chain

Data Collector

Datapackager

Data Wholesaler

Data Distributor

Data Integrator

Customer

Data Collector

Datapackager

Data Integrator

PSI

LinguisticServices

Data LocatorServices

SemanticServices

DirectoryServices

PublicSector Trading

FinancialServices


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Parliament

Setting the legal

framework Scrutiny

National Audit

Data Privacy & Protection

Competition

Information

RegulationPublic Sector

Public Sector Organisation Reuse of PSI Policy

National re-use PSI framework

Financial Framework and

Risk Analysis Framework

Civil Society (including the market)


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25 Member States implementing PSI Directive

Directives, Communications

PSI framework

Parliament

Council

Commission


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THE GREEN BOOK

1991

1991 1997 2003

Financial Resources Limited:- Sets Return on investment- Bid for financial resources


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InformationCommissioner

Office ofFair Trading

The National Archives

Office of Public Sector Information

Department of Constitutional Affairs

CabinetOffice

Department ofTrade & Industry

MOUMOU

The Regulators

UK PSI Regulation: October 2006 to current time EU Competition Network


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An IDEA!

BuildIDEA

Viable?

Launch&

Sustain

ProduceBusiness

PlanViable?

Y Y

N N

Customers

Time to Market

Time factors that will be considered:

• Window of opportunity

• Time to achieve return on investment

• Period of profitability

Business testing & planning

• Market analysis• Resource analysis• Risk analysis• Price analysis• Growth analysis• Sustainability analysis

Considering the re-use of PSI opportunity!


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PSIH’s that charge state:

• The quality of the data will fall if they are forced to lower there charges!

• That universal coverage of data maybe sacrificed!

• That the data may not be as current!

That the reason for this is that funds by Parliamentary vote may not be consistent over time.

How can one address these points and are they valid?


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Issues:

- If the PSIH has a public task then it will need to maintain that task irrespective of whether it is vote funded or self funded.

- Charging by PSIH’s is a relatively new policy and as such one can establish whether the QUALITY has changed as a result.

- Is the relationship between quality and level of charge valid? Evidence elsewhere shows that this is not the case.

- Case studies are needed to substantiate the claims. For example National Statistics & EU Statistics are now by enlarge at no charge or marginal cost - has the quality of these services really fallen as a result?

Interested in PSI then why not visit:

www.ePSIplus.net


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Discussion: 30 Minutes

Financial impact of the PSI Directive: Pricing and Charging Key Issues Chris Corbin ePSIplus Analyst...

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