Written evidence from Institute for Government (PGG19)

The Public Administration and Constitutional Affairs Committee

Propriety of governance in light of Greensill inquiry

This evidence brings together key points from the Institute’s recent publication, Improving ethical standards in government. More detail can be found in the publication, and we would be happy to discuss our recommendations with the committee if helpful.

Introduction

Since the reports about the role of former prime minister David Cameron in lobbying the government on behalf of Greensill, questions have been raised about whether the rules governing the relationship between ministers and civil servants and the private sector are fit for purpose. This note sets out recommendations from the Institute for Government on how the current rules can be better enforced, and what new rules should be introduced to ensure greater transparency and higher standards of behaviour.

It is important to note that there is nothing inherently wrong with charities, interest groups and businesses lobbying government. There are also many benefits to allowing people, both ministers and officials, to move between the public and private sectors and to ensuring the views of business are heard at the heart of government. Such exchange makes for better policy and enhances the skills available to the civil service. But the benefit of this exchange must always be balanced with the principle that people doing public sector work should not be motivated by the possibility of using their position for personal or private sector gain. The rules we discuss below will help re-establish public confidence. But equally important is the cultural leadership required throughout government, from both senior officials and ministers. Ultimately, the prime minister sets the tone for how the government as a whole behaves.

How current rules can be better enforced

Ministers

The rules governing ministers’ behaviour and responsibilities are set out in the ministerial code. Unlike the civil service code and the special advisers’ code of conduct, the ministerial code has no statutory basis. The Institute believes that this should change: the ministerial code should be given a basis in legislation. Treating the ministerial code on the same basis as the codes that apply to the people who work for ministers will show that the prime minister takes the standards expected of ministers seriously.

This does not mean codifying in statute particular provisions of the code, as happens with the special advisers’ code, and the Northern Ireland ministerial code. It is important that the prime minister is still able to issue the code in his or her name, and choose what it contains. But the existence of the code and the need to produce one should be given a full statutory basis.

Doing so will impress on ministers and their staff the need to abide by the provisions of the code. Currently, the ministerial code requires ministers to publish information on their meetings with outside groups to discuss government business. However, this information routinely takes months to be released (for example, on 10 May 2021 Defra published information on its ministers’ meetings during the period October to December 2020). It is also sometimes incomplete: the highest-profile example recently is the meeting between health secretary Matt Hancock and Lex Greensill, which was not recorded in DHSC’s transparency publication for the relevant period. Ensuring that ministers and their offices take their responsibilities seriously, and are as transparent as possible, will help rebuild confidence. If done properly, it will also ensure that all ministerial meetings with lobbyists are recorded and made public, to allay concerns that these meetings are being hidden. Ministers should also be reminded that, as the cabinet secretary said in his evidence to the committee recently, “government business is government business however it is conducted and by whatever means of communication”.

To ensure that ministers abide by the provisions set out in the ministerial code, the independent adviser on ministerial interests should be given the power to initiate his own investigations into potential breaches of the code, and to publish the findings. The prime minister argued in a letter to Lord Evans, chair of the Committee on Standards in Public Life, on appointing Lord Geidt as his new adviser that “I cannot and would not wish to abrogate the ultimate responsibility for deciding on an investigation into allegations concerning ministerial misconduct”.

However, empowering the adviser in this way would not take away ultimate responsibility for enforcing the rules from the prime minister – he would still be able to assign any sanction in the result of a breach of the code. It would, however, take away some of the uncertainty and potential conflict of interest of ministerial code investigations, as they would be in the hands of an independent adviser, not the prime minister. It would show that the prime minister expected his ministers to adhere to the highest standards and that he would not put political considerations ahead of the need for such standards. The Institute believes the prime minister should reconsider his decision to not allow Lord Geidt to begin his own investigations.

Civil servants

The most senior civil servants are also expected to publish information on their meetings, but these are also often delayed. For example, the Department for Education only has information on its permanent secretary’s meetings to March 2020. It is understandable that there have been delays to publication, given the pandemic and the change in permanent secretary. But it is not acceptable that the latest information available is 14 months old. Civil servants should be held to account by their departmental select committee on why they are not publishing relevant information in a timely manner.

Former ministers and civil servants

The business appointment rules, as overseen by ACOBA, need an update. The Cameron case has shown that there are legitimate questions about how much hidden access former prime ministers should have to their successors in government. The Institute has argued that the ban on lobbying government should be extended from two to five years after leaving for all former cabinet ministers, including prime ministers.

ACOBA also needs greater enforcement powers. Its chair, Lord Pickles, made the point that embarrassment can “seriously affect an ex-minister’s, and indeed an ex-civil servant’s, prospects” of post-government employment. But embarrassment is not the same as real sanctions and some are seemingly impervious to it. The government argued recently, in its evidence to the Committee on Standards in Public Life, that the current “moral and reputational pressure” resulting from the rules means that no legal powers for enforcement are necessary. Recent cases where former ministers have failed to abide by the rules have shown that this is not the case. ACOBA should be given the power and resources to investigate individuals who have not abided by the rules and to impose sanctions, including fines, on those who do not comply.

What additional rules should be introduced

Civil servants

One of the concerns raised in the Greensill case was that of civil servants with responsibility for government budgets having jobs with companies that provide services to the government. To avoid this greater transparency of all senior civil servants’ potential conflicts of interests is needed. The cabinet secretary asked his permanent secretary colleagues to investigate whether any of the officials in their departments had second jobs, and found fewer than 100 officials who hold paid employment alongside their civil service role. The fact that permanent secretaries only gathered this information after the Greensill revelations show that the civil service was not doing enough to manage potential conflicts of interest, even if the number of officials with second jobs is relatively small.

As a result, the Institute believes that civil servants should have to declare all their interests in private sector companies to their departments, including any paid outside employment, and the interests of those in the senior civil service should be published. All civil servants, including those entering from the private sector, should have to seek and follow the advice of their permanent secretary to avoid any real or perceived conflicts of interest. Departmental boards and the Civil Service Commission should ensure that permanent secretaries are providing adequate advice to officials in their departments.

Special advisers and ad hoc appointees

Currently special advisers are only required to publish information on their financial interests when it is considered ‘relevant’ by the permanent secretary of their department. Ad hoc appointees who deal with high-profile issues (commonly referred to as government ‘tsars’) are not required to declare any information on their private financial interests. Both of these arrangements mean that the public cannot be confident that people directly appointed by ministers do not have any conflicts of interest with their government role.

To show that it takes transparency seriously, the government should ensure that special advisers and other non-regulated appointees register all their financial interests with their departments, and these should be published quarterly. Special advisers and other ministerial appointees should have to seek advice from the permanent secretary of the department they are joining as to whether their private financial interests present any potential conflict of interest with their government role.

Conclusion

This note has set out ways in which current rules can be better enforced, and suggestions for new rules to close some of the gaps in the current landscape exposed by recent events. Taken together, these changes would go some way to help rebuild public confidence that the system ensures transparency and that the rules are not solely enforced by the people they apply to. However, rules can only do so much. To make a lasting change, leadership from the prime minister is needed. He must show through his actions as well as his words that he expects all members of his government, and the civil servants that work in it, to adhere to the highest standards.

May 2021