Government departments are failing to apply the rules regarding senior civil servants moving on to work in business, designed to ensure there is no abuse of office or undue influence exerted, and do not monitor their compliance, according to the National Audit Office (NAO)
The NAO looked at eight departments’ application of the business appointment rules over a four month period earlier this year. The audit watchdog found the centre of government has no oversight of departmental compliance with the rules, which apply to all civil servants who leave the civil service and move to employment in other sectors.
In the past, former HMRC executives have come under fire for taking up new roles with commercial companies such as HSBC which have then been subject to criticism over their tax arrangements.
All current and former civil servants must consider whether they need to make an application under the rules before accepting a new role in another sector. The rules are developed and owned by the Cabinet Office, form part of the civil service management code, and are legally binding as part of the terms and conditions of civil servants’ employment contracts.
However, the NAO found that the guidelines for departments on administering the rules have been removed from the code. The Cabinet Office has been preparing guidelines for departments since 2012, but has not yet published these.
The rules do not state departments can reject applications, but rather that departments can either approve an application unconditionally, or with certain conditions such as being prohibited from lobbying government. The Cabinet Office believes that departments do reject applications, but was unable to evidence this.
The NAO said it was not possible to know from transparency data whether all those leaving the civil service that should have made an application under the rules did so.
Since 2014 the rules have required departments to publish the outcomes of business appointment applications on their own websites. As at June 2017, central government departments had published 170 decisions, while three departments have never published information and one published a nil return.
From their sample, the NAO found that departments were not consistently applying the rules. It also found that no department has assurance that former civil servants remained compliant with the rules for up to two years after they had left public service. The majority of departments considered the onus to be on former civil servants to comply with the rules, and any conditions placed on them.
Only one department consistently informed prospective employers of conditions attached to a business appointment approval, as required by the rules. The remaining seven departments have attached conditions to at least 187 approvals in the past five years; however, only two departments have informed prospective employers of conditions attached to an approval, and in total only six notifications have been sent.
The NAO found four departments have approved retrospective business appointment applications, which the rules state will not normally be accepted. Of these, one identified that it processed a ‘great deal’, and another ‘some’ retrospective applications.
Of the decisions analysed by the NAO, the bulk (36%) related to the Ministry of Defence (37 moves) and the Cabinet Office (25). The Treasury handled eight decisions over the time period of the study, and HMRC four.
In July 2016, the Parliamentary Public Administration and Constitutional Affairs Committee (PACAC) launched an inquiry into the role and effectiveness of the Advisory Committee on Business Appointments (ACoBA), which it said was in response to ‘…increasing concern that the present system is completely failing to address, and subsequently allay, public concern about what has been described as “the revolving door” – people rotating between employment in the public and private sectors.’
Its report, published earlier this year, found increased numbers of public servants moving between the public and private sectors, and declining public confidence in a system that was set up to command trust by mitigating breaches of the rules. The committee described ACoBA as ‘a toothless regulator which has failed to change the environment around business appointments’.
The NAO’s Investigation into government’s management of the Business Appointment Rules is here.
Managing Ministers’ and officials’ conflicts of interest: time for clearer values, principles and action is here.
