The Department for Education has promised to improve its record-keeping after an investigation by the public spending watchdog raised concern over the way it managed a potential conflict of interest facing a senior official.
The National Audit Office launched a probe after concerns were raised that Morning Lane Associates, a child protection consultancy, had won several government contracts in the years following the appointment of Isabelle Trowler — a former Morning Lane director and shareholder — as chief social worker.
Morning Lane — which previously had no government contracts — has won four DfE contracts worth almost £3m in total since Trowler’s appointment.
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The NAO’s investigation found that Trowler resigned as director and sold her shares in Morning Lane before taking up the chief social worker job, and said she had raised the potential for conflicts of interest on all occasions when she was involved in work on which Morning Lane could be involved.
But the watchdog says the DfE had “no record” of any agreed actions to manage the potential conflict of interest stemming from Trowler’s previous involvement with the firm, and pointed to a number of gaps in the department’s record-keeping.
The NAO probe found that Trowler had “immediately” raised the potential for conflict for interest when she was appointed to the board of a £100m “Innovation Programme” run by the DfE in late 2013.
The scheme invited outside organisations to apply for state funding to test new approaches to social care, and the watchdog said Trowler had recused herself from discussions when Morning Lane launched its own joint bid for the contract alongside five local authorities.
The NAO said there was “no evidence that the chief social worker had any role in considering or approving the grant to the consortium which included Morning Lane Associates”.
But the investigation found that the DfE’s board minutes of the meeting at which Morning Lane’s bid was discussed “do not record […] whether she actually left the room at this point or just did not take part in the discussion”.
The NAO also says Trowler was “not involved” when the department awarded Morning Lane a separate 2015 contract to provide expert advice, adding: “The chief social worker told us she was not involved in assessing or moderating bids under both rounds and the evidence we have seen supports this.”
However, further gaps in record-keeping were identified by the NAO in the DfE’s handling of another contract to run an assessment and accreditation scheme for social workers.
The DfE originally intended for Trowler to chair an assessment panel which would determine the strongest bid for this contract, but the NAO says the chief social worker withdrew from the process “once it became clear Morning Lane Associates were part of a bidding consortium”.
It points, however, out there is again “no record” how the department “determined in advance what action was appropriate to manage her potential conflict of interest” in this process.
The NAO’s investigation also found that the DfE had not followed its own guidance in recording steps to manage conflicts of interest.
Under the DfE’s rules, all senior civil servants are required to record potential conflicts of interest as part of an “annual Assurance Framework Record”, and are supposed to discuss and agree a “proportionate response” with their line manager to try and mitigate the risk of any conflict.
But the NAO’s investigation found “no record” that Trowler had been asked to complete an Assurance Framework Record since taking up the job in 2013, “despite this being the Department’s policy” — something the DfE puts down to an administrative error.
“The department told us that a review of departmental records showed that as a result of an error a very small number of senior civil servants, without budget or management responsibilities were not asked to complete the relevant parts of an Assurance Framework Record,” the NAO said. “This included the chief social worker and some policy advisors.”
According to the NAO, the DfE is “taking action to collect assurances from all those involved, and will take further action to ensure this error does not recur”.
Responding to the report, a DfE spokesperson said: “The chief social worker has no financial connections to Morning Lane Associates and, as this report shows, she has always taken the appropriate steps to recuse herself from discussions involving the company.
“The report highlights a number of areas where the department’s processes could be more robust and we are reviewing our processes in light of this report.”