By CivilServiceWorld

12 Aug 2012

Twice before, the Public Administration Select Committee has called for reforms to the Advisory Committee on Business Appointments – but to little avail. Now it’s having another go: Colin Marrs reports on its latest assault.

It is hard to find anyone with a kind word to say about the Advisory Committee on Business Appointments, the watchdog which oversees former ministers and civil servants taking jobs in the private sector. A public furore in 2005, following David Blunkett’s failure to disclose to ACOBA his appointment as a director of a company bidding for work at his own department, has been followed by a procession of similar cases which have undermined confidence in the effectiveness of the committee.

ACOBA was established by prime minister Harold Wilson in 1975. Since then, senior civil servants have been required to apply to the committee for permission to take up outside appointments for a period of two years after leaving service. In 1995, the committee took responsibility for overseeing similar rules applying to former ministers. The committee reports to the prime minister for civil service appointments, and when examining the appointment of former ministers the report goes directly to the individual concerned.

The rules the committee enforces were set out in 2010 in the Civil Service Management Code. This document was introduced in an attempt to dispel any suspicion that an appointment might be a reward for past favours, or that employers might gain an improper advantage by appointing a former official with inside knowledge of impending government policy or information about competitor firms. The committee can recommend that former ministers, senior civil servants and special advisers wait for up to two years before taking on outside roles, but has no powers to enforce its decisions.

Over recent years, the Public Administration Select Committee has produced a number of recommendations for reform of ACOBA, prompted by concerns that the committee was failing to retain public confidence. In 2007, it recommended that decisions about business appointments should be taken out of the PM’s hands and given to the Civil Service Commission. In 2009, the committee’s rhetoric ratcheted up a gear. “We are strongly concerned that... former ministers in particular appear to be able to use with impunity the contacts they built up as public servants to further a private interest,” it said in a report.

The same report slammed the narrow make-up of the committee, pointing out that the average age of the members was 70 and that they were all Oxbridge-educated males. There are now two non-Oxbridge members, but ACOBA has not managed to change the perception that it’s something of an insider’s club. “The committee is made up of Westminster grandees,” comments Conservative MP Douglas Carswell. “We need to recognise that it is right to call it an oligarchy – which is morally and ethically wrong.”

Undeterred by its failure to prompt meaningful action, PASC sunk its teeth into ACOBA in another report published last month. The committee’s most radical report yet, it called for the abolition of the committee and its replacement with a new, politically-neutral Conflicts of Interest and Ethics Commissioner, based on the model used in Canada. Committee chairman Bernard Jenkin says: “I have got no criticism of those leading the committee, who are doing their best with limited resources. However, the current arrangements do not meet the public’s expectations.”

The report also recommends tightening the rules on appointments, prohibiting for a period of two years (extendable to five) senior former Crown servants from taking up relevant appointments for companies with which they had significant dealings, and extending the scope of the rules to apply them to junior grades for one year. These rules should be enforced by civil sanctions for contraventions, the report says.

To compensate people for their inability to take up appointments, the report says, the commissioner should be able to award former civil servants and ministers barred from accepting jobs an income calculated as a proportion of their previous salary, paid from public funds. The committee stressed that the level of compensation would need to be balanced against the cost to the taxpayer. But Jenkin is clear: “If we are going to make people subject to a ban, then we need to pay them gardening leave. They have to make a living.”

Professor David Miller, editor of campaigning website Spinwatch, calls the report’s recommendations “spot on”. He voices some doubts about the practicality of introducing measures to pay former civil servants gardening leave for two years, but backs the central recommendation, saying: “The call to abolish the committee and replace it with a stronger body is exactly what we suggested.”

Carswell is less sure that abolition and reformation in itself will solve the problem. “We don’t need another level of regulation,” he says. Instead, he believes that greater transparency is key to restoring public confidence in the system. “Of course former ministers should be able to go off and earn a living, even for the companies they were directly dealing with in government – but the quid pro quo should be that the details of exactly what you are doing for them should be made public,” he says.

The Cabinet Office says that it will consider the latest report’s conclusions – but it is quick to defend its record on maintaining standards in public life. A spokesman says: “Since 2010 we have strengthened the Business Appointment Rules for former ministers, civil servants and special advisers. Key changes include a two-year lobbying ban for all ministers and the most senior civil servants on leaving office, and the referral of applications from all special advisers to the independent ACOBA.”

Meanwhile, ACOBA itself points to moves it has made in opening up its work to scrutiny, including the publication of its minutes, its decision letters and better explanations of how it arrives at its recommendations. A spokesman says: “The committee had already taken a number of steps to increase both the transparency and speed of its operations where possible, and will of course consider what more it can do to promote greater understanding of its role.”

At the top, appetite for reform of ACOBA is weak – perhaps because so many ministers and senior officials plan to find lucrative jobs in business when they leave public service. Jenkin says: “We keep setting out what the objectives should be, but we are up against both front benches. There is a conspiracy to try to avoid scrutiny.” Miller agrees, saying: “A report on how the democratic system doesn’t work is at risk of foundering because the democratic system doesn’t work.”

Jenkin admits that his committee’s powers, like ACOBA’s, are merely advisory. But he promises to keep pushing the case for reform, revealing that the committee will soon re-examine the ministerial code itself. And in his opinion, ministers will not be able to bury their heads in the sand for much longer: “I would warn the government that if they wait for a former minister to become involved in another scandal, they won’t be able to say they weren’t warned.”

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