PACAC launches inquiry into Greensill lobbying scandal

Pickles warns of “much wider implications” if Cabinet Office cannot detail approvals given for officials’ second jobs
Lord Eric Pickles gives evidence to PACAC today

By Jim Dunton

15 Apr 2021

Parliament’s Public Administration and Constitutional Affairs Committee is to hold an inquiry into the Greensill lobbying scandal – the third probe into the government’s involvement with the collapsed financial firm to be confirmed so far this week.

PACAC chair William Wragg announced the move ahead of an evidence session with Lord Eric Pickles, chair of the Advisory Committee on Business Appointments. Pickles told MPs of his shock at learning the government’s former chief commercial officer Bill Crothers had been cleared to take up a role at Greensill as a second job while he was still a civil servant under an internal Cabinet Office process.

PACAC’s inquiry into Greensill follows Monday’s announcement of a lawyer-led inquiry into the development and use of supply-chain finance in government that will focus on Greensill Capital, which employed former prime minister David Cameron to lobby on its behalf. Yesterday, MPs on the Treasury Committee announced their own probe, which will look at “regulatory lessons” from Greensill’s collapse into administration last month.  

Wragg said his committee’s Greensill probe would be a “full inquiry into the topical matters” around the firm, founded by Lex Greensill, and that full terms of reference for it would be published next week.

PACAC members subsequently quizzed Acoba chair Pickles about conflicts of interest issues raised by Greensill’s close connections with government – most recently exposed by the revelation that Crothers was allowed to take up a role with the firm while he was still chief commercial officer.

“It’s fair to say, to misquote PG Wodehouse, my eyebrows did raise a full quarter inch when I heard about this,” Pickles said. 

“I look forward to receiving a full explanation in due course. I’ve been involved in public life a long time and I haven’t really come across anything like this before.”

Pickles told MPs it was “relatively common” for lower-ranking civil servants to have second jobs and to seek clearance for them from bosses. At Crothers’ level, the Acoba chair said senior officials might help Citizens Advice or sit on the board of a housing association or a health authority.

“If Mr Crothers had decided he wanted to have a milk round, I don’t think we’d be terribly worried,” he said. “But his particular position in terms of running procurement and working for a commercial organisation is  something that does require a full and frank and transparent explanation.”

Cabinet Office needs to ‘detail its decision process’

Earlier this week Pickles revealed that Crothers’ appointment as a Greensill director in 2016, after he left government, had not been referred to ACOBA for clearance because the Cabinet Office had not considered it to be a “new” role. It based the decision on the grounds that it had already given him the OK to work for the firm the year before.

Pickles, whose committee normally vets the appointment of post-government roles sought by former ministers and top civil servants for two years after they leave office, told MPs today that he was surprised by the explanation.

“It’s an interesting argument and I still have an open mind on it but at this point I can’t say I’m convinced by it,” he said.

“It did seem, talking to other colleagues who have been civil servants in the past, that they also shared my surprise. It seems to be a new thing, or a new excuse.”

In a letter to Cabinet Office permanent secretary Alex Chisholm earlier this week, Pickles called on the department to publish its conflicts of interest policy, detail the“historic and current” number of officials cleared to take up jobs under it, and to also publish an appropriate register of interests.

He told MPs today that he sincerely hoped the Cabinet Office would be able to document the decision process that approved Crothers to take up his role with Greensill at the same time as working as a civil servant and his subsequent appointment as a director.

“I would have expected a proper process,” he said. “I would have expected it to be recorded in a register, I would have expected it to be transparent and I would have expected the rules to be known. 

“So far as I know, the rules have never been published, which is why I have asked them to publish the rules. This is not a satisfactory situation: the wider public are entitled to know what these arrangements are, how they apply, what criteria is raised, what checks are raised and what conditions are made on an agreement to do so.” 

Cabinet secretary Simon Case yesterday told perm secs to inform him of all second jobs held by senior officials in their departments by the end of this week.

Pickles acknowledged to PACAC members that Case’s demand could have been triggered his letter to Chisholm. 

“If there isn’t a register, if there isn’t a clear record it will be an extraordinary worry,” Pickles told MPs. “There will be much wider implications than just what has happened now.”

He said government now needed to look “really carefully” at the boundaries for future employment placed on individuals who joined the civil service from the private sector and then chose to return. 

“Part of the problem we’ve got is that it has not been clear where the boundaries lay,” he said.

“In fact, I hope this doesn’t sound rude, but there doesn’t seem to have been any boundaries at all.”

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