The chair of the Public Accounts Committee has warned that the high turnover rate of permanent secretaries and other senior civil servants is damaging the health of government departments and impeding accountability for government projects.
In her annual report, Meg Hillier said the average time in post for the current group of permanent secretaries is just two years and nine months, while the average tenure of all permanent secretaries appointed in the last 10 years is just over three years.
“I am concerned by the pace the revolving door of permanent secretaries is spinning,” she warned.
“The high churn of permanent secretaries, director generals and other senior civil servants is damaging the long-term health of departments, with ministers also moving frequently, departmental corporate memory is diminishing. High turnover has direct implications for accountability, making scrutiny of decisions on key government programmes more challenging as those responsible have long-since moved on.”
Hillier highlighted that the committee had recently taken action to call back officials to account for their decisions taken in previous roles, including recalling cabinet secretary Sir Mark Sedwill to give evidence on projects that he had overseen when he was Home Office perm sec. Sedwill recently gave evidence on the much-delayed Emergency Services Network programme and the department’s "compliant environment" policy, which had implications in the Windrush scandal.
“Ultimately, however, the civil service needs to address the high turnover of permanent secretaries and commit to a policy of consistent leadership,” Hillier added.
She also reiterated concerns about diversity, gender balance and ethnic minority representation in the senior civil service. “Women still under-represented at the most senior levels: only 43% of senior civil servants are women,” she notes.
“This is particularly evident to us on the Public Accounts Committee as we invariably take oral evidence from senior officials.”
Lack of direction
Hillier also raised concerns about the lack of ministerial directions for some Brexit spending, despite Treasury advice that ministers should issue directions to enable urgent spending that, if delayed, would jeopardise preparedness for EU exit.
In particular, she highlighted the lack of a ministerial direction in the Department for Transport decision to let a contract for additional ferry capacity to Seaborne Freight as “surprising”.
Last December, the department contracted three ferry companies to run extra crossings across the English Channel and the North Sea in the event of a no-deal Brexit to ensure the UK does not lose access to its supply of medicines and other critical goods. One deal, with Seaborne Freight, which owned no ferries, was scrapped after it emerged that the company would not be able to deliver the services it promised.
Although the National Audit Office revealed that DfT perm sec Bernadette Kelly had warned that the contracts were likely to face a legal challenge before it reached a £33m settlement with Eurotunnel, she told the committee that “my assessment, as an accounting officer, was that it met the requirements of managing public money [guidance] and therefore a direction was not required”.
But Hillier said Kelly's comments were "surprising" given that Seaborne's financial backer, Arklow Shipping, had only provided a letter of comfort after the contract was signed.
“In this area we once again see Brexit as a reason for a number of extraordinary decisions. I am clear that it should not be a reason for senior civil servants not to seek a clear letter of direction," she said.
"The electorate chose Brexit and the last three years have demonstrated some of the challenges of attempting to simultaneously prepare for departure with a yet to be finalised deal, and no deal. A ministerial direction clarifies who made a decision and who is accountable.
DfE tops concern list
Elsewhere in her report, Hillier named the Department for Education as the ministry that is concerning the committee most, due to “the continuing financial strain in schools, lack of grip over academies and failure to improve children’s social care combine to present a worrying situation”.
DfE is followed in the league table of concern by the Department of Health and Social Care, which topped the list last year.
Hillier said that “over the last three years, the sustainability of finances in the Department of Health and Social Care has been an ongoing concern”, adding that although the department’s 2017–18 annual report showed a balanced budget for the NHS, this has been achieved by using short-term fixes to tackle long-term problems. “Emergency measures do not generate sustainable strategies,” she said.
DHSC is followed by the Ministry of Defence, due to what Hillier called “a looming hole in its budget and an affordability gap in its equipment plan” that could range from £7bn to as much as £14.6bn.
The Ministry of Justice is also raising concerns due to “over-ambitious timetabling and poor project management at a significant cost to the taxpayer” of projects including its probation reforms, which the department acknowledged “had not delivered for the taxpayer all the outcomes that the public would expect”.
Next on the concern list, HM Revenue and Customs was described as “a department under pressure, and, in some areas, the cracks are showing”. Alongside longstanding problems with error and fraud in tax credits, Hillier criticised the department for not doing enough to improve the administration of Pay As You Earn taxation by some employers and pension providers.
The report also criticised HMRC, a critical player in preparing for Brexit, for its lack of communication with businesses, which may need to start making customs declarations in the event of no deal. “We were concerned at HMRC’s lack of plans to protect UK businesses in the event of a no-deal Brexit and its failure to communicate and engage with business about potential changes in customs rules and procedures. Its engagement with software developers to make the necessary system changes only happened very late in the day."
Brexit is also a pressing concern at the Department for Environment, Food and Rural Affairs, which Hillier said had been “unrelentingly confident in its preparations for a no-deal Brexit”.
She said Defra remained confident that there would be no food shortages in a no-deal scenario. “Nevertheless, the department admitted that vulnerable groups could be affected if food prices rose and that a significant disruption to the short straits crossings across the channel would reduce the availability and choice of some foods.
The Home Office is last on the list of concerns, with Hillier highlighting that the “human cost of the Home Office’s creaking systems was laid bare by the Windrush scandal”, when members of the Windrush generation lost jobs, benefits and access to health care.
“We found systemic problems within the department including a failure to protect the legal rights of the Windrush generation and poor-quality systems and data,” she said.
“The Home Office accepted that it should have understood the potential adverse effect of its policies on the Windrush generation.”