IfG calls for tougher rules on hiring departmental non-execs after Hancock affair

Think tank identifies “growing need” for stricter appointments regime and better transparency
Matt Hancock Credit: PA

By Jim Dunton

22 Jul 2021

Independent think tank the Institute for Government has become the latest organisation to call for a crackdown on the way government ministers are allowed to appoint departmental non-executives tasked with holding them to account in the wake of the Hancock affair.

Its new report says that around one-in-five current departmental NEDs have “significant political experience or party alignment”,  raising questions about whether they are in a position to offer the best “scrutiny and challenge on departmental progress”.

The IfG said former Department of Health and Social Care non-exec Gina Coladangelo – who stepped down from her role after her affair with then health secretary Matt Hancock hit the headlines last month – was not the only example of a NED hired “more for their political support and advice than their relevant experience”.

Coladangelo was a longstanding friend of Hancock who initially worked with him as an unpaid adviser on his unsuccessful bid to become Conservative Party leader in 2019, before being appointed to her DHSC role by Hancock last year.

The IfG cited Michael Gove’s appointment of Vote Leave ally – and former Labour MP – Baroness Gisela Stuart as a Cabinet Office NED last year, and Gavin Williamson’s appointment of  Nick Timothy, former chief of staff to Theresa May, to the Department for Education board as other examples.

Another high-profile appointment flagged was prime minister Boris Johnson’s appointment of Conservative Party donor Lord John Nash as the government’s lead non-executive director.

The report said there were “concerns that some ministers had appointed NEDs on grounds of political loyalty to use them as sources of political support – the role of a special adviser rather than a NED”.

It added that there were also “reasons for concern” about NEDS moving on to “explicitly political roles” after their appointment to departmental boards.

The IfG cited Lord Gerry Grimstone, Lord Theodore Agnew and Baroness Simone Finn as examples. Businesswoman Finn was a spad in the Cabinet Office, where she advised Francis Maude on civil service reform during the coalition government. She left her Cabinet Office NED role to become deputy chief of staff at No.10 in February this year.

“Such moves should be exceptional if departmental NEDs are providing independent scrutiny rather being seen as a step in a political career,” the IfG said.

“Routinely appointing former NEDs to political roles could give the impression that NEDs might be being rewarded for being acquiescent.”

The report said that Maude – now Lord Maude – had pushed the idea of departmental boards with non-executive directors as a way to bring in private-sector experience to drive improvements in performance and efficiency. But it said that ministers now had “flexibility to use departmental boards in a very different way than Maude intended”.

The IfG is calling for departmental NED appointments to come under the regulation of the commissioner for public appointments in the same way that appointments to other public boards do. It also wants preferred candidates to be the government’s lead NED to undergo a pre-appointment session in front of parliament’s Public Administration and Constitutional Affairs Committee.

Other proposals include a new transparency regime that would introduce checks on NED appointments with political experience – such as banning serving MPs, current spads, councillors and members of devolved parliaments from being non-execs – and increased transparency measures.

IfG senior fellow and report co-author Matthew Gill said the moves were vital for NEDs to fulfil their intended purpose.

“Departmental NEDs exist to provide independent scrutiny and challenge, so they must be seen as sufficiently robust and impartial to do so,” he said.

“There should be more consistent expectations of their roles and the existing process to regulate public appointments should also apply to them.”

Among the transparency improvements being sought by the IfG are a requirement that permanent secretaries ensure that every department publishes full information about each NED appointment process and its outcome.

Additionally, departments would be required to publish a readily available quarterly register of interests that includes each member of their departmental board.

The IfG is also proposing that the government lead NED and all departmental NEDs should be required to appear before parliamentary select committees if called, and that they should give evidence “independently and free from ministerial instruction”.

Last month, Labour Party deputy leader Angela Rayner and the Open Democracy campaign group called for reform of the current system for appointing NEDS.

Rayner argued that the Hancock and Coladangelo affair had underscored the extent to which the current system was “unfit for purpose”.  Meanwhile, Open Democracy said it had identified 16 NEDs with close ties to the Conservative Party out of a total of around 80 NEDs.

Last autumn, public appointments commissioner Peter Riddell said there were “growing concerns” about the lack of regulation of appointments for non-executive members of the boards of government departments.

“The original idea of bringing in people with business and similar experience from outside Whitehall has been partly replaced by the appointment of political allies of ministers, in some cases without competition, and without any form of regulatory oversight,” he wrote in a letter to Lord Jonathan Evans, chair of the Committee on Standards in Public Life.

In September 2020 members of Pacac questioned Cabinet Office perm sec Alex Chisholm over the impartiality of the four new NEDs at his department: Finn; Stuart; former Metropolitan Police chief Lord Bernard Hogan-Howe; and Henry de Zoete, who was a spad to Gove at DfE.

Committee chair William Wragg suggested that the new hirings may not “necessarily be seen as completely impartial” as a collective whole.

Chisholm insisted the new board members had not been shy to challenge Gove.

“It’s an opiniated group and an experienced group and a very diverse group and I’m satisfied they’re exercising a proper support and challenge function,” he said.

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