Select Committee on Public Administration Appendices to the Minutes of Evidence


Memorandum by Probity (PAP 60)

Patronage: The control of appointments and privilege in public life. Cronyism. Nepotism

  The House of Commons Public Administration Select Committee is undertaking an inquiry into the public appointments process in Britain. Probity, the campaign for integrity in public life, investigates corruption and malpractice. This paper is Probity's response to the three main questions posed by the Committee:

How well/fairly does Britain's appointment system work?

  1.  From an oligarch's point of view Britain's appointment system works both smoothly and efficiently. Our rulers control all important appointments in public and commercial life.

  2.  From a democrat's point of view Britain's appointment system is one of the worst in the developed world. Our citizens have no control over who runs the country—no control over the appointment or removal of business, government, legal, financial, social or political leaders.

  3.  Monarchs, dictators, fascists, communists and one-party states (Oligarchies) thrive upon systems of government that centralise power in the hands of a ruling elite. They do this by controlling who leads and manages the structures and institutions of public life.

  4.  Democracies thrive when power is distributed amongst the people—when the power to select and appoint leaders to public office lies with the electorate.

  5.  Britain is the only society in Europe which, in contravention of the law on Human Rights[17], is still governed by appointed, rather than elected leaders. With a monarchy, a privy council, the House of Lords, the judiciary, the civil service, landed gentry, powerful businessmen, a prime minister and a cabinet all holding positions in public life by appointment or birthright; patronage and cronyism dominate leadership appointments in every walk of public life[18].

  6.  In the one area of public life where the electorate has its say, the appointment of MPs, selection is dominated by political parties. In the past decade only two MPs have been directly "selected and elected" by their electorate. Party loyalty and government "whipping" cause elected representatives to give priority to the party line in preference to their fiduciary duty to their electorate.

  7.  Patronage leads to square pegs in round holes. The wrong person for the job. Many of Britain's top jobs in industry, commerce and government are held by incompetents and crooks[19]. Lacking the appropriate skills (merit) for the job, their appointment ensures low quality organisational performance. With no competition and a monopoly over their particular activity, Britain's outdated and inefficient institutions languish in comfortable but costly[20] co-existence.

  8.  Whether an appointment is fair or unfair depends upon the perception of the electorate. In a democracy the electorate consider an appointment to be fair when the winner is appointed after an open, competitive election by secret ballot. When an elector has a choice of several candidates, the opportunity to consider each candidate's manifesto, information on each candidate's background, skills and experience, a statement of the fee that they will charge for doing the job, and the opportunity to question the candidate on their policies, they consider the appointment to be fair and just. If any one of these factors is manipulated or absent the perception of fairness falls.

What changes are needed to the appointments system ?

  9.  Confirmation by the electorate that Britain wishes to operate a democratic public appointment system by secret ballot and competitive election rather than by patronage, cronyism and nepotism.

  10.  Statutory introduction of two tier boards in all public organisations. One (the legislature) to construct, manage and modify its constitution; and one (the executive) to formulate and implement strategy and plans.

  11.  Statutory introduction of an electoral appointment system for every public office in the country. Every "public" institution, including the House of Lords, must be required to specify in its constitution its electorate, the methods and time-scale of appointments to its legislative and executive boards, its reward system and its renewal and change methodology.

  12.  The replacement of Britain's outdated and unaccountable royal patronage system, where professions and businesses are granted royal charters, with a fixed-term parliamentary charter system with chartered institutions directly accountable to parliament.

What role should Parliament have in controlling appointments ?

  13.  Parliament's main role should be to encourage the growth of democracy[21] in Britain through the maintenance and renewal of national democratic governance processes.

  14.  Introduce legislation to support a countrywide, democratic electoral appointments system. Wherever aspects of individuals' lives are governed by the actions of institutions (businesses, professions, government etc), ensure that stakeholders have a say in the formation of their constitution and the election of governors.

  15.  Set up and monitor an appointments commission charged with:

    (a)  Managing and overseeing the elimination of patronage, cronyism and nepotism from all Britain's public institutions.

    (b)  Monitoring and encouraging progress towards an electoral appointments system in all businesses and institutions involving more than 50 stakeholders.

  16.  Introduce legislation eliminating royal charters and the privy council whilst introducing fixed term parliamentary charters.

SUMMARY

  Probity is concerned that Britain's outdated public appointment system is based on patronage and cronyism rather than on democratic merit-based electoral processes. This leads to incompetence and corruption in government institutions, militates against modernisation and reform, and institutionalises unfair and unjust government. We urge the committee to recommend radical changes to this government.

    Cronyism: The practice of favouring relatives, friends or supporters in conferring offices, making appointments or awarding contracts, honours and privileges.

AUTHOR

  Chris Coverdale, an organisation and governance consultant has been involved in business since 1964 and has been a company director since 1975. As a victim of two serious frauds he was disturbed at the authorities' blank refusal to act, and grew determined to investigate further. Those investigations showed that gold-collar crime[22] is widespread in business and government in Britain. Governors, directors and leaders regularly abuse their fiduciary duty and position in society to board the gravy train. Chris recently set up Probity to eliminate corruption and promote integrity in public life in Britain.

  Probity is a newly formed co-operative detecting, investigating and preventing gold-collar crime and promoting integrity in public life. We offer:

    —  A detection service. Leading corruption audits to uncover fraud and corruption in company boardrooms and governing bodies.

    —  An investigation service. Investigating mismanagement and suspect boardroom transactions, we identify the underlying systemic causes and recommend permanent solutions.

    —  A consultancy service. Working with stakeholders redesigning corporate systems to increase integrity and prevent corruption.

    —  A training service. Running seminars and workshops on corruption in Britain with ways of detecting, eliminating and preventing it.

    —  Information. Our web-sites contain information and advice on the nature and sources of corruption and "best practice" in its prevention.

  Probity needs your support. Any reader willing to help, support or join us and wanting to know more about us can contact us.

June 2002


17   The Human Rights Act 1998. The First Protocol, Article 3 states : The High Contracting Parties undertake to hold free elections at reasonable intervals by secret ballot under conditions which will ensure the free expression of the opinion of the people in the choice of the legislature. Back

18   PASC briefing notes indicate that 30,000 public appointments are made by ministers rather than by the electorate. Back

19   Probity has extensive evidence of corrupt practice by several leading businessmen and civil servants. Back

20   Probity estimates that outdated inefficient government costs UK taxpayers in excess of £200 billion pa. Back

21   Governance of the people by the people for the people. Back

22   Probity refers to corrupt practices by officials in positions of responsibility as "gold-collar crime". Back


 
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Prepared 8 July 2003