Select Committee on Public Administration Seventh Report


8  Advice on ministerial interests

Permanent secretaries and advice to ministers

33. Section 5 of the Ministerial Code already provides a procedure for dealing with ministers' private interests. The ability of permanent secretaries to advise ministers on these matters has never been at issue. In fact the collegiate nature of this group, the most senior officials in Whitehall, who will face or have faced a variety of cases from incoming ministers allows for the informal exchange of experience, precedent and best practice. In fact, paragraph 5.2 of the Ministerial Code states that:

34. However, CSPL did recommend that permanent secretaries should exercise no responsibility for giving advice to ministers on conflicts of interest arising under the Ministerial Code. This was because providing this sort of advice risked putting officials in a difficult position with regard to their ministers.

35. The real question is not the source, or indeed the nature, of the advice but what happens when it is either ignored or just not sought. It is of course possible to strengthen the procedure further. An obvious and straightforward improvement would be to create a duty to declare ministerial interests to permanent secretaries. Instead of being "advised" to declare their interests as at present, ministers should be under an obligation to do so. Ministers coming into a department should be required to provide their permanent secretaries with a full list in writing of interests which might be thought to give rise to a conflict. Paragraph 5.3 of the Ministerial Code should be amended accordingly.

36. In addition, the position of a permanent secretary could be strengthened further by vesting in him or her powers akin to those of an accounting officer. In the latter case the rules state that where a minister in charge of a department is contemplating a course of action involving a transaction which the Principal Accounting Officer (PAO) considers would infringe the requirements of propriety and regularity, the PAO should set out in writing his objections and the reasons for them and his duty to refer the matter to the Comptroller and Auditor General and Treasury if his advice is overruled.[29] A procedure similar to that of an accounting officer's letter of direction, referring matters to the Cabinet Secretary and Prime Minister, could be devised for ministerial interests in the event that a permanent secretary's advice is disregarded.

The appointment of a ministerial adviser

37. Although the Government had agreed in principle to CSPL's recommendation to appoint an adviser on ministerial interests, the Prime Minister finally felt moved to act by the confluence of events and bad headlines which surrounded not only the Blunkett and Jowell cases but also allegations surrounding propriety, party funding and the honours system. We have reported separately on that.[30] On 23 March 2006, the Prime Minister announced the appointment of Sir John Bourn as the 'independent adviser on ministerial interests'.[31] In evidence to us Sir Gus O'Donnell was positive about the move and his role in bringing it about:

    I certainly strongly advised him that I thought this was the right thing to do, in that I think what we really need is someone who is involved right from the start of the process. So when ministers fill in their replies to the letters their permanent secretaries will give them, laying out their financial interests and any potential conflicts, there is one person who has all that information and has time to look at that, assess it carefully, and then have a relationship which is not the same as the relationship the Cabinet Secretary has with Cabinet members.[32]

38. Sir Alistair Graham, current Chairman of CSPL, was unsure about the role of the new ministerial adviser and how far it met CSPL's original recommendation.[33] In fact the full terms of reference were not deposited in the Library of the House until 16 May, when the Cabinet Secretary gave evidence to this Committee. These clarify his role to an extent and are more specific in suggesting that the Prime Minister "may ask the Independent Adviser to establish the facts in certain cases concerning the Ministerial Code and to provide private advice to him". The Prime Minister would "take account of the facts established by Sir John as appropriate". It would also be up to the Prime Minister to decide whether to make public Sir John Bourn's findings. Subsequent newspaper reports, however, have suggested this role may be more limited. In reference to investigations on whether the Deputy Prime Minister had breached the Ministerial Code, Sir John Bourn's spokesman was reported as saying that he was only mandated to advise the Prime Minister on the financial interests of ministers.[34]

39. Sir Gus O'Donnell sought to clarify the role when he came before us by explaining that "Sir John Bourn will look at all of those [matters] covered by his terms of reference, which is essentially section 5 of the Code [Ministers' Private Interests]"; adding "He will be a wide-ranging investigator, yes, but not all issues covered by the Ministerial Code will be appropriate for him to investigate, I think".[35]

40. The terms of reference given to Sir John Bourn are, at best, a half way house which recognise the existence of a problem but fail to provide a clear answer to it. A certain amount of confusion surrounds the role. For example, it is unclear whether its remit is restricted to ministerial financial interests or whether it can cover other aspects of the Ministerial Code. Similarly, it seems that any active investigation by the adviser will require an invitation from the Prime Minister and he does not appear to have the capacity to follow up any problems he may uncover. This appointment interposes a further layer of advice between ministers and their most senior officials but does not provide any of the additional powers necessary for discharging this task effectively.

41. We welcome the appointment of Sir John Bourn as Independent Adviser on Ministerial Interests as a small step towards adequate investigation of breaches of the Ministerial Code. We particularly welcome the principle that an Officer of the House should be asked to undertake this role, albeit in an independent capacity. This is consistent with our original proposals for the Parliamentary Ombudsman to undertake a similar role. However, we remain concerned that Sir John's role is limited; inappropriately weighted in favour of an additional layer of advice over that of Permanent Secretary; and lacks a genuine investigatory dimension.

42. Despite the rhetoric which usually surrounds the issue, objective evidence dispels any charge that ministerial conduct has fallen away from some imagined golden age of propriety. Standards of ministerial behaviour are higher, the rules much tighter, the regulation more extensive, the surveillance much closer, than they were in the past. All parties have contributed to bringing that about and making improvements to the Ministerial Code. Public expectations are consequently higher. Yet we cannot become complacent. Making provision for an independent investigatory mechanism for alleged breaches of the Ministerial Code is long overdue. Its establishment would benefit not just public confidence but also the interests of the Prime Minister, the government and especially those at the centre of allegations who deserve a fair hearing.

43. The Ministerial Code is now established as the public framework of rules against which ministerial conduct is judged. That is a positive development. However, it also means that it is regularly invoked, by opposition politicians and the media, to sustain attacks on ministers, without there being any mechanism to investigate whether such attacks are justified. This is why it is puzzling that governments have resisted attempts to establish an independent investigatory mechanism for the Ministerial Code, to which allegations can be taken. Those making such allegations would then have to put up or shut up. It would not interfere with the political accountability of ministers, or with the political responsibility of the Prime Minister for the fate of ministers; but it would reduce the regular frenzy and provide a more informed basis upon which political judgements can be made.


29   Government Accounting 2000, Annex 4.1, para 16 Back

30   Public Administration Select Committee, Fourth Report of Session 2005-06, Propriety and Honours: interim findings, HC 1119 Back

31   HC Deb, 23 March 2006, col 33WS Back

32   Oral evidence taken before the Public Administration Select Committee on 16 May 2006, HC (2005-06) 884-v, Q 249 [Sir Gus O'Donnell]  Back

33   Oral evidence taken before the Public Administration Select Committee on 27 April 2006, HC (2005-06) 884-iv, Q 194 [Sir Alistair Graham] Back

34   'Prescott to escape scrutiny over affair', The Guardian, 25 April 2006 Back

35   HC (2005-06) 884-v, Qq 252 and 253 Back


 
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