Public Administration Committee - Minutes of EvidenceHC 404

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Oral Evidence

Taken before the Public Administration Committee

on Wednesday 25 April 2012

Members present:

Mr Bernard Jenkin (Chair)

Alun Cairns

Charlie Elphicke

Paul Flynn

Robert Halfon

Kelvin Hopkins

Greg Mulholland

________________

Examination of Witness

Witness: Rt Hon Francis Maude MP, Minister for the Cabinet Office and Paymaster General, gave evidence.

Q412 Chair: Welcome to this session of the Public Administration Select Committee on this miserable spring morning. Will you identify yourself for the record?

Mr Maude: I am Francis Maude. I am the Minister for the Cabinet Office.

Q413 Chair: You can be grateful that we have not actually started taking evidence on our inquiry into the role of special advisers this morning, so we might not be covering that topic. Could we start by asking you for any early thoughts you might have about our latest report on strategic thinking in government?

Mr Maude: I have only just briefly seen it, and I have nothing to comment on at this stage.

Q414 Chair: Can I convey to you why we keep coming back to this subject with a couple of anecdotes? When we produced our report yesterday, the Cabinet Office immediately responded with the comment that the Government’s objectives are very clear: they are-and the first words were-about deficit reduction. Yet of the six strategic aims furnished to us by the Minister of State, Mr Letwin, for the purposes of this inquiry, none mentions deficit reduction. It is this lack of connection between what the Government state in public and what they write down in a document that underlines that there is a lack of coherence at the heart of their overall strategy.

Mr Maude: I do not believe that there is a lack of coherence. I think it is perfectly clear.

Q415 Chair: Another minor example: Simon Fraser kindly sent to me a copy of his capability review in the Foreign Office. He identified 14 challenges for the Foreign Office. I am sure you would agree that one of the Government’s overall strategic objectives is to promote UK trade. None of those 14 challenges mentions such promotion. It does not seem, therefore, that there is a cross-departmental feel to the Government’s overall strategic direction.

Mr Maude: There may be confusion about what you mean by challenges and what you mean by strategy, and people interpret them in different ways. I do not know the context in which Simon Fraser said there were 14 challenges or whether those are particular problems that need to be resolved. I don’t know the context so I can’t comment.

Q416 Chair: We will move on, but perhaps that helps you to understand where we are coming from on this.

Mr Maude: No, I don’t really.

Q417 Charlie Elphicke: The Committee has published a report on strategic thinking. Wider than the issue of strategic thinking in government, is getting government to act in a coherent way. Increasingly, people are saying, "The No. 10 operation is underpowered and has been so for a long time." If you look at strong central operations in the States or in France, the chief executive of each of those nations has much more direct numbers of people to enforce the will of the Government. Is there a case that the Cabinet Office should not say to the Secretary of State, "Please would you mind awfully?", but should be the Prime Minister’s office, which says, "You will do this and you will follow the Prime Minister’s and the Government’s vision and fall into line"? We would not, therefore, have permanent secretaries and civil servants deflecting the Government’s sense of vision and mission.

Mr Maude: We have something called Cabinet Government in this country. Major Government decisions are made by the Cabinet collectively and are implemented by Departments, reflecting that. The Prime Minister is the Chairman of the Cabinet and the leader of the Government, and we are a Cabinet Government. The debates about whether there should be a Prime Minister’s department have been going on since well before the far-off days when my political career began. No doubt, they will continue well beyond the point at which all our political careers have ended. There are powerful arguments about it, which will no doubt resonate for decades to come.

Q418 Charlie Elphicke: Once the Cabinet has taken a view-let us say that, at Cabinet, the Prime Minister says, "I want to do this", the Chancellor agrees and the rest of the Cabinet fall into line, is there not a case that the Cabinet Office should be the enforcer? Even if you do not want to make it a Prime Minister’s department, to what extent is the Cabinet Office able, under the current regime and constitutional arrangements, to enforce the Government’s will and vision on Departments to make sure that they do what they are meant to be doing?

Mr Maude: You say the rest of the Cabinet fall into line, but we have Cabinet government. Decisions are made collectively, whether in full Cabinet or in Cabinet Committee. Once decisions are made, they are to be implemented. It will generally be for one or a small group of Departments to take charge of the implementation. When decisions have been made by Ministers, they have to be implemented effectively, efficiently and expeditiously. It is the role of Departments, and the Ministers in charge of those Departments and the permanent secretaries who are accountable to Ministers, to make sure that those decisions get implemented in a way that is efficient, effective and timely.

Q419 Charlie Elphicke: Do you think that we should carry on like that or do you think that we should beef up the central operation and the ability of the Government centrally, through the Prime Minister, whom people in this country see as the leader of the Government, being able to enforce the will?

Mr Maude: Indeed.

Q420 Charlie Elphicke: Is it not the case that that should now be looked at again?

Mr Maude: I think we have good mechanisms for ensuring that decisions get implemented, but, at the end of it, responsibility for implementing decisions lies with Ministers and the officials who report to those Ministers.

Q421 Chair: We would argue that the pressures and challenges faced by modern Government-the complexity of modern Government and the fact that we live in a network world in a network nation-mean that the Government need to become more of a network. The Government are implementing an extraordinarily ambitious set of reforms against an extremely difficult economic background. The system is being more challenged than possibly at any time since the second world war. In addition, there are the extraordinary pressures of public scrutiny and media pressures, the 24-hours news agenda and everything.

Paul Flynn: Are you giving evidence, Mr Chairman?

Chair: You are very kind. My question is: does the system, which really has not evolved much since the 1950s, need revisiting? Every single one of our reports comes back to this question about there being a requirement for a stronger centre of Government that has a more coherent view of the strategic direction of the Government. Is this something that is exercising minds in Downing street?

Mr Maude: There have constantly-continually-been voices urging a stronger centre with a stronger central direction. Equally, there have been powerful voices saying devolution and decentralisation are the order of the day and empower Departments more. The short point is that there are some things in any big, complex organisation that need to be quite rigorously controlled at the centre, and strategic direction is one of them. In our system, that is arrived at collectively under the leadership of the Prime Minister. That is the right way for that to happen.

A whole lot of other things need to be controlled centrally, a number of which are the kind of boring operational things that sit in my Department, where we have for the first time ever proper controls that enable arrangements to be made in a way that are for the benefit of the Government and the taxpayer as a whole, rather than in the short-term interests of a particular Department. A whole load of things such as property dispositions, buying of common goods and services and IT infrastructure, which your Committee has taken an interest in, have to be centrally controlled. Responsibility for other things should be pushed as close to the front line as possible. Ministers and their officials, particularly the permanent secretaries who have to take responsibility for ensuring that Ministers’ decisions are implemented effectively, efficiently and in a timely way is the way it should operate.

Strong centre, yes, but not a centre that claims to be able to micromanage everything from the centre. That model was tried under Tony Blair. With the things that I am talking about, no attempt at all was made to control those, and they should have been. Actually, constant attempts to micromanage operational delivery from the centre failed as well.

Q422 Chair: Before we move to the main part of our evidence today about ACoBA, there are two other areas we would like to cover. One is about the reaction to the effect on charitable giving following the Budget.

Q423 Kelvin Hopkins: Minister, the Giving White Paper, published in May 2011, pledged to make it easier to give money to charities, and spoke of the 2011 Budget as giving "priority to helping build a more philanthropic culture, through powerful new tax incentives". What has changed in the last year?

Mr Maude: Nothing has changed. We are very much in favour of strengthening the culture of philanthropic giving.

Q424 Kelvin Hopkins: The Budget seemed to go against that.

Mr Maude: You will have noticed, no doubt, that we have enlarged the space in which community interest tax relief operates, for example, following representations from the sector.

Q425 Kelvin Hopkins: Some people on my side of the political divide suggest that rich people should pay their taxes and make donations to charity on top of that.

Mr Maude: So you are not in favour of tax relief on charitable donations?

Q426 Kelvin Hopkins: I am in favour of rich people paying taxes and using much of their largesse to make donations as well.

Mr Maude: So you are saying that that is the view from your side of the political dimension and that you are against tax relief on charitable donations. That is an interesting development.

Q427 Kelvin Hopkins: What evidence is there that donations have been made to non-UK charities to avoid tax rather than in the spirit of genuine philanthropy?

Mr Maude: You would need to pursue that line of inquiry with the Revenue. I cannot possibly know what tax arrangements have been made. You have heard what the Chancellor has said about this: it is our aim collectively as a Government that we do not want the effect of this measure to impact on large donations to charities that are dependent on them. Given that this is not an immediate measure intended at any stage to have immediate effect, there will now be discussions about how to meet the concern that there has been while not impacting on the scale of philanthropic donations.

Q428 Kelvin Hopkins: Tax reliefs to the wealthy and to the corporate world are very substantial-the gross figure is very large. Is this not rather difficult when the Government’s primary objective is apparently deficit reduction?

Mr Maude: Why?

Q429 Kelvin Hopkins: Rather than giving tax reliefs to wealthy people and large corporations, would it not be more sensible to reduce those tax reliefs and use that cash to hopefully reduce the deficit, which the Government seem so concerned about?

Mr Maude: But we are in favour of supporting-I thought this was bipartisan and I am slightly surprised to hear this note of dissent-

Q430 Kelvin Hopkins: Perhaps I speak for myself, but I represent a view that I have found with other colleagues.

Mr Maude: Okay. That is interesting and that is a change, which we take note of. We are emphatically in favour of those words you quoted from last year: we support a culture of philanthropic giving and we will carry on doing that.

Kelvin Hopkins: Well, we are all in favour of philanthropic giving, but there is paying taxes as well. One more point-it is a simple one-which we have made before in this Committee, before the last election and on a number of occasions, is: can a Government of any colour seriously justify tax relief for public schools?

Chair: I really think that that is beyond the scope of our questioning at the moment.

Kelvin Hopkins: Well, the point has been made before and I am making it again.

Q431 Chair: I do not think that we will pursue that now.

Minister, I am sorry to press you on this, but the Cabinet Office is responsible for the charitable sector-the third sector.

Mr Maude: Indeed.

Q432 Chair: Was the Cabinet Office consulted about these changes in the tax system before they were announced in the Budget?

Mr Maude: The Chancellor is responsible for Budget measures and I will not go into the process that lies behind it.

Q433 Chair: I take that as a no.

Mr Maude: You take it however you like. You asked me a question; I will give you an answer. I have been a Treasury Minister, intimately involved in drawing up Budgets, albeit many years ago, and I will not go into the process that lies behind the drawing up of Budget measures.

Q434 Chair: But if the concern is about tax relief to non-UK charities, why do we not just limit our tax reliefs to UK charities that are regulated by the Charities Commission and governed by UK legislation?

Mr Maude: That is a very interesting suggestion.

Q435 Chair: Could it possibly be that we are not allowed to do so under EU rules?

Mr Maude: I don’t know.

Q436 Chair: But you are the Minister responsible for charities.

Mr Maude: I am not the Minister responsible for tax. It is an interesting suggestion, I will look at it and I do not have an immediate answer. I have actually come here to talk about something completely different, although I am willing to talk about anything. I am in your hands.

Q437 Robert Halfon: Can I ask you a quick question about the big society? In your response to the report on the big society, you said that the Government will consider how policies impact on the big society. Will that be a serious consideration and have you thought about how that might play out?

Mr Maude: It is a serious consideration. I am obviously happy to answer questions about anything that you ask about. Around the time that this became a subject of intense interest-it was some little time after the Budget-we also announced the launch of Big Society Capital, which is the world’s first social investment bank, sought after by the charitable sector, the voluntary sector and social enterprise sector for many years. It was talked about for 10 years by the previous Government and was implemented within two years by this Government, without a single penny of taxpayers’ money involved.

Q438 Chair: Moving on, before we come to ACoBA, there is the question of IT. We are pleased with the general direction of the Government’s capabilities here, but we are still concerned about legacy IT systems.

Mr Maude: Yes, so am I.

Q439 Chair: You have resisted our recommendation that the Government develop an overall strategy to either replace legacy systems with new, less costly systems, or open up the intellectual property rights to competitors. You are leaving that to individual Government Departments to deal with in their own way, which suggests that the problems will go on. Why is that? Could you give us an explanation?

Mr Maude: We have made it clear that we are willing to reopen existing contracts, and we have already started that process. You will have seen the announcement that the Aspire contract-HMRC’s main IT contract-where there was a wholesale outsourcing, has been significantly reopened. There are significant cost savings arising out of price reductions in that renegotiation.

In addition, and more significantly, the exclusivity clause in the contract, which meant that any new development work in IT in the Revenue had to be given to the Aspire contractors, has been removed, so that any new work, which is a significant amount, is available to be opened up for competition. Obviously, the Aspire contractors would be able to compete but would not be guaranteed to get the work. That will lead to a very significant reduction in cost and an addition of flexibility and agility to the Revenue.

One thing that will happen as a result of that is that some people who had been outsourced from the Revenue into the Aspire contractors will be brought back in-house, because the Revenue had lost too much of the ability to be an effective customer and was too much in the hands of these outsourced contractors. That was a harbinger of things to come and a significant move away from dependence on what I think your Committee has described as the oligopoly of major providers.

Q440 Chair: I am very encouraged by what you are saying, but it would still be comforting for us to feel that you have an overarching feel for how these legacy systems should be addressed. There should be lessons learned across Departments, and they should be fed back to each other. That should be expressed, dare I say it, in some kind of strategy.

Mr Maude: Yes, you have a great affection for strategies, and I have a great affection for getting on and doing things. We have got on and done this quite quickly with quite significant results, and this is only the beginning.

Chair: We do commend you on the work you are doing on this.

Q441 Charlie Elphicke: Does the quite frankly brilliant job that you and your colleagues in the Cabinet Office have done on IT not highlight the success you can have if you have a clear enforcement function in the Cabinet Office of the kind that I referred to moments ago? To my mind, that is a showcase of what you can do when you unleash the Cabinet Office to enforce what is done in Departments and bring them all into line. Do you agree with that?

Mr Maude: It fits within what I have previously described as the tight-loose balance. There are things you control tightly, and there are things that should be very loosely controlled and where responsibility should be pushed out. ICT infrastructure has to be tightly controlled. The way it was done in the past was wholesale outsourcing, Department and organisation by Department and organisation, with no requirement imposed from the centre on interoperability and connectivity.

We have these huge legacy systems that are very opaque and very impenetrable, and that make it very hard to know what we are paying for telephony, desktops and a whole lot of other things within those contracts. That is what we are seeking to change, and we will then seek to be quite militant about enforcing standards on the things that we care about, such as connectivity, and ensuring that we can disaggregate things such as telephony, desktops and so on, where we would want to make arrangements and be buying across the piece, because these are essentially commodity goods and services. We can do these things very much better. It is absolutely essential that for those things-as with property-you have an overarching set of powers and controls. You have to have tight controls there, but beyond that, you want to push responsibility back into Departments.

Q442 Chair: I am grateful to you for being a Jack of all trades this morning. We will move on to the ACoBA inquiry now. One of the early thoughts we have had during this inquiry is that we ought to be moving our regulation of the business appointment rules on to some kind of statutory footing. That reflects the experience in other countries, particularly Canada, where we were introduced to their Conflict of Interest and Ethics Commissioner, who works within a statutory framework. Is that something the Government would be prepared to consider?

Mr Maude: Obviously, we will look at any recommendations the Committee makes, as we always do, with great respect and interest, and we will want to reflect on them. My approach tends to be that if something is not obviously broken, you should not necessarily try to fix it. There is plenty that is broken and needs fixing. It is not obvious to me, but we will wait to see what your Committee concludes, having heard lots of evidence from all sides of the argument about the way in which ACoBA works.

Chair: Our questioning will demonstrate that quite a lot of people think that the system is a bit broken in this country, and that is no criticism, nor does it reflect badly on the chairman of ACoBA and his team. It is just that it is not fit for purpose and does not command the necessary public confidence. This also rather reflects our view of the independent adviser on ministerial interests. Mr Flynn, you might want to raise that issue at this particular moment.

Q443 Paul Flynn: Yes, I do. One of the reforms that took place under the last Government was the introduction of the independent adviser on ministerial codes. That was implemented once in the last Government, and the person involved was found not guilty. There has been a great deal of unhappiness-including from the holder of the office last time-about the fact that the inquiry into the Secretary of State for Defence and his adviser was inadequate, and probably illegitimate, because it was not conducted according to the ministerial code. It was not conducted by the independent adviser, who said he should have conducted it. The Chairman of the standards committee said he should have conducted it. We feel it was done over a quick period, almost over a weekend-a matter of days-by a civil servant who produced a report that was inadequate in many ways. There is a great deal of concern about this. If we follow on from that, we know that the independent adviser resigned-

Chair: Are you giving evidence, Mr Flynn?

Paul Flynn: Yes, okay, I am. You are allowed to question me on this afterwards. Under the previous Government, this Committee asked for pre-appointment hearings for those appointed independent adviser. We do not have that system, but we had a virtual pre-appointment hearing, which members of this Committee took that way, and we questioned the replacement. I think the message has been conveyed to you that Committee’s view is that the new appointment does not have the robust independence that we regard as necessary. Are you going to ensure that his appointment is discontinued?

Mr Maude: No.

Q444 Paul Flynn: Why?

Mr Maude: Well, it is not my appointment, for a start. This is an adviser to the Prime Minister. The Prime Minister writes and disseminates the ministerial code. He appoints an adviser to advise him on the code and compliance with it.

Q445 Paul Flynn: Don’t you give advice to the Prime Minister on this?

Mr Maude: On what?

Paul Flynn: On the suitability of the new appointee.

Mr Maude: I have no reason to question the suitability of the appointee, whom I have known for a long time. I am extremely aware of both his independence of mind and ability to express his view robustly; I know he will do that.

Q446 Paul Flynn: Isn’t it a difficulty that you have known the person for a long time?

Mr Maude: Why?

Paul Flynn: Doesn’t it reinforce the view of cronyism in government if you are appointing people who you know have been saying, "Yes, sir; no, sir; three bags full, sir," to politicians over the years to take tough decisions involving politicians? He appeared before this Committee and we questioned him at some length, and the Committee’s view, which I believe may be unanimous, was that he is not the person for the job. You can disregard the view of the Committee, but do you think the Prime Minister should?

Mr Maude: He is not there to make decisions. He is there to advise the Prime Minister. The title is adviser to the Prime Minister on the ministerial code.

Q447 Paul Flynn: The last time you were before this Committee, you disagreed with my suggestion that the Government were creating an ineptocracy. Have you had a chance to revise that view in light of the almost daily disasters that have come from Government policy, including one in which you were involved, which resulted in a wholly unnecessary, Government-created panic about a petrol shortage?

Mr Maude: No.

Robert Halfon: On a point of order, Mr Jenkin. What does that have to do with business appointments?

Paul Flynn: The witness has said that he would talk about anything. You must not see yourself as a guardian.

Mr Maude: I have given my answer: no.

Q448 Chair: The purpose of raising this question is that we are waiting for the Government’s response to our inquiry, "The Prime Minister’s adviser on Ministers’ interests: independent or not?", and we look forward to that response. We feel that this question of the independent adviser on ministerial interests overlaps with the conflict of interest question relating to business appointment rules.

Mr Maude: I understand that.

Chair: We want to draw that to your attention, and I do not think we need to pursue that further at this stage. The point has been made that, for all your respect, which we share, for the individual in that post, who is a most distinguished public servant, we do not feel it is likely that he will command public confidence in that role as an independent adviser. The Prime Minister can appoint as many advisers as he likes, but whether they are independent and can command public confidence in that role is another question.

I think we will move on. Is that all right, Mr Flynn?

Q449 Paul Flynn: It is not all right. I did not hear the answer to the question of whether Mr Maude is apologetic for his contribution to the fuel panic.

Mr Maude: That was not the question you asked.

Chair: That topic is not for discussion today.

Paul Flynn: Well, Mr Maude said that he would talk about anything.

Chair: No. If you wanted to raise that, you could have raised it before. We are not going there now. Could you ask about the appearance of-

Paul Flynn: I appreciate that you are friends together. We have a Conservative little triangle here trying to protect the witness, which is not the purpose of the Select Committee. This is a matter of great concern. The country was put to enormous inconvenience by the witness before us. Will he apologise for his behaviour?

Chair: Mr Flynn, if you wanted to raise that matter, you could have raised it in the pre-meeting, so that we could discuss how to raise it. You did not do so.

Paul Flynn: The pre-meetings are between ourselves. I do not really want to reveal what goes on in the pre-meetings, but your idea of a pre-meeting is to- the two of you are pals. You dine together.

Q450 Chair: I do not wish to prevent Mr Maude making a comment on this matter, if he wishes to do so.

Mr Maude: I can see how incredibly shocking it is that colleagues should talk to each other.

Paul Flynn: That is not the point. It is shocking that points of order are accepted by the Chair to stop me asking a question, or to prevent you from answering a legitimate question. You upset the country greatly-you personally. You made a statement that possibly led to an accident. Are you going to apologise for that?

Charlie Elphicke: That is outrageous.

Robert Halfon: On a point of order, Mr Chairman. What does the petrol issue have to do with the business appointment rules?

Paul Flynn: The witness said that he is willing to talk about anything; he is clearly not.

Chair: Mr Flynn, I am calling you to order.

Paul Flynn: If we-

Chair: Order. Can we concentrate on business appointments?

Paul Flynn: Well, we could if you decided to conduct this Committee in a fair way. This Committee had a good reputation, and under you it has lost that reputation. Unless you are willing to allow fair questions to be asked, as the witness suggests, there is not much point in conducting the business of this Committee.

Chair: I do not wish to suspend the Committee, but I would like you to ask your questions about the business appointment rules.

Q451 Paul Flynn: There is a suggestion from the Department that gardening leave should be used to soften the blow when ACoBA decides to take action against individuals, or that they should be allowed a period in which, if they are seeking appointments in areas in which they worked previously, they can continue to work-without making any contribution to the work of their Departments, but continuing to be paid. Do you think this is a sensible suggestion? Do you think this would be acceptable to the public?

Mr Maude: If people are in the middle of their working life-if they have come into public service and they are leaving public service-and are told by one part of the state that they may not take another job, it is a matter of absolutely basic fairness that a civil servant who is in that position and is told, "You may not take another paid role for which you are suited" should be paid. That is universal practice in the private sector. If there is a conflict of interest and a previous employer says, "You may not take up your new employment because of the conflict point," then there is an absolute moral obligation to continue to pay that person during the period in which you have said that they may not take up new employment. Are you really suggesting that if we want to get the best people into public service, which I do, we should treat them in that way? I am astonished to hear the suggestion.

Q452 Paul Flynn: Let us make it clear that you are saying that if someone wishes to take up a probably lucrative appointment in which they can offer their expertise, their confidential knowledge, and their contacts with people still working in the Department, and they are willing to capitalise on that, if a delay takes place, they should be rewarded and paid for work that they are not doing?

Mr Maude: I find it very distasteful, frankly, that you use such contemptuous and pejorative language to describe people who have made a decision to come into public service, as you and I have done, and who then leave public service to go on and do something else. I want the best people to come into public service, and we have a poor record in this country of making a success of people coming into, for example, the Civil Service from outside and then being able to leave it. I want the best people to be encouraged to do that. There are plenty of circumstances where it is completely proper, when a person leaves to go to another job, to say that there is a waiting period before they can take that job up. That is completely proper and would happen in many other circumstances, but in those circumstances if we, the state, are saying, "You may not, when you leave the state’s employ, take up another job," we have an absolute moral obligation-I am astonished to hear the question, frankly-to continue to pay people while we are denying them the opportunity to be paid somewhere else. I am astonished.

Q453 Paul Flynn: I find your astonishment astonishing. You seem to be in a prickly state this morning, and you are giving another acting performance, between us, that would be worthy of the Old Vic. Could we go on to why we are concerned about ACoBA, which is a pretty ramshackle organisation? It is very weak and not effective. Civil servants come before us saying that they did not even realise that they had to go to ACoBA. The great concern is that while Ministers, senior civil servants, admirals and generals are in office, they might be working not entirely in the public interest, but in order to feather their nests with a retirement job. Is it of concern to you that this might be going on, and that ACoBA is a very weak instrument for discouraging it? People can have their gardening leave, or go off and sell their secrets and so on. This applies to past Ministers as well, to a great extent.

Mr Maude: I have to say I find the way in which you express yourself about the motives of people who have devoted themselves to public service to be lamentable.

Q454 Paul Flynn: You have already said that.

Mr Maude: Yes, but you are continuing to do it. I think it is a really bad signal that a senior Member of Parliament should talk about people in the public service in that kind of way. I think it is actually a really bad signal.

Q455 Paul Flynn: We are talking about politics here.

Mr Maude: No, you are not talking about politics. You are talking about people in the armed forces and in public service. People who go into public service, as you and I have done, most of them I think do so from high motives, not base motives. I will continue to tend to attribute good motives to what people do rather than malign ones.

Paul Flynn: You can indulge in this pompous-

Chair: Last question.

Paul Flynn: It is not the last question, Mr Chairman.

Chair: We need to move on.

Q456 Paul Flynn: You can indulge in this pompous preaching just to avoid the subject. We are not inhabited by a world of saints. If we take just Ministers-I particularly have Ministers in mind-Ministers, when in office, have very powerful influence and decisions to make, sometimes involving billions of pounds. What happens when a Minister who chooses company A over companies B and C, on leaving office, goes to work for company A on a huge salary? Is that not worthy of investigation and concern? Does it not mean that unless we do something to stop that happening, there may well be Ministers now who are not 100% devoted to public service, but devoted to making sure that they get their haciendas in Spain when they retire?

Mr Maude: That is what ACoBA exists to protect against.

Paul Flynn: And fails to do.

Mr Maude: Give me some evidence that it has failed to do that. Give me some evidence of Ministers who have feathered their nests in the way that you have described.

Paul Flynn: I think you should read more widely.

Mr Maude: If you are going to make these allegations, substantiate them.

Paul Flynn: You are tempting me.

Q457 Greg Mulholland: Minister, the Committee has concerns that the system is not as robust as it should be, and that not all cases are recorded or the outcomes known, which must, I am sure you would agree, be something that could be improved on.

May I ask specifically about the period covered by ACoBA? It is currently two years. How was that arrived that? Do you think that that is the right duration after someone has left office? How does that fit with other EU countries such as France, which has a three-year ban as standard?

Mr Maude: I do not think there is any kind of magic about it. Is two years perfect? Would three years be perfect? The Prime Minister, when he took office, asked the committee to give its advice on exactly that subject. The view of the committee-I have no idea whether it was unanimous-was that two years was the right length of time. Is that set in stone for ever? Nothing is set in stone for ever, but that was the view of the committee that deals with these issues on a continuous basis. If there is evidence that another period would protect against the mischief that we are seeking to protect against, we will obviously listen to that, and the committee would want to look at that, no doubt.

Q458 Greg Mulholland: Do you think it is worth looking at making the system slightly more flexible and considerably more intelligent? By that I mean suggestions that we have had, where two years could be the basic period, but in other cases it might be, as Lord Lang himself suggested, up to five years, and in particularly sensitive cases-we are talking about cases where perhaps Defence Ministers were involved in awarding huge military contracts and Health Ministers awarding contracts to private health providers-there should be a lifetime ban. Do you think that that, in those specific cases, would give the public the confidence that certainly we have identified is not there?

Mr Maude: I do not think it is a question of there being a ban, but a period in which you must take advice, and that advice would be public. There is obviously flexibility within that two years, because there are plenty of circumstances where actually the committee will be really relaxed from the outset and others where the exposure during the tenure of office to particular companies might lead you to say that it should be a longer period. We will obviously want to look at suggestions made on that.

Q459 Greg Mulholland: Do you not think that in those cases where huge contracts are awarded that there is a case, as Transparency International has said, for a lifetime ban on people working specifically for those companies-not in the sector, but only specifically for those companies?

Mr Maude: We can look at that, and you will have a view on that. I think that we should beware excessive rigidity. When a big contract is awarded, there are a huge number of people involved on the Government side in awarding it. This is a very strictly controlled, pretty objective process under EU law, and are we really to say that anyone who has been involved in that process is to be debarred for life from ever having a commercial relationship with that supplier? I would struggle with something that was as rigid as that. Is it a matter of concern that the Committee should look at? Absolutely.

Q460 Greg Mulholland: Finally, to go back to Mr Flynn’s point, four Ministers have gone on to work for companies to whom they have awarded significant contracts, and I think that that is the area of public concern and we obviously have to share that thought with you.

Mr Maude: Okay.

Q461 Alun Cairns: Minister, Mr Mulholland talked about a lifetime ban and there have been various spurious allegations and taking of press reports as fact in terms of criticisms of previous people who have left public life and gone into the private sector. Does this send a dangerous signal to the people who Government are seeking to attract into the public sector? Do you not think that the talk of a lifetime ban is merely wholly impractical, not only because of EU legislation, but simply because it is wrong to curb opportunities in such a way?

Mr Maude: There are two very desirable objectives here. First, we have to make coming into the public service-particularly when we take a different view from the previous Government, who thought that you absolutely had to offer salaries and pay packages that were completely competitive with the private sector to those coming into the public service. We do not take that view. We take the view that with people coming into the public service for a time at senior levels, because there is an opportunity to do things on a big scale and make a big difference, we should not need to. And we do not actually need to offer salaries that are completely competitive with the private sector.

We want good people to come in because the public service depends on talented, energetic people and benefits from the injection of people from outside the civil service, in the case of what I am responsible for, and we need to make a success of it. We need to have that desirable objective in mind and not make it look like anyone who comes into public service is doing so for selfish reasons, because that is the reverse of the case generally. We should not have a regime that makes it look like if you leave the public service, you are doing so for the kind of motives that Mr Flynn seemed to be assuming were commonplace.

The second really important objective is the avoidance of conflicts of interest or the perception of conflicts of interest. We have to guard against that. Public confidence is important, and the relationship of the state with suppliers is also important. Suppliers biding for Government work need to be confident, and I think that they are, that contracts are awarded based on merit and value after an objective and properly controlled process-rather quicker than they have tended to be in the past, I must say. We need to protect those processes and the perception that we are pretty strict about conflicts of interest.

Chair: We have only 40 minutes left and we need to get into some of the detail.

Paul Flynn: Membership of ACoBA-

Q462 Chair: We are dealing with the legislation point. Can I just make the point about the Budget Responsibility and National Audit Act, which received Royal Assent on 22 March last year? That Act puts into legislation specific restrictions on Comptrollers and Auditors General, and bans them from taking up certain appointments on bodies they have audited after holding such a role. This reflects the similar statutory restrictions that exist in France, where a three-year ban is applied. Is there not a case for considering that principle, which we have already enshrined in legislation, for other public offices?

Mr Maude: I hear the suggestion. We would need to be persuaded that the current system, which involves quite detailed scrutiny of potential appointments, does not provide sufficient protection. If there is compelling evidence that that does not work effectively or command confidence, we will look at it. I am not aware of that evidence, but if you have accumulated it, we will obviously look at it carefully.

Q463 Chair: The problem being that existing statutory limits on non-competition clauses or confidentiality clauses that would set those limits are governed by existing employment law, which restricts what limitations can be applied. Only statute can provide the extra flexibility that we might want the rules to provide.

Mr Maude: The restrictions on restraint of trade exist for a very good reason. But, obviously, there is a case for saying that, for people in particular circumstances, we need to avoid conflicts of interest. Is there a kind of simple, one-size-fits-all approach? No, there is not. Our system allows proportionate controls to be applied to officeholders in a variety of different positions-Ministers, officials in different circumstances and special advisers. It is capable of being applied in a reasonably sensible but proportionate way.

Q464 Chair: If people are being allowed to, for example, take jobs that undermine public confidence in the whole process because of the Human Rights Act or existing employment rights, clearly that can only be addressed by legislation.

Mr Maude: If there is evidence of that, we would want to look at it.

Q465 Robert Halfon: Some of the witnesses who have been through ACoBA say that the criteria that it applies are very subjective and that they received no feedback during the process to enable them to understand how the committee reached its decision. How do you respond to this and what can be done about it?

Mr Maude: That is something for ACoBA itself. I am sure that the members of the committee will want to look at that and that they will reflect any proper concerns in the way they operate in future. In terms of the criteria, each case is different. There is a very wide array of circumstances and there needs to be a solution that is proportionate and sensible and that protects the perception that there are conflicts of interest that are permitted. We need to avoid that but, at the same time, we need to be fair to people. These are people who have entered public service and we need to be treating them fairly. I hear your point that there is not sufficient feedback. The committee will hear that, and no doubt it will want to reflect and respond to that.

Q466 Robert Halfon: You do not think there should be a clear set of principles?

Mr Maude: I think there is a fairly clear set of principles. The clear principle is that the people who leave public office should not be able to take paid employment from an employer whom they might have been in a position to benefit when they were holding their public office and that there should be a period within which that is simply unacceptable.

Q467 Robert Halfon: ACoBA say that they do not keep any public records of who accepts their advice and who does not. Do you think that is right?

Mr Maude: Any public records?

Q468 Robert Halfon: When we spoke to them they said that they don’t keep any public records, i.e. on their website, or any data about whom they speak to formally and who accepts their advice and who does not. Should it not be made public?

Mr Maude: I was not, I confess, aware that it was not. I thought it was public. I absolutely take the point. When you are asked, "What are the sanctions against people who are given advice and don’t take it?" the main sanction should be the publicity. I thought that happened.

Chair: Where they give advice, whether it is accepted or not, it is published where the appointment is taken up. What they do not publish is where they give advice and the appointment is not taken up.

Mr Maude: Why would that be published?

Q469 Robert Halfon: Ian Lang said he had no records of who took his advice or who did not take his advice. All I am suggesting is that it should be published clearly on their website. Not the informal conversations, which are perfectly fair, but the formal conversations should be made clear so that people can judge whether people have accepted or not accepted their advice.

Mr Maude: Yes, I would be very sympathetic to the view that if someone is given formal advice and rejects it that should be made public. Absolutely.

Q470 Robert Halfon: But if they accept the advice that should also be on there, so people would know who accepted advice and who did not.

Mr Maude: Yes, I am trying to think whether there is any reason why that would not happen. If the advice is public, which it is, then, yes, I can see that that follows.

Q471 Chair: We do have a concern that the rules are not as clear as they could be. Certain core values are set out, but it is not clear to users of ACoBA whom we have spoken to that they get any indication of the criteria that ACoBA applies, and it is not clear whether the guidelines for Departments on administering business appointments rules for civil servants form part of the rules or are discretionary. Our concern is that there needs to be more clarity about this and more definition so that people know where they stand. It potentially leaves people in a very invidious position.

Mr Maude: I hear that.

Q472 Chair: It has been said that because ACoBA has no sanctions of its own to apply-it is purely an advisory body-it relies on what is called, I think erroneously, "the court of public opinion" to deter people from breaking the rules. Do you think this is an acceptable method of enforcement, which is what we are relying on? Is not the court of public opinion rather a subjective measure of whether something is acceptable?

Mr Maude: If the sanction that is being sought, which I completely understand, is in the case of someone rejecting the advice from the committee, the reputational damage to the person who rejects the advice and to an organisation that employed that person in the public knowledge that the advice had been rejected would be significant.

Q473 Chair: The problem is that the court of public opinion does not express much confidence in the ACoBA process itself.

Mr Maude: I am not terribly aware that the court of public opinion has opined very decisively on this.

Q474 Chair: I think you will find that newspapers quite commonly add two and two and get about 12½.

Mr Maude: Is that a specific?

Chair: I am not going to be specific, because I think it would be invidious for the people concerned. I do not want to drag their names into the public domain unfairly again. We have spoken to quite a number of people who felt very much hung out to dry by the process, even when they had complied with the rules. They have been pilloried and nobody has come to their defence, because ACoBA is not in a position to defend them. I rather subscribe to your very robust response to Mr Flynn: we should value people who come into public life, and not leave them swinging in the wind, subject to the court of public opinion.

Mr Maude: I think people need to be treated fairly. If there is a lack of clarity identified in your report about the way in which advice is formulated and given, that is something we will definitely look at. I know that Lord Lang and his colleagues on the committee will want to look at that and reflect on it.

Q475 Chair: In particular, if I may pursue this, in one case where an individual had followed the advice, further advice appeared on the website, giving the impression that the individual had broken the rules. The Cabinet Office had to issue a statement defending that individual. In another case, a former Member of Parliament and former Minister complied with the rules, but the advice published on the website was used by the media to create a story that was wholly invidious to the individual concerned, even though that individual had complied with the rules and the advice. The ACoBA process is being used to blacken people’s reputations, even though they have complied with the rules, and then nobody comes to their defence.

Mr Maude: I do not know the second case; I think I know the first case. I think there was a communication problem, from which I think lessons have been learned.

Q476 Chair: But would there not be an advantage in having an ACoBA-type person who would be a point of reference for the press, and who could explain why the advice had been given and vindicate individuals who were being attacked unfairly in the press when they had complied with the rules? That rather militates, again, in favour of someone with statutory authority, rather than someone who is just appointed under the royal prerogative and cannot undertake that function.

Mr Maude: I hear your general point, and it is a very fair point.

Q477 Alun Cairns: Is not the solution greater transparency? It seems that some information is published and some is not. That would also give rise to greater consistency, particularly if the criteria by which judgments are made are also published. On that basis, consistency over several Administrations would show greater support for the people whom we are seeking to attract from the private sector into the public sector.

Mr Maude: Again, I think that is a really fair point. It is a relatively new process. I cannot remember how long it has been in existence, but it has not been there for centuries. What you would then get is, as it were, a body of case law or its equivalent developing, from which people could see which way decisions were likely to go. I hear that. I think it is a fair comment.

Q478 Charlie Elphicke: Turning to the other point, which is the whole issue of the assessment that you made of the impact of civil service reform on ACoBA’s work load and the work load of Departments in applying the business appointment rules, what assessment have you made of that?

Mr Maude: We have been clear that one of the things that we hope to see more of is people coming into the Civil Service from the outside, and two-way traffic. People have been talking about this for ever.

Q479 Charlie Elphicke: Do you think that ACoBA is adequately resourced for its anticipated capacity and work load?

Mr Maude: Obviously, it will need to be resourced for whatever the work load is. I am not envisaging a sudden massive spike in its work load. If there were to be that, we would need to make sure that it was properly resourced to deal with that.

Q480 Charlie Elphicke: Do you think people join the Civil Service because they want to get a fat-cat job afterwards? Yes or no?

Mr Maude: No, absolutely not.

Q481 Charlie Elphicke: Or because they are committed to public service?

Mr Maude: Yes. Most people who come into public service, whether they are politicians, or in the health service, local government or the Civil Service, are generally invested with quite a strong public service ethos.

Q482 Charlie Elphicke: Do you think people go into politics for the money, or quite frankly could we all earn far more doing something else?

Mr Maude: I have yet to find someone who came into politics for the money.

Q483 Charlie Elphicke: That said, do you think there is an issue, in that some people who have reached the top of politics then cash in? Tony Blair, Gordon Brown and Lord Mandelson from the previous Government are examples. Do you think there is an issue there, and that the balance needs to be struck correctly in the case of those people who try to cash in their chips-to excess, in the view of some members of the public?

Mr Maude: Our concern should be whether there is a conflict of interest. Are people cashing in improperly, with the perception that they may be cashing in on favours? That is the real mischief that we should guard against, and that ACoBA is very alert to.

Q484 Charlie Elphicke: Finally, within the context of the two former Prime Ministers and Lord Mandelson, who has risen to a new career once more, are you satisfied that ACoBA and the business appointment rules process are effective in their stated aim of enabling the interchange while avoiding reasonable public concern about the impropriety I have just referred to?

Mr Maude: Yes, I do broadly. Do I think it is perfect? No, and nor would Lord Lang say that he thinks it is perfect. Some of the suggestions I have heard here today seem fair points that we would want to consider carefully.

Q485 Greg Mulholland: May we go back to the problems? One is that some people are just ignoring the process. There has been a number of applications retrospectively approved. There has been clear evidence from John Suffolk, who said he was absolutely aware of some officials who simply ignored the process. What is the Department doing to ensure that the rules are followed?

Mr Maude: There may be a lack of awareness, though I am not conscious of that. I hear what John Suffolk said. I know that in my Department, people are very aware of it. I would be astonished if any Ministers were not aware of it. I will talk to Sir Bob Kerslake, the head of the civil service, about what if anything needs to be done to ensure that civil servants are aware of the requirement.

Q486 Greg Mulholland: The other thing that John Suffolk identified was that there is no incentive for people to go through this process at the moment, certainly in the case of civil servants, because there is neither carrot nor stick. As we have heard, there are issues, and some people have been wrongly criticised when they have followed the process, which is clearly completely unfair. Equally, there are really no sanctions. There may be in the case of Ministers, where there will be a high-profile case and public criticism, but in the case of many civil servants there will not be. There is no carrot or stick, and that means that the system remains ineffectual.

Mr Maude: I understand the deficiencies you point to, which can be addressed, but I am not aware of evidence that it has been ineffectual. I do not know if it does so at the moment, but ACoBA might want to consider whether it should, if its advice is that someone should not take up an appointment, inform the potential employer of its advice. Most employers are sensitive to their reputations, and it would be surprising if employers went ahead in those circumstances. I think consistency and transparency are important. We will want to look carefully at the extent to which they need to be strengthened.

Q487 Greg Mulholland: There is one final question from me. I did not realise until we started this inquiry that people have the avenue of an appeal to the Prime Minister. We believe that has been used once in the current Administration, but we do not know, and Lord Lang himself did not know, the outcome of that discussion with the Prime Minister, which, I think you would agree, is wholly unsatisfactory. If that is a formal or semi-formal right of appeal, people should know the outcome of that appeal process, and we do not.

Do you agree that it is simply inappropriate to have an appeal to the Prime Minister, who is a political figure and is subject to potential criticism? The current Prime Minister has not overturned any decision-it is important to say that-but Tony Blair did; he overturned the committee’s view on a retired Air Marshal. He had dealings while at the MOD with a company that he went on to work for, and the Prime Minister overturned the committee on that. It seems to me that that is not something that will help public confidence. Either this is an independent process or it is not. The Prime Minister ultimately is a politician. Do you think that that should be got rid of?

Mr Maude: We are in the relatively early stages of this process operating, and I am not aware that it is used lots. You have said that there has been one appeal to the current Prime Minister.

Greg Mulholland: We think.

Mr Maude: I am not aware of that, nor of the outcome. In the end, these are judgments; there is no hard and fast rule that can rigidly be predicted. These are judgments based on the facts, the circumstances, and all of that. The Prime Minister is perfectly capably of making that judgment. Might it be an appeal somewhere else? I think that it is fair that there should be an appeal. I think ACoBA is a good committee staffed with good people, which will generally get things right, but no committee will think that it always gets everything right. There should be an appeal possible, because these are people’s livelihoods that are at stake. The fact that it is an appeal to the Prime Minister reflects the fact that this should be exceptional.

Q488 Chair: May I follow up on one small point? Civil servants may be properly informed about the requirement to consider the ACoBA process before they decide to leave, but in one case, a special adviser had no idea that the rules applied to him, and it came as something of a surprise. We know that a great deal of rush is often involved in the appointment of special advisers. Would it not be sensible to take particular care to ensure that special advisers are informed of the obligation that they are taking on simply by accepting an appointment as a special adviser in a Government Department?

Mr Maude: Yes, and I think that part of the problem here was that the obligation on special advisers to seek advice post-dated the appointment of most of the current special advisers, because they were appointed very quickly, perfectly understandably, and the change to the special advisers’ code was implemented after that. That is a perfectly fair point, which we need to address1.

Chair: On the membership of ACoBA-

Paul Flynn: Before we get on to the membership and before we have another operatic performance, I was rather surprised that you, Chair, reinforced the myth that I am somehow opposed to civil servants or the ethos of civil servants.

Chair: I don’t recall saying that to you.

Paul Flynn: The suggestion was made by the witness, who has used the normal defensive political ploy whereby, if you cannot answer the question, you attack the questioner, turn the question into an absurdity, and attack the absurdity of your own creation. I just want to make that point.

Chair: I am always happy for you to make your points, Mr Flynn.

Q489 Paul Flynn: Although I am saying critical things about the membership, I am not suggesting that these people are all monsters, or immoral in some way. The membership was criticised by the previous PASC, and we suggested that there would be a benefit to having an advisory council that was more representative of society at large.

I believe that the present membership consists of four Lords-the Dame has now gone-and about three knights, which is hardly a cross-section of society as most of us know it. There are also people who, in most cases, have serious interests outside the House of Commons, like the people whom they are judging. The thinking in the past was that there should be someone on there who does not think it is normal to have a part-time job, perhaps a day or two a week, <?oasys [pc10p0] ?>that pays £60,000-someone from the real world, who is apart from the great and the good who are themselves beneficiaries of retirement jobs. We hear this morning that faith and trust in politics among the general public is even lower than it was a year ago. Will we have a body that commands public trust, or even the trust of people such as SpAds, who are not aware of its existence?

Mr Maude: Sorry, what is the question?

Paul Flynn: The question is: should we widen the membership to include people who have a background outside the closed world of the House of Lords and the companies of knights?

Mr Maude: It seems to me relatively immaterial whether they happen to have knighthoods or membership of the House of Lords. It seems to me a relatively trivial point.

Q490 Paul Flynn: No, it is not. It was taken up by the previous Committee, and by this Committee as well. We have questioned the chairman of the committee on it; he himself is in business, and is a retired Minister. That might well equip him to do the job, but he is certainly someone who has been more sympathetic to seeing people taking lucrative retirement jobs than someone who has taken a stand outside. Someone from the third sector or a trade union would have a rather different point of view, and would perhaps be rather less generous in the decisions they take.

Mr Maude: We are talking about people’s livelihoods here, and making difficult judgments about whether there is a conflict of interest for someone who is leaving public office and seeking employment in the private sector. It seems to me quite useful that the Committee should be composed of people who have that kind of experience, and who can make the judgment from a basis of knowledge, rather than prejudice.

Q491 Paul Flynn: Finally, are you really not aware of claims made about former Ministers taking lucrative employment in companies to which they awarded contracts when they were Ministers? Are you not aware of any suggestions or claims made in the press?

Mr Maude: That is what ACoBA is there to guard against.

Q492 Paul Flynn: And fails to; it has no powers to do it.

Mr Maude: You yourself, or maybe it was the Chair, made the point that if Ministers, particularly those who have a higher profile than officials, take employment in defiance of the advice of ACoBA, that is very damaging for their reputations, and for the reputations of the organisations that employ them in defiance of that advice.

Q493 Paul Flynn: But they get the consolation of getting the wage cheque coming in every week. There is nothing anyone can do about it except to say "tut, tut". That is an open invitation to those doing these <?oasys [pc10p0] ?>jobs at the moment, and those who will do them in the future, showing that they can get away with using their experience to feather their nest in the future.

Mr Maude: Which Ministers have taken jobs in defiance of the advice of ACoBA?

Paul Flynn: I suggest you take some time off and read, or perhaps we could send you some information, but I am not going to name them now.

Mr Maude: In defiance of the advice of ACoBA?

Q494 Chair: We are trying to avoid incriminating individuals who are not in a position to answer back at the moment. We have to accept that public concern has certainly been raised in the press about conflicts of interest between Ministers who have gone to other areas.

Mr Maude: I understand that, but my question is: are these cases where people have taken jobs in defiance of the advice of ACoBA?

Paul Flynn: No.

Chair: I am not aware of any former Minister who has defied the rules.

Mr Maude: Well, that is quite an important consideration.

Paul Flynn: The powers of ACoBA are non-existent really, but the powers have influence on them for a year, or two years or so, but then people can do what they want, and people will behave in that way. Working life ends at 60 in many cases now, in the professional jobs that we are talking about-these high jobs. People might well have 20 or 30 years of working life ahead of them, and it is understandable that people will behave that way and not serve the interests of public service, as perhaps they should.

Chair: Unless you have anything to add, Minister, I think this is ground we have already covered.

Q495 Robert Halfon: Do you think that the membership should be expanded slightly, just to make it slightly more representative of wider society? <?oasys [cn ?>Should there be one or two extra people put on, who are not necessarily involved in the Civil Service or politics?

Mr Maude: I am happy to look at that. I would need to be persuaded that it is for something other than optical reasons.

Q496 Chair: Of course, ACoBA’s membership will now be governed by the public appointment rules, which may well lead to a change in the composition. There is a concern that the people on ACoBA are themselves all insiders to the process. The way it was set up had to do with what it was intended to be-an advisory committee-but if it is becoming a more regulatory body, that becomes less appropriate. Do you accept that?

Mr Maude: I understand the point.

Q497 Chair: Moving on, our final question is that there is to be a triennial review of ACoBA, before the end of this financial year. Has that triennial review started? Can you give us any report on progress?

Mr Maude: No, it has not yet started. Every public body, as part of our public body reform programme, is to be subject to a triennial review. We will be looking, in the course of this year, at the Committee on Standards in Public Life. These should not be lengthy, protracted reviews. They need to be thorough, but swiftly dispatched.

Q498 Chair: May I invite the Government to wait until we have reported on this before concluding your review, so that our views can be taken into consideration before you set in stone the next three years of life of this body and its functions? We would appreciate that.

Mr Maude: That is a very helpful suggestion.

Chair: Minister, thank you very much for coming to the Committee today. Your evidence has been, as ever, extremely helpful.