Appendix: Government response
2. The Government is grateful to the
Committee for its examination of the operation and effectiveness
of the Business Appointment Rules and the Advisory Committee on
Business Appointments.
3. Following the publication of the
Committee's report, the Cabinet Office has undertaken a comprehensive
review of the Business Appointment Rules in consultation with
departments, and has agreed a number of revisions to the current
Rules for Crown servants, some of which reflect recommendations
set out in the Committee's report. These are detailed in the
individual responses to the recommendations below. The revised
Rules are annexed to this response.
4. The Advisory Committee on Business
Appointments will shortly undergo a Triennial Review, and the
Committee's report, and the Government's response, will form an
important contribution to the Review's considerations.
Benefits and risks associated with interchange
5. The potential benefits, and
the risks, associated with widespread interchange between the
public and private or third sectors are clear. We share the view
that interchange between sectors is in the public interest but,
if public confidence in public servants is to be maintained, the
risks associated with interchange must be openly acknowledged
and seen to be managed effectively. Any organisation or system
which is put in place to manage those risks must command the public's
respect and confidence if its decisions are to be trusted.
(Paragraph 17)
6. The Government agrees with the Committee
that interchange between sectors is in the public interest, and
it is long-standing government policy that those with experience
in government should be able to move into business or other areas
of public life. It is also the case that there may be propriety
risks associated with such interchange, and that these need to
be managed effectively and transparently in a way that maintains
public confidence and trust. It is equally important to ensure
that arrangements to manage risks are proportionate and fair on
individuals.
Impact of the Big Society and Civil Service reforms
7. The extent of interchange between
the public and other sectors seems certain to rise as Government
reforms to the Civil Service and public service delivery are implemented.
If the Civil Service is to continue to attract the brightest and
ablest individuals, it is crucial that such people are not penalised
for working in the public sector. Any restrictions applying to
their subsequent employment must be proportionate to the risk
of impropriety, taking into account their skills and expertise;
their role(s) in the public sector; and the need to uphold public
confidence in the probity of those in public office. (Paragraph
24)
8. The Government agrees with the Committee's
view that interchange between the public and other sectors is
likely to increase as Government reforms to the Civil Service
and public service delivery are implemented. Increasingly, the
Government needs to be able to attract the brightest and ablest
individuals, not only into the Civil Service, but also into the
public sector more widely. The Government agrees with the Committee
that any restrictions applying to their subsequent employment
must be proportionate to the risk of impropriety, and should not
act as a deterrent in attracting excellent recruits.
Proportionate coverage
9. Reliance on reputational damage
as a deterrent to improper behaviour is predicated on the wider
public being able to reach a properly informed judgement about
the behaviour in question, yet the "court of public opinion"
is neither impartial nor objective. Full and fair information
about each case must be put into the public domain to reduce the
potential for misleading reporting, and to assist those involved
in replying to accusations and defending their reputation. We
support the recent efforts by ACoBA to increase the information
made available on its website, and recommend that all government
departments publish similar information about the advice given
to their former civil servants, and the restrictions (if any)
imposed upon them. The information published should explain and
justify the advice given and any action taken. (Paragraph
30)
10. The Government agrees with the Committee
that increased transparency will help increase public understanding
of, and confidence in, the purpose and operation of the Business
Appointment Rules. Like the Committee, the Government welcomes
the initiative by the Advisory Committee on Business Appointments
to make more information available on its website about the circumstances
of an individual case, and its advice and recommendations once
the appointment has been taken up or announced.
11. The Government shares the Committee's
view about departments making public information about the advice
given to their former civil servants, and the restrictions (if
any) imposed upon them. The Cabinet Office is taking forward work
with departments to publish information on departmental websites
for the applications they handle at SCS2 and SCS1 level (and equivalents,
including special advisers of equivalent standing). These new
arrangements are reflected in the revised Rules.
12. If the Government stands by
its policy of encouraging interchange, it also has a moral duty
robustly to defend any former Minister or public servant who is
the target of unjustified criticism by the media. Arrangements
should be made to ensure that individuals who have complied with
the spirit and letter of the advice given to them are protected
from any unfair smear or innuendo. Any statements made should
reiterate the Government's active support for interchange between
the public and other sectors, acknowledge the perceived risks
and explain the measures which are in place to manage any potential
conflict of interest, not just simply confirm that the correct
procedure has been followed. (Paragraph 31)
13. The Government welcomes the Committee's
support for a robust approach to media criticism where former
Ministers and public servants have complied with the business
appointments process and followed the advice they have received,
and for whatever reason find themselves to be the subject of unfair
or unjustified public criticism. Such individuals should expect
to receive full and robust defence and support from the Government
as their former employer. The Government agrees with the Committee
that inaccurate media reporting and criticism in individual high
profile cases can cause unwarranted damage and anxiety for those
directly involved, and risks bringing the business appointment
system into disrepute. The Government believes that increased
transparency about individual cases will help to mitigate the
risk of inaccurate and unfair reporting in the future.
Clarity and consistency
14. The Rules as they stand are
predominantly focussed on the process to be followed, and they
are not sufficiently clear about the principles and considerations
which should guide the advisory committee's decision. These principles
should be made explicit, and should be consistent for all applications
(whether considered by ACoBA or departments, and whether from
former Ministers or civil servants). ACoBA should also publish
the "norms" and precedents against which new cases will
be considered, to help applicants predict the likely decision
in their case. (Paragraph 38)
15. The Government believes that the
Business Appointment Rules for both former ministers and former
civil servants, strike an appropriate balance between explaining
the propriety aims and principles that underpin them, and the
practical process that applicants need to follow in submitting
an application under the Rules. In the case of former civil servants,
the Rules need to set out clearly the differing procedures for
those at the most senior levels whose applications are considered
by the Advisory Committee on Business Appointments, and those
at more junior levels whose applications are handled within departments.
Retrospective applications
16. We are concerned by the low
level of awareness of the Business Appointment Rules amongst relatively
senior public servants. We recommend, as a minimum, that candidates
applying to work in the public sector for the first time should
be made explicitly aware of the Rules before they take up the
post, and at appropriate intervals during their public service
career, such as on promotion or when moving between departments.
It is insufficient to make a single reference to the Rules in
an applicant's contract or terms and conditions at the time of
his or her appointment. (Paragraph 41)
17. The Government accepts the recommendation.
It agrees with the Committee that it is essential that public
servants are aware of the Rules and understand how they operate.
The Government agrees that more needs to be done to ensure that
there is a much higher level of awareness of the Rules. The Rules
are highlighted in letters of appointment and also when individuals
leave public service. However, the Government agrees with the
Committee that more emphasis should be placed on the Rules during
the recruitment process, and that individuals need to be reminded
about the Rules at regular intervals throughout their careers
in the public service, including when individuals change jobs
or are promoted. The Government believes that its proposals for
increased transparency will also help with raising awareness of
the Rules. The Rules have also been strengthened to make clear
that retrospective applications will not normally be accepted.
Membership
18. We are not persuaded that
the appointment of political nominees to ACoBA is necessary purely
because of its role in "providing advice direct to former
Ministers": the membership of ACoBA included three political
nominees from its inception in 1975, twenty years before it was
given responsibility for considering applications by former Ministers
in 1995. Moreover, the majority of applications considered by
ACoBA come from former civil servants and special advisers, not
from former Ministers, yet the three political appointees make
up nearly half of the Committee. The recent appointments made
under the Commissioner for Public Appointments' Code of Practice
are a welcome step in the right direction, but we recommend that
the membership of ACoBA be reconsidered entirely, to ensure that
it is able to command public trust and confidence in its decisions.
Rather than appointees representing different "client groups",
we recommend that a pool of people with a wide range of experience
and backgrounds be appointed—after open competition and
in accordance with the Commissioner for Public Appointments' Code
of Practice—from which a different panel could be drawn
to consider each application. This proposal would have the advantage
of increasing the capacity of the Advisory Committee to deal with
short-term increases in workload. (Paragraph 48)
19. The Government is not persuaded
by the Committee's recommendation that a pool of individuals should
be appointed from which a different panel could be drawn to consider
each application. The Government believes that this proposal would
have considerable resource implications given the need to recruit
and manage a greater number of public appointees, and would be
unnecessarily complicated and time-consuming to administer. Moreover,
the Government takes the view that this proposed approach would
risk creating a lack of coherence amongst the membership and a
consequent loss of shared knowledge and consistency in the consideration
and treatment of applications. The Government believes that this
is an important and necessary strength of the current arrangements.
20. However, the Government is committed
to ensuring that the membership of the Advisory Committee on Business
Appointments is balanced and representative, and that, collectively,
the members bring an extensive range of skills and experience
from a wide variety of different sectors. The Government is also
committed to ensuring that the appointments of the Chairman and
independent members on the Advisory Committee are made in accordance
with the requirements of the Commissioner for Public Appointments,
as has been the case with more recent appointments to the Advisory
Committee. In terms of the appointment of political nominees to
the Advisory Committee, the forthcoming Triennial Review will
look at governance issues, including the issue of political appointments.
Resources
21. We were not impressed by ACoBA's
record of processing "over half of applications" in
2010-11 within its published deadlines, although it is somewhat
reassuring that more flexible staffing arrangements are now in
place, and that the Government recognises that ACoBA may need
more resources in future. It is disappointing that ACoBA and the
Cabinet Office failed to anticipate the entirely foreseeable rise
in applications following both the General Election and reductions
in Civil Service numbers in the subsequent Spending Review. This
potential problem was foreseen by the Committee on Standards in
Public Life as long ago as 1995, and failure to heed its advice
has led to a year of sub-standard service which has had a direct
impact on applicants. (Paragraph 56)
22. The Government agrees that it is
important that the Advisory Committee on Business Appointments
is appropriately resourced to enable it to deal with applications
in an efficient and timely manner. The Government believes that
the changes that have been implemented over the past couple of
years, and that have been welcomed by the Committee in its report,
are having a positive impact on performance, and the Government
welcomes the Advisory Committee's efforts in this area. These
include the publication of targets for the handling of applications
received by the Advisory Committee, and the move to more flexible
staffing by the sharing of secretariat resource with the Civil
Service Commission which will enable the Advisory Committee to
deal more effectively with peaks and troughs in workload. The
Advisory Committee's most recent annual report covering the 2012/13
financial year shows that 87% of applications from officials were
dealt with within the Advisory Committee's published target of
20 days and 85% of applications from former Ministers were dealt
with within the Advisory Committee's published target of 15 days.
This was despite a significant increase in the overall number
of applications received. The forthcoming Triennial Review of
the Advisory Committee will provide a timely opportunity to examine
how being part of a larger Secretariat is helping the staff respond
better to fluctuations in workload, and how the administrative
and governance structures might be further improved going forward,
including ensuring that departments play their part.
Compliance and enforcement
23. We consider that it is an
unfit reward for public service for individuals to be left by
Government without any means of financial support for a period
of up to two years. This would not occur in the private sector,
and we agree with the Government that, in exceptional circumstances,
it may be appropriate to continue to pay former public servants
who are required to observe a waiting period before taking up
another. Allowing former public servants to take paid "gardening
leave" before beginning in their new roles does, however,
mean that they may remain on the public payroll for a significant
period after they have left public service. The cost to the public
purse of extended paid "gardening leave" has to be proportionate
to the real risk of hardship to the individual, and the avoided
risk of impropriety from letting an individual take up alternative
paid employment. (Paragraph 61)
24. The Government acknowledges that
it may be appropriate to continue to pay former Crown servants,
including special advisers, who are required to observe a waiting
period before taking up an external role. Such payment would be
subject to the particular circumstances of the individual case,
and it would be important to ensure that decisions take account
of all relevant factors including, for example, whether there
was a reasonable expectation of a waiting period under the Rules.
25. Where a waiting period is required,
departments should seek to redeploy individuals for the duration
of the period. Where there is no alternative suitable employment
available, the department can consider whether there is a case
for the individual to be compensated for serving a waiting period.
The Cabinet Office must be consulted when payment is proposed
either by the Department or the individual.
The way forward
26. We recommend that the Government
take the opportunity afforded by its proposed legislation on the
statutory registration of lobbyists also to establish clear, statutory,
conflict of interest and business appointment rules for former
Ministers, civil servants and special advisers. The legislation
should impose clear duties on all current and former public servants
to minimise the possibility of real, apparent or potential conflicts
of interest between their new employment and their most recent
responsibilities within the public service. It should also impose
clear duties not to take improper advantage of public office,
nor to disclose "insider information" which was gained
through the public office and is not available to the wider public.
(Paragraph 77)
27. The
Rules for civil servants derive their authority from the Civil
Service Management Code and the Rules for former Ministers
from the Ministerial Code, and the principles outlined
by the Committee are already incorporated into these documents.
The Government does not believe that a statutory approach to this
issue is necessary. The Codes and Business Appointment Rules already
make clear the duty of former Ministers, civil servants and special
advisers with regard to subsequent employment, and the Government
believes that some of the criticisms of the existing regulations
will be mitigated by the plans for increased transparency.
28. We recommend that all public
servants should be subject to broadly similar post-public employment
restrictions, preventing them from taking up employment with any
organisation with which they had "significant official dealings"
within the year immediately prior to leaving office. A lobbying
ban should also apply. (Paragraph 78)
29. Under the current Rules, departments
and the Advisory Committee on Business Appointments already consider
whether individuals might have been involved in developing policy
affecting their prospective employer, or where they have had access
to commercially sensitive information of competitors of the prospective
employer. This already covers a wider range of issues than those
covered by the Committee's recommendation. Therefore, to accept
the recommendation would narrow the scope of this consideration,
which the Government does not consider appropriate. The Government
agrees with the Committee, but believes that its recommendation
does not go far enough.
30. We recommend that, unless
varied in individual cases, the prohibitions above should apply
for two years to former Ministers, special advisers, and senior
civil servants, and for at least one year for civil servants at
lower grades. Appropriate civil sanctions should be available
for contraventions of the legislation, and should include the
possibility of sanctions against employers who hire former public
servants in contravention of the rules (for example, exclusion
from eligibility to bid for Government contracts). Permanent Secretaries
should be accountable to Parliament for compliance with the legislation
by staff from their department. (Paragraph 79)
31. The Government agrees with the Committee's
proposal to simplify the existing Rules as they apply to civil
servants below Senior Civil Service level by reducing the period
for which prohibitions would normally apply to one year, and this
change has been reflected in the revised Rules. The Government
believes that such an approach should apply to equivalent grades
below the Senior Civil Service, including special advisers of
equivalent standing. Departments will however have discretion
to apply the Rules for up to two years for specific roles below
SCS1 level (and equivalents) where there is an exceptional case
for doing so. There is already a good level of compliance with
the voluntary arrangements, and as part of the consideration of
individual applications, departments routinely consult the potential
new employer and competitors. The new transparency arrangements
will ensure greater awareness of the Rules and requirements already
in place.
32. Alongside the introduction
of statutory ethics regulation, we recommend that the existing
Advisory Committee on Business Appointments be abolished and replaced
by a new, statutory, Conflicts of Interest and Ethics Commissioner
following the Canadian model. The Commissioner should be politically
neutral, not a former politician or career civil servant, and
should be made an Officer of Parliament. The Commissioner should
also have his or her own budget, and powers to employ his or her
own staff, in order to ensure the independence of the office from
Government. (Paragraph 80)
33. The Government believes that the
existing Advisory Committee on Business Appointments does an effective
job in advising the Prime Minister, Foreign Secretary, Defence
Secretary, First Ministers in the Devolved Administrations in
Scotland and Wales, and Permanent Secretaries on applications
made to it under the Rules, and under separate arrangements in
advising former Ministers direct on proposals to take up any employment
or appointments. The Government does not believe that the introduction
of a Commissioner on the Canadian model would provide a tangible
increase in compliance. There is already a good level of compliance,
and proposals to increase transparency would mitigate many of
the other problems identified with the current arrangements.
34. In deciding applications,
the Commissioner should be supported by a pool of panel members,
appointed on merit in accordance with the Commissioner for Public
Appointments' Code of Practice. Each application should be decided
by the Commissioner and a small number of panellists, selected
from the pool. (Paragraph 81)
35. The Government refers the Committee
to the response to recommendation 7, and reminds the Committee
that member appointments to the Advisory Committee on Business
Appointments are already made in accordance with the Commissioner
for Public Appointments' Code of Practice.
36. The Commissioner should have
discretion to order that former public servants continue to be
paid a proportion of their salary from the public purse during
any enforced waiting period. He or she should also have discretion
to waive, reduce or increase the statutory waiting periods up
to a maximum of five years if it seems proportionate and fair
to do so, and having regard to the risks of actual or perceived
impropriety, but must publish his or her reasons for varying the
waiting period in any particular case. In deciding whether to
vary the waiting period, the Commissioner should be required to
have regard to the same matters identified by the Canadian legislation.
(Paragraph 82)
37. The Government refers the Committee
to the response to recommendation 9.
38. To further enhance predictability
for applicants, the Commissioner should be required to publish
clear guidance on the procedures which he or she will follow when
considering an application, and the expected timescale for each
stage of the process. Target timescales should be consistent for
all former public servants, regardless of whether they were Ministers,
special advisers or civil servants. The Commissioner's decisions
in individual cases, and his or her reasons, should also be published
when the appointment is taken up. Applicants should have a corresponding
duty to notify the Commissioner when they take up an appointment.
The Commissioner should be required to monitor compliance with
his or her decisions, and to report annually to Parliament on
the cases considered during that year, any contraventions of the
rules and any sanctions imposed. (Paragraph 83)
39. The Advisory Committee on Business
Appointments already publishes information on its advice and produces
annual reports which are available on its website and include
the advice given by the Advisory Committee on individual cases
where the appointment has been taken up or announced within the
period of the report. Target timescales for the processing of
business appointment applications from former Ministers and officials
reflect differences in the procedures for these two groups of
public servants. This will be considered by the forthcoming Triennial
Review of the Advisory Committee as part of its consideration
of resource and governance issues.
Other powers
40. Powers for a UK ethics regulator
to provide advice to public servants on the handling of their
private interests would overlap with those of the Prime Minister's
Adviser on Ministers' Interests, about whom we expressed concerns
in an earlier Report. We recommend, therefore, that the new Commissioner
should assume this role as well, with the power to instigate investigations
into breaches of the Ministerial Code on his or her own initiative.
(Paragraph 85)
41. The Government has responded to
the Committee's recommendation in its report about the Prime Minister's
Adviser on Ministerial Interests. As set out above, the Government
does not believe the introduction of a Conflicts of Interest and
Ethics Commissioner is the appropriate route to take.
42. We recommend that the Government
consider whether it may be expedient to merge the functions of
the Committee on Standards in Public Life, of investigating and
reporting on general questions of ethical conduct in public life,
into those of the new Commissioner. (Paragraph 86)
43. The Rt Hon Peter Riddell, CBE undertook
a Triennial Review of the Committee on Standards in Public Life,
and his report was published on 5 February 2013. The Government
accepted the report's recommendations about the future operation
of that Committee.
44. We do not propose that the
new statutory ethical regulator should take on any of the functions
currently performed by the Parliamentary Commissioner for Standards
or his equivalent in the House of Lords, or of the Standards and
Privileges Committee. (Paragraph 88)
45. The Government agrees that the responsibilities
and functions currently performed by the Parliamentary Commissioner
for Standards or his equivalent in the House of Lords, or of the
Standards and Privileges Committee, are matters for the UK Parliament.
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