22.On the basis of a report by the Comptroller and Auditor General, we also took evidence from the Department for Education (the Department) about how it managed a potential conflict of interest.
23.In September 2013, the Department appointed the first Chief Social Worker for Children and Families. Immediately before joining the Department, the Chief Social Worker had been a director and shareholder in a company called Morning Lane Associates, which provided child protection and early intervention services, consultancy and training to local authorities. At the time of the Chief Social Worker’s appointment, Morning Lane Associates did not have any contracts with the Department. Since her appointment, Morning Lane Associates has secured, either on its own or as part of a consortium, four contracts with the Department with a value of around £2.9 million.
24.We asked the Chief Social Worker to tell us about the conflict and how she chose to manage it. The Chief Social Worker explained that she had an ongoing conflict of interest because she had a close and personal relationship with the director of Morning Lane. She also told us that she had sold her shares and resigned as a Director of the company. She had discussed her intentions with the Department, and did so before she took up the post.
25.We were particularly interested in how the conflict of interest had been managed when the Department had awarded a contract for the assessment and accreditation of social workers to KPMG and Morning Lane Associates. The Department told us that as the Chief Social Worker had declared an interest, and as Morning Lane Associates were bidders, she recused herself from the process of determining which was the best bid. However, when the bid from the consortium led by KPMG, including Morning Lane Associates, was selected as preferred bidder, the Department had asked the Chief Social Worker in her capacity as Chief Social Worker if she was confident that the quality of the bid met her requirements. The Department told us that the Chief Social Worker had not thought the bid met her requirements because the proposed online approach would not adequately assess the competence and capability of social workers. The Department told us that it then sought an independent review on the use of direct observation to assess social work practice alongside an online approach. The Department agreed a contract extension with KPMG for this work at a cost of £90,564 plus VAT. KPMG then contracted Research in Practice to lead this work.
26.The Department considered that it does now manage conflicts of interest properly. However, in this case record keeping had been poor and the perception of the conflict had not been managed well. The Department told us that “alternative approaches might have been taken to more fully manage any perception of a conflict better” in the award of the assessment and accreditation contract to KPMG and Morning Lane Associates. The Department was tightening up arrangements for recording conflicts of interest in the future. We asked how many senior civil servants had not completed their annual returns on declarations of interest, given the Chief Social Worker had not completed a return for three years, although had now done so. The Department could not confirm whether the two other senior civil servants it had found not to have completed their returns, had done so yet.
26 C&AG’s Report, , Session 2016–17, HC 789, 26 October 2016
27 paras 1-4
15 December 2016