Managing Ministers’ and officials’ conflicts of interest: time for clearer values, principles and action Contents

2The work of ACoBA


14.The Advisory Committee on Business Appointments (ACoBA) monitors the conduct of former and current holders of public office.18 ACoBA is an independent committee which advises on applications by all former Ministers, former special advisers, and former civil servants at Director-General level and above who wish to take up appointments within two years of leaving office. This includes members of the Diplomatic, Armed and Security Services, but not the Police Service. Applications by more junior public servants are handled by the department by which they were employed.

15.In most cases, ACoBA provides its advice to the Prime Minister (or Foreign Secretary in respect of former Diplomats, and where appropriate, the Defence Secretary, First Ministers of Scotland and Wales and departmental Permanent Secretaries). It advises former Ministers directly.

16.ACoBA (or the department) can recommend: that an individual waits for up to two years before an appointment is taken up, or restrict the types of activities which the former public servant may undertake such as lobbying the Government, or using information to which the individual may have had access while in office. It can also advise that it considers a particular appointment “unsuitable”, but it cannot prevent appointments being taken up. It only publishes its advice and any restrictions it recommended when an appointment has been accepted. Individuals can also seek speculative advice, but this is never published. ACoBA does note, however, situations in which applications which would otherwise fail are, after an informal conversation, often amended or withdrawn, before the committee considers the application.19 It is worth questioning what could have substantively changed in the applications following those conversations so as to turn what would otherwise be an unsuccessful application into a successful one. The very fact that decisions can be changed following an informal conversation is also detrimental to the principle of transparency. It is also worth noting that former Ministers and Civil Servants are under no obligation to consult ACoBA beyond the requirement to do so in the Ministerial Code. The current list of appointments taken up by former Crown servants and former Ministers can be found on the ACoBA home page.20

17.ACoBA is currently chaired by Baroness Browning, who took up the role on 1 January 2015. The Committee is a non-statutory, non-departmental public body sponsored by the Cabinet Office. It has eight members, appointed by the Prime Minister. The Conservative, Labour and Liberal Democrat parties nominate one member each; and the other five are independent members, appointed in accordance with the Commissioner for Public Appointment’s Code of Practice. All members are appointed for a single non-renewable term of five years.21 The application process for the five independent members of the panel has been of some contention. When asked who could apply for a role as an independent member of the Committee, ACoBA’s Chair, Baroness Browning encouraged the Committee to ensure “every bus driver and hairdresser you know to apply for any of those jobs. I can tell you factually, not one applied.”22 Whatever Baroness Browning’s aspiration, this is unfortunately fundamentally untrue. However, documents available from ACoBA’s publically accessible application form, published by Private Eye, reveal essential criteria for such a role being:

While the majority of these characteristics are not beyond your average hairdresser or bus driver, the first criteria, namely senior level experience in the Diplomatic Service, Military or business, may restrict applications from outside these sectors.

18.There also exists a concern that the so-called independent members of the panel often retain roles within the world of commerce, sometimes even within companies in which applicants are seeking to gain employment. This situation would be less troublesome if there was a consistency in the way in which independent members of the panel recused themselves from individual applications. There are notable examples in which independent members have failed to recuse themselves from a decision relating to an application made to work in either a present or past company of theirs.23 In such a situation a member of the panel cannot reasonably be considered independent. It is advised that any changes to the Rules should include a prohibition on independent panel members giving advice in cases where the applicant is seeking to work in a company in which that panel member has or currently works.

The Business Appointment Rules

19.The Business Appointment Rules govern the take-up of employment or appointments by former Ministers and Crown servants.24 The Rules are prepared by the Cabinet Office and approved by the Prime Minister. They have no statutory basis and include no sanctions for non-compliance, although compliance with the Rules forms part of the Ministerial Codes for the UK Government, Scottish Government and Welsh Government, and therefore of the terms and conditions of appointment of civil servants and special advisers.

Administration of the Rules

20.ACoBA is responsible for the operation of the Rules and for ensuring that Ministers and senior civil servants are made aware of the Rules as soon as they take up their positions, and when they leave public office. However, ACoBA’s role is advisory with no powers to enforce its advice or to address non-compliance of the Rules. The Committee also has limited resources to investigate individual applications, although Baroness Browning said that she is content from the numbers of applications that they receive, that compliance is “quite good”.25

Changes since 2012

21.There have been a number of changes both in the operating context of ACoBA and in the Rules since 2012. Changes include an increase in ACoBA’s workload, an increasing trend in Ministers leaving office to seek employment in sectors where they were previously responsible for policy, and new iterations of the Rules26. The political context within which ACoBA is operating has also changed. These changes are addressed below.

22.The graphs below illustrate the increase in applications from Ministers and Crown servants to ACoBA between 2009–10 and 2015–16.27 For example, in 2010–11, (immediately following the 2010 General Election), ACoBA advised 42 former Ministers regarding 95 applications and 63 applications from 38 civil servants. It is important to note that each Minister or civil servant may have sought advice from ACoBA for more than one post. In 2015–16, (immediately following the 2015 General Election), this figure had risen to 123 applications in relation to 33 former Ministers and 110 appointments in relation to 36 Crown servants.28 Baroness Browning also noted an increasing trend in Ministers leaving office to seek employment in sectors where they were previously responsible for policy. We contacted the Cabinet Office on 10 November 2016 to ask how many former Ministers since May 2015 had taken up employment in roles that directly related to the positions they held in Government and who are now working in the private sector. In response, the Government said that “information about former Ministers’ employment in the two years after leaving Government could be viewed on the ACoBA website”.29 In practice, evidence of this trend is difficult to quantify and evaluate as ACoBA does not collate this data.30

Graph 1: Ministers’ applications to ACoBA

23.It is also evident from ACoBA’s latest annual report that, although in 2015–16 ACoBA was able to manage peak demand by hiring extra staff, the overall pattern of resourcing shows a long-term inadequacy in responding to staff resourcing requirements. (see graph no 2: ACoBA Expenditure).31 Indeed, both PASC’s 2012 Report, Business Appointment Rules, and ACoBA itself have expressed concerns about the time taken to process applications.32 In 2012 PASC expressed their dissatisfaction with ACoBA’s record of processing “over half of applications” in 2010–11 within its published deadlines despite the predictability of more applications following the General Election. They were however reassured that the Government had acknowledged that ACoBA may require more resources in the future.

24.Inadequate resourcing can also be seen very clearly in the expenditure reported annually by ACoBA. Despite small variations from year to year, the striking feature of these annual accounts is that while ACoBA’s workload has risen (from an annual average of 111 applications in the three years from 2009–10 to 2011–12, to 195 in the three years 2013–14 to 2015–16), its expenditure, averaged over the same three-year periods, fell slightly. While this could, in part, be accounted for by changed accounting practices, it is clear that ACoBA’ s funding today remains at similar levels to its funding in 1998, and this is despite a clear and significant increase in its workload.33

Graph 2: ACoBA Expenditure

Changes to the Rules

25.New Rules were issued by the Government in October 2014 which removed ACoBA’s responsibility for monitoring and reporting on applications from special advisers below Director-General level (SCS3).34 In acknowledgement of this change, ACoBA suggested in its 2014–15 annual report that the Cabinet Office should provide a central point of guidance for departments to ensure that a consistent approach in respect of special advisers be taken across government.35

26.The Rules (2014) also included a statement, welcomed by ACoBA, that “retrospective applications will not normally be accepted”.36 ACoBA had previously expressed its view that it should be able to offer the most appropriate advice in any situation without appearing to be constrained by an appointment already having been announced, or taken up.37

27.Under the Government’s 2014 reiteration of the Rules, the lobbying rules prevent former Ministers and Crown servants from lobbying departments where they have previously worked for a two-year period. In principle, ACoBA can reduce or dispense altogether with this ban where interaction with a government department is “part of the normal course of business for their new employers”. ACoBA has however made clear its reluctance to make extensive use of this possibility, as to do so would increase the possibility of a real or perceived conflict of interest.38

28.The 2014 Rules allow for a government department to continue to pay former civil servants or special advisors, who are required to observe a waiting period before taking up an outside appointment. However, ACoBA agreed that such a payment, (whether agreed or not) would not form part of its consideration when offering advice. This question merits further investigation given that the Rules allow for it.

The political context

29.Professor Hine, Oxford University noted that the most significant change which has occurred since the publication of PASC’s 2012 report, is in the political context within which ACoBA is operating. He said:

The main change has been in the political context, where a general narrative of low public trust in elites has certainly become increasingly pervasive, and has fed into growing media claims that the Rules are inadequate to protect against improper lobbying, the use of inside knowledge, and the risk that future employment prospects condition the behaviour of public servants while in office.39

30.We acknowledge the hard work of the ACoBA secretariat, and their efforts to improve the monitoring of post public employment of former public servants. However, ACoBA’s effectiveness remains restricted, by both its lack of powers and narrow remit. It is currently difficult to quantify and evaluate the increasing trend in Ministers leaving office to take up employment in sectors where they were previously responsible for policy. The Government’s response to our question on this issue was inadequate. The Government should ensure that ACoBA collate this data starting in 2017 as part of their annual reports. The failure of ACoBA to adequately distinguish between different types of post-ministerial appointments, for example, paid as opposed to unpaid work and an overreliance on standard template letters, fails to adequately inspire confidence in the ACoBA process. This should be refined.

31.PASC examined the key issues concerning ACoBA and the operation of the Business Appointment Rules over four years ago. The Committee made several recommendations, some of which reinforced PASC’s previous recommendations. Nothing has significantly changed. Meanwhile, the problem has escalated, with increased numbers of public servants moving between the public and private sectors, and with declining public confidence in a system that was set up to command trust by mitigating any breaches of the Rules. The government must urgently review and address these longstanding and recurrent issues.

Public servants not vetted by ACoBA

32.In 2010 the Government removed ACoBA’s responsibility to monitor and report on applications from Crown servants below SCS3. ACoBA currently provides independent advice on business appointment applications to former Ministers and senior Crown servants at Director-General level and above. The Civil Service Code requires that those individuals at more junior levels observe the ACoBA rules and report to their relevant government department which advises on any applications.40

33.In 2012 PASC’s Business Appointment Rules report recommended greater transparency to increase public understanding of, and confidence in, the operation of the Rules. The report specifically proposed that - in line with the application information available on the ACoBA website - all Government Departments should publish information about the advice given to their former civil servants and any restrictions imposed on them.41 The Government accepted this proposal and amended the Business Appointment Rules for civil servants to include this procedure.42

34.As highlighted in the High Pay Centre’s report, The “revolving door” and the Corporate Colonisation of UK Politics, many of the issues surrounding the “revolving door” will also affect the lower ranks of Director and Deputy Director.43 The report suggests that these are key grades for “developing policy, delivering services, making decisions and negotiating contracts” and may therefore be more attractive to private sector employers than more senior figures.44 We have come across instances in which staff below the ACoBA sign off level are the Senior Responsible Officer for major projects. Also, Commercial Directors, responsible in most departments for the department’s commercial strategy, will not be overseen by ACoBA.45

35.Professor Hine, University of Oxford, told us that he was concerned about the scrutiny and transparency of departmental practice in monitoring and reporting on applications from Crown servants below SCS3. He said that Departments are required, on their own websites to post half yearly data on the advice given to applicants at SCS2 and 3 levels, although this only began in 2015–1646. He stated that, “there is no evidence that this data is being aggregated to establish the overall picture, as was possible until 2009 by reading ACoBA’s annual reports.”47 He added that:

It seems necessary with ACoBA no longer having any responsibility at all for most crown service applications, to publish the data on the Cabinet Office website or some other more accessible location. If the data is simply spread across individual departmental websites it is hard to find and even harder to make sense of.48

In supplementary evidence submitted to PACAC on 28 March 2017, the Government stated that: “Information on the outside appointments of other senior civil servants can be viewed on their departmental webpages on, usually under the transparency data section.”49

36.When asked what could be done to address a lack of departmental oversight of public appointments and lack of transparency, Lord Bew told us that ACoBA’s “transparency is remarkable” and that the issue was about “leadership in these areas which is not fully adapted”. He added that leadership in the area of departmental oversight could only happen if it was “accompanied” by providing the necessary resources50. In response to the same issue of departmental transparency, Baroness Browning recommended that there should be an appointment of “a non-executive director on each departmental board with responsibility for oversight of the Business Appointment Rules.”51

37.Between 2000–01 and 2008–09 the average number of applications for post public service advice from senior civil servants (SCS1 and 2) being dealt with inside departments and Executive Agencies ran at a rate of 443 per annum52. After 2008 these numbers were no longer reported in ACoBA annual reports. Until 2015–16 there was no further publicly-available data on this matter. Reporting was started on individual department and agency websites to identify the numbers involved in 2016.

38.As of 20 December 2016, for the year 2015–16, 93 applications for advice were reported on departmental websites53. This figure is much lower than that (443) on average reported by ACoBA in its annual reports until 2008–09. We are unable to account for this discrepancy, particularly in view of the rising trend of applications at SCS 3 level, dealt with and reported on by ACoBA.

39.One possible explanation is that almost none of the large number of Executive Agencies appear to have reported on post public employment advice given in 2015–16. From a sample of 23 Executive Agency websites which the Committee examined, only two reported on the question for this period. It should be noted also that out of eighteen departments seven had not, by 20 December 2016, reported on applications received during the period January-June 201654. Given the importance of timely posting of such information for transparency and public assurance purposes this seems to be a serious shortcoming. Some departments, were able to post the information in July and August.

40.We are aware that, in many situations, civil servants in positions lower down the organisation perform significant roles in respect both of policy formation and commercial relationships, including some senior responsible officers for major projects. Currently these staff fall outside ACoBA’s remit. Government Departments currently have the responsibility to regulate their relationships with, and any moves to, the private sector. However evidence reveals that there is a clear lack of scrutiny and transparency in departments’ monitoring and reporting of civil servants below SCS 3.

41.The Cabinet office must publish aggregated data on all applications of members of the Senior Civil Service below SCS3, and the departmental decisions made on them, showing proportions approved without conditions, and, in the case of conditionality, the categories of decisions made. The data must also cover Executive Agencies. Publication should allow public scrutiny of practice across individual departments and Executive Agencies. The Government’s response on this issue was inadequate. All of the above data should be aggregated and available on the ACoBA website.

42.The Government should nominate a departmental non-executive director on each government department board to take on responsibility for oversight of the Business Appointment Rules. He or she should ensure full compliance with the Rules by Crown servants below SCS 3 and greater transparency. The responsible non-executive director on each board should be identified and announced within the next three months.

19 ACoBA Sixteenth Annual Report 2014–15 para 20.

21 The current members of ACoBA are: Baroness Liddell of Coatdyke, Labour member (from 2013), Baroness Browning (Chair), Conservative member (from June 2014, then Chair from January 2015), Lord German OBE, Liberal Democrat member (from July 2014), Mark Addison, independent member (from June 2012), Mary Jo Jacobi, independent member (from June 2012),Sir Alex Allan, independent member (from February 2015). Terence Jagger, independent member (from April 2015), John Wood, independent member (from 2015).

22 229 Oral evidence, 25 October 2016.

23 Terence Jagger failed to recuse himself from judgment on the application of Rt Hon Lord Lansley to be Chair of UK Japan 21st Century Group, a company in which Jagger had previously served as trustee. Information contained in ACoBA Seventeenth Annual Report 2015 – 16, p44.

25 Oral evidence taken before the Public Administration and Constitutional Affairs Committee, 25 October 2015, Q 170.

26 The most recent version of The Business Appointment Rules for former Ministers and senior Crown servants was published on 21 December 2016.

27 Graph 1: Ministers’ applications to ACoBA

29 Cabinet Office (ACB15).

30 Q6; If measured by the imposition of waiting periods, we can find evidence in ACoBA’s 2015–16 Annual Report (p3) which states that: “the Committee is clear that significant involvement with a sector while in office will increase the likelihood of us recommending a waiting period between an individual’s last day of service and the date an outside appointment can be taken up…it may also be instructive that the Committee recommended waiting periods of 14 appointments in 2015–16 (two of which have yet to be announced) compared to seven in 2014–15 and six in 2013–14”.

32 Public Administration Select Committee, Third Report of Session 2012–13, Business Appointment Rules,
HC 404, [incorporating HC 1762–i–v, Session 2010–12] p.18; para 56; Advisory Committee on Business Appointment Annual Sixteenth Annual Report 2014–2015, p.1.

33 Data for this paragraph is drawn from successive Annual Reports from the Advisory Committee on Business Appointments from 1998–99 onwards.

39 Professor David Hine (ACB04), Point 2.

40 Civil Service Management Code November 2015, point 12.

41 Civil Service Management Code November 2015, p.22; para 3.

42 The Business Appointment Rules for Civil Servants (including special advisers), para 22, state: “Departments will make public on their departmental websites summary information in respect of individuals at SCS2 and SCS1 level (and equivalents, including special advisers of equivalent standing.)”.

46 Professor David Hine, (ACB13), point 4

47 Professor David Hine, (ACB13), point 4

48 Professor David Hine, (ACB13), point 12

49 Cabinet Office (ACB15).

51 ACOBA (ACB08), point 9

52 Professor David Hine, (ACB13), Appendix 2.

53 Professor David Hine, (ACB13), Appendix 1.

54 Professor David Hine, (ACB13). Data in this paragraph was drawn from individual department and agency websites as at 1 December 2016.

21 April 2017