This is an interim report only and we are continuing with our inquiry into this...
This is an interim report only and we are continuing with our inquiry into this area.
Select Committee · Public Administration and Constitutional Affairs Committee
Propriety of governance in light of Greensill
Status: Closed
Opened: 11 May 2022
Closed: 9 Oct 2023
13 recommendations
29 conclusions
2 reports
The collapse of Greensill Capital and the subsequent revelations about its relationship with government and Whitehall have raised significant concerns about the propriety of governance in this country. In April 2021, PACAC launched an inquiry into the effectiveness of rules to prevent conflicts of interest and regulation of access by current and former politicians and …
Reports
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| Fourth Report - Propriety of Governance in Light of Greens… | HC 888 | 2 Dec 2022 | 25 | Responded |
| Third Report - Propriety of Governance in Light of Greensil… | HC 59 | 22 Jul 2021 | 17 | — |
Recommendations & Conclusions
We had expected to see Nigel Boardman’s report before we concluded this phase of our...
We had expected to see Nigel Boardman’s report before we concluded this phase of our inquiry. It was promised at the end of June though, at the time of writing, it has still not been published. In conducting his review, Mr Boardman has had the cooperation of Government and access …
The House has the power to issue summons requiring individuals to attend a Select Committee.
The House has the power to issue summons requiring individuals to attend a Select Committee. However, the process takes time and our timetable was pressing. The fact that we did not initiate this process should not in any way be seen as an acknowledgement that Mr Greensill’s decision to decline …
We are at a loss to explain Mr Gove’s decision not to allow Ms Gray...
We are at a loss to explain Mr Gove’s decision not to allow Ms Gray to give evidence to the Committee, particularly given her willingness to do so. The Osmotherly Rules have never been recognised by Parliament, which maintains its right to call for any individual. However, even if Parliament …
It is unacceptable for Ministers to hide behind the Osmotherly Rules to prevent Select Committees...
It is unacceptable for Ministers to hide behind the Osmotherly Rules to prevent Select Committees from carrying out legitimate inquiries. We will be writing to the Chair of the Liaison Committee to consider ways in which we can clarify the responsibility of officials to appear before Select Committees. (Paragraph 23) …
The appointment of Lex Greensill as a “Senior Adviser on Supply Chain Finance” in the...
The appointment of Lex Greensill as a “Senior Adviser on Supply Chain Finance” in the Cabinet Office, including the means by which he was managed and his conduct regulated, are key areas about which we would have been particularly keen to hear from Sue Gray. Had she not been prevented …
As we have noted, the Chancellor of the Duchy of Lancaster did offer to appear...
As we have noted, the Chancellor of the Duchy of Lancaster did offer to appear in Ms Gray’s place after preventing her from giving evidence to us. However, he would clearly have been unable to add anything of consequence in this regard.
This Committee has previously raised the issue of consultants and the sorts of work they...
This Committee has previously raised the issue of consultants and the sorts of work they are hired to perform in Government. There is nothing unusual in a large organisation hiring external consultants to fulfil specialist roles or provide expertise in supporting the work of the Civil Service. Lex Greensill was …
Nonetheless, there are aspects that would appear to suggest that Mr Greensill’s role was not...
Nonetheless, there are aspects that would appear to suggest that Mr Greensill’s role was not truly reflective of his status as consultant. He appeared to operate with far greater autonomy than we would expect. And we would not normally expect a consultant under contract to the Cabinet Office to be …
At least some of the criticism of the appointment of Lex Greensill to advise on...
At least some of the criticism of the appointment of Lex Greensill to advise on the use of Supply Chain Finance is made with the benefit of hindsight and knowledge of events that were to take place some years later. His appointment appeared to entail the usual declaration of interests …
In our view, there has been insufficient consideration of the policy context in which Lex...
In our view, there has been insufficient consideration of the policy context in which Lex Greensill was brought in to advise on Supply Chain Finance. Consideration of its potential was the policy of the Government at the time. Whilst the Minister for the Cabinet Office may have been unconvinced, there …
The impression might also be drawn that Supply Chain Finance was entirely the responsibility of...
The impression might also be drawn that Supply Chain Finance was entirely the responsibility of Lord Heywood and Lex Greensill. Whilst the then Minister for the Cabinet Office and Prime Minister may have given the impression that they were not involved in its development, both gave speeches endorsing it at …
These are matters to which we shall return later in this inquiry and upon which...
These are matters to which we shall return later in this inquiry and upon which we shall call for further evidence. (Paragraph 64) Bill Crothers
The revelation that one of the most senior civil servants held a part-time position with...
The revelation that one of the most senior civil servants held a part-time position with a private company has unsurprisingly led to considerable criticism. That the company was later to go on to hold government contracts, become embroiled ill- advised lobbying activities involving a former Prime Minister, and to collapse …
Bill Crothers’ move to Greensill Capital was a part of his transition out of the...
Bill Crothers’ move to Greensill Capital was a part of his transition out of the Civil Service and was sanctioned by both his Permanent Secretary and by the then Head of Propriety and Ethics. Greensill Capital’s public sector practice was also still some way in the future. However, even if …
The implementation of the Business Appointment Rules would appear to be more complex than it...
The implementation of the Business Appointment Rules would appear to be more complex than it should be. If an official is seeking to leave the Civil Service, it should be clear and obvious to them and to their Permanent Secretary whether an application to ACOBA is required. If there is …
We would like to have discussed these matters with Sue Gray but were prevented from...
We would like to have discussed these matters with Sue Gray but were prevented from doing so by the intervention of the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, Michael Gove. (Paragraph 80) Propriety of Governance in Light of Greensill: An Interim Report 27
The Cabinet Secretary denied that there is a lack of resource dedicated to compliance issues...
The Cabinet Secretary denied that there is a lack of resource dedicated to compliance issues in Government but admitted that there is a “brigading issue” of making them work together. We accept that Nigel Boardman’s proposal for a Compliance Function might create difficulties by cutting across current compliance operations located …
Government response. The Government states it is not bringing forward new primary legislation to underpin the roles, remits, and codes of standards bodies, failing to provide an update on addressing the 'brigading issue'.
The threat of legal action and the resulting sanction for breaching the Business Appointment Rules...
The threat of legal action and the resulting sanction for breaching the Business Appointment Rules would, in our view, be a sufficient deterrent to ensure that such action would be needed only rarely.
Government response. The government's response discusses the Model Services Contract and HM Treasury guidance on Novel Financing Arrangements, implementing Boardman review recommendations related to Supply Chain Finance, which is unrelated to the recommendation.
The Government has told us that it is exploring contractual mechanisms to ensure that the...
The Government has told us that it is exploring contractual mechanisms to ensure that the Business Appointment Rules are legally enforceable. We support this. In its response to this report, the Government should outline the form that this will take and the sanctions which will apply. It should also outline …
Government response. The Government agrees that the Rules should be incorporated more effectively into contracts and is committed to developing a ‘ministerial deed’ which will be designed to legally commit ministers to the Rules, and any resulting conditions, in the same manner …
Enforcement and the ability to sanction those that breach the Rules is fundamental to ensuring...
Enforcement and the ability to sanction those that breach the Rules is fundamental to ensuring a regulatory regime that commands public confidence. This could be achieved by the Government pursuing those who do not comply with their obligations under the Business Appointment Rules through the courts.
Government response. The Government agrees that the Rules should be incorporated more effectively into contracts and is committed to developing a ‘ministerial deed’ which will be designed to legally commit ministers to the Rules, and any resulting conditions, in the same manner …
Putting ACOBA on a statutory basis is not a prerequisite for the Rules to be...
Putting ACOBA on a statutory basis is not a prerequisite for the Rules to be legally enforced and should not delay it being put into operation. Nonetheless, to reflect the importance of its role and to clarify the status of it and the Rules, we recommend that ACOBA should be …
Government response. The Government does not believe that ACOBA should be established in primary legislation, but will allow this reform package to take effect before any further consideration of statutory change, in the next Parliament.
The Government should implement the CSPL’s recommendation to extend the scope of the Business Appointment...
The Government should implement the CSPL’s recommendation to extend the scope of the Business Appointment Rules to prohibit employment in sectors where the applicant has had “significant and direct” responsibility for policy, regulation or the award of contracts rather than only with firms they have had a relationship with. Such …
Government response. The Government does not believe that the Code, nor any other document, should set out directly indicative examples of sanctions that should apply to particular breaches, with the exception that resignation is expected for Ministers who knowingly mislead Parliament.
We do not think that a system based solely around voluntary compliance with general principles...
We do not think that a system based solely around voluntary compliance with general principles is sufficient to maintain public confidence in the integrity of the system regulating the ‘revolving door’ and have recommended that the Business Appointment Rules are legally enforced and that their content is strengthened. Nonetheless, the …
Government response. The Government agrees that the Rules should be incorporated more effectively into contracts and is committed to developing a ‘ministerial deed’ which will be designed to legally commit ministers to the Rules, and any resulting conditions, in the same manner …
Those who seek only to comply with the Rules sensu stricto and do not apply...
Those who seek only to comply with the Rules sensu stricto and do not apply their own “smell test” when considering future opportunities will continue to risk significant personal reputational damage. (Paragraph 39) Appointments
Government response. The government states that the Independent Adviser can now initiate inquiries, with Prime Minister consent required only in limited cases, and that the next Independent Adviser is expected to retain these powers, which effectively addresses the recommendation by describing current …
The Commissioner for Public Appointments should be placed on a statutory basis in an Act...
The Commissioner for Public Appointments should be placed on a statutory basis in an Act of Parliament at the earliest opportunity. The legislation should make clear that the Commissioner’s role is to ensure that public appointments made by Ministers are in compliance with the Governance Code. It should also detail …
Government response. Minister must therefore retain the ultimate right to make a determination on whether or not a Minister has breached the Ministerial Code. The Independent Adviser's role is to provide advice to support that decision making.
The system of public appointments is predicated on the principle that such appointments are the...
The system of public appointments is predicated on the principle that such appointments are the responsibility of the relevant Minister and it is they that should be held accountable for them. On this basis, we endorse the recommendation of the Committee on Standards in Public Life that Ministers wishing to …
Government response. The government has introduced a new model policy to improve the management of outside interests in the Civil Service.
Rather than only raising concerns, Senior Independent Panel Members should report to the Commissioner for...
Rather than only raising concerns, Senior Independent Panel Members should report to the Commissioner for Public Appointments on the conduct of all significant public appointments processes. The Governance Code should be updated accordingly.
Government response. The government is developing a 'ministerial deed' to legally commit ministers to the Business Appointment Rules and will strengthen contractual clauses for civil servants to clarify post-government employment restrictions, allowing for exploration of further sanctions like financial penalties for breaches.
We have seen the extensive scope for Ministerial discretion in the public appointments process and...
We have seen the extensive scope for Ministerial discretion in the public appointments process and that, in addition to the self-restraint of Ministers, the role of the Commissioner has been vital in ensuring that the principles in Governance Code have been adhered to. The Chairs of the other ethics watchdogs …
Government response. The government agrees that a MoU or Framework Document is essential to clearly set out the roles and responsibilities for it and ACoBA, which is unrelated to the conclusion regarding Ministerial discretion in the public appointments process.
This Committee, alongside other Select Committees, has tried to accommodate the Government when pre-appointment hearings...
This Committee, alongside other Select Committees, has tried to accommodate the Government when pre-appointment hearings have needed to be completed urgently, scheduling them at short notice and reporting almost immediately. However, this has now become routine. Our predecessor Committee was assured that this would be addressed, yet no improvement has …
Government response. The government acknowledges the Committee's concerns about the pre-appointment process, stating that sufficient time must be allowed for this stage to be completed. It also notes the close relationship required for the Independent Adviser on Ministers' Interests to be a …
Too often, the Government has appeared to approach the pre-appointments process as a tick box...
Too often, the Government has appeared to approach the pre-appointments process as a tick box exercise rather than an important component in the public appointments process. The Committee’s patience in this respect is not limitless. We are aware that this frustration is shared by other Select Committees. When making appointments …
Government response. The government's response discusses reforming the Register of Consultant Lobbyists.
To improve transparency, Cabinet Secretary Simon Case told the Committee that he considered the suggestion...
To improve transparency, Cabinet Secretary Simon Case told the Committee that he considered the suggestion that a register of direct appointments be maintained and published as “an obvious thing to do”.167 We agree and recommend that departments begin to compile and publish such registers immediately and that they are kept …
Government response. The government response discusses new guidance on Non-Corporate Communication Channels and reporting requirements for official business, but it does not address the recommendation to compile and publish registers of direct appointments.
The letters of engagement issued to direct appointments are tantamount to a contract of employment.
The letters of engagement issued to direct appointments are tantamount to a contract of employment. They state the purpose for which the appointment is being made, the term length, and their accountability. These letters should be shared with the Chair of the relevant Select Committee when the appointment is made. …
Government response. The government is strengthening and clarifying compliance arrangements across departments.
Recent events have demonstrated the impact of the perceived lack of independence and authority of...
Recent events have demonstrated the impact of the perceived lack of independence and authority of the Independent Adviser on Ministers’ Interests on public confidence in the integrity of the conduct of Ministers. In addition to advising on mitigating Ministers’ conflicts of interest, the Independent Adviser plays a crucial investigatory role …
Government response. The government agrees that transparency of the Business Appointments Rules and how the process is administered is essential to ensure that the public can have confidence in it and that the recommended information should be published. However, the specifics of …
Following the resignation of Rt.
Following the resignation of Rt. Hon. Suella Braverman MP as Home Secretary for leaking restricted material and her subsequent reappointment only a few days later, the Government has said the new Independent Adviser will not investigate matters surrounding her resignation as they took place under the previous Prime Minister. Determining …
Government response. The government's response discusses reforming the regulation of public appointments.
Concerns about the process for appointing the Independent Adviser are longstanding.
Concerns about the process for appointing the Independent Adviser are longstanding. The independence and integrity of the postholder are fundamental to their ability to carry out the role. As with the other standards watchdogs, the power of the Prime Minister to appoint the Independent Adviser should be balanced with a …
Government response. The government keeps the honours, whistleblowing and recruitment processes under continuous review.
We welcome that the Terms of Reference for the Independent Adviser now effectively include the...
We welcome that the Terms of Reference for the Independent Adviser now effectively include the authority to initiate inquiries. We would expect the requirement that Prime Ministers’ consent be given beforehand to be used in extremely limited cases, such as where matters of national security or legal privilege are involved. …
Government response. The government states that the Independent Adviser may now initiate an investigation having consulted the Prime Minister, and is clear that consent would only be withheld in exceptional circumstances, where the Prime Minister considers there are public interest reasons for …
If the introduction of graduated sanctions to the Ministerial Code is to be effective, it...
If the introduction of graduated sanctions to the Ministerial Code is to be effective, it cannot be used as a means to avoid significant sanction for serious breaches. The Government should outline the range of sanctions and indicative examples of breaches to which they might apply. Without this, the suspicion …
Government response. The government does not believe the Ministerial Code should set out directly indicative examples of sanctions that should apply to particular breaches, except that resignation is expected for Ministers who knowingly mislead Parliament, as it's for the Prime Minister to …
The position of the Prime Minister in relation to their compliance with the Ministerial Code...
The position of the Prime Minister in relation to their compliance with the Ministerial Code is a complex one. Whilst the Independent Adviser can initiate investigations into any suspected breach of the Code and should be able to issue private advice on appropriate sanction, it is ultimately for the Prime …
Government response. The government discusses the role of the Commissioner and other ethics watchdogs, and states that Ministers’ nominated candidates for these roles should require the endorsement of the relevant Select Committee, failing to address the conclusion regarding the Prime Minister's compliance …
The landscape of standards regulation is a patchwork, with individual watchdogs with different powers, legal...
The landscape of standards regulation is a patchwork, with individual watchdogs with different powers, legal basis, and appointments processes.168 Placing on a statutory basis those that are not already is an opportunity to regularise them to some extent. However, whilst all have responsibility for overseeing standards, 168 See CSPL Upholding …
Government response. The government agrees that where standards bodies are committees that the Chair of the body chairs the Advisory Assessment Panel for the recruitment of their independent members, but does not believe that these appointments require an extra layer of independent …
The various ethics regulators should continue to be separate and should not be consolidated into...
The various ethics regulators should continue to be separate and should not be consolidated into a single ethics regulator. Nonetheless, coordination is to be encouraged. Current informal coordination could be firmed up by establishing a committee comprising the heads of the various bodies. Placing them on a statutory basis provides …
Government response. The Government is committed to improving transparency around direct ministerial appointments, and will be requiring departments to publish annually a list of DMAs under their remit and will further require that the terms of reference for DMAs are published online.
The purpose of a stronger means of enforcing standards should not be seen by those...
The purpose of a stronger means of enforcing standards should not be seen by those in public life as a substitute for values, nor codes of conduct as the only guide to acceptable behaviour for those in public life. Individuals in public life must recognise the importance of personal restraint …
Government response. The government's response discusses improving transparency around lobbying.
Oral evidence sessions
| Date | Witnesses | |
|---|---|---|
| 12 Jul 2022 | The Rt Hon Sir John Major KG CH | View ↗ |
| 28 Jun 2022 | Darren Tierney · Department for International Trade, Simon Case CVO · Cabinet Office | View ↗ |
| 9 Jun 2022 | Rt Hon Lord Pickles · Advisory Committee on Business Appointments | View ↗ |
| 17 May 2022 | Rt Hon Sir Peter Riddell CBE · Cabinet Office | View ↗ |
| 15 Mar 2022 | Sir Alex Allan · House of Commons, Sir Philip Mawer · House of Commons | View ↗ |
| 11 Jan 2022 | The Lord Evans of Weardale KCB DL · Committee on Standards in Public Life | View ↗ |
| 2 Nov 2021 | Nigel Boardman | View ↗ |
| 13 Jul 2021 | Propriety of governance in light of Greensill | View ↗ |
| 8 Jun 2021 | Bill Crothers · Cabinet Office, Ian Watmore · Cabinet Office, Sir John Manzoni KCB · Cabinet Office, The Rt Hon Lord Maude of Horsham · Member of the House of Lords | View ↗ |
Correspondence
| Date | Direction | Title |
|---|---|---|
| 25 Jul 2023 | To cttee | Letter from Rt Hon Oliver Dowden MP, Deputy Prime Minister and Chancellor of th… |
| 25 Jul 2023 | From cttee | Letter to Rt Hon Oliver Dowden CBE MP, Deputy Prime Minister and Chancellor of … |
| 23 Jun 2021 | To cttee | Letter from Suzanne Heywood on Propriety of governance in light of Greensill, d… |
| 23 Jun 2021 | To cttee | Letter from John Manzoni on Propriety of governance in light of Greensill, date… |
| 25 May 2021 | — | Correspondence with Simon Case, Cabinet Secretary on propriety and ethics in Go… |
| 26 Apr 2021 | To cttee | Letter from Simon Case, Cabinet Secretary on management of outside interests by… |
| 26 Apr 2021 | To cttee | Letter from Chair to Simon Case, Cabinet Secretary on Audit of Civil Service du… |