Oral evidence: Propriety of governance in light of Greensill, HC 212

Oral evidence, 28 June 2022.

Witnesses

Simon Case CVO and Darren Tierney.

Chair

Good afternoon and welcome to the Public Administration and Constitutional Affairs Committee. Today the Committee is continuing its inquiry into the propriety of governance in light of Greensill. We are joined this afternoon by the Cabinet Secretary, Simon Case, and the director of propriety and ethics at the Cabinet Office, Darren Tierney. Good afternoon. Would you introduce yourselves for the record, starting with the Cabinet Secretary, please?

Simon Case

Thank you, Chair. Simon Case, Cabinet Secretary.

Darren Tierney

Darren Tierney, Director General for Propriety and Ethics in the Cabinet Office.

Chair

Thank you. Cabinet Secretary, the late Lord Heywood described the Cabinet Secretary as the “guardian of propriety and ethics, ministerial and Civil Service conduct”. At your last appearance, you told us you had been advised by predecessors that propriety and ethics matters most, and is sometimes the most difficult aspect of the Cabinet Secretary’s role. Have you found that this to be the case?

Simon Case

Definitely, is my straightforward answer to that, and I am happy to expand on why—I am sure that will be of interest.

Chair

Please do, yes.

Simon Case

I am sure Darren, the man who spends 100% of his time on it, may want to comment as well. I think that propriety and ethics issues are difficult for a couple of different reasons. The first is that some of the issues you deal with are very sensitive and highly personal, and you are dealing with matters that can define people’s careers. At a human level, there is a real challenge to dealing with these issues and making sure that they are dealt with properly but also compassionately. The second reason is a more structural question, which is that sometimes the propriety and ethics world involves managing what can be a juxtaposition in the Civil Service Code where the duty to support the Government of the day to the best of your ability and upholding the values can create challenges.

Chair

It is conflict rather than juxtaposition though.

Simon Case

It is not a permanent conflict. Let’s not quibble about the language, but sometimes there can be a tension that you have to manage. I don’t think it is a great secret to talk about the current circumstances. The Government of the day are not remotely afraid of controversial policies. They believe they have a mandate to test established boundaries. They take a robust view of the national interest and of how the Government should protect and focus very much on accountability to people in Parliament, not on the unelected advisory structures.

Chair

What are the established boundaries?

Simon Case

I think that there are all sorts of questions there, many that are being debated in Parliament all of the time, and many policy issues. The Northern Ireland Protocol Bill is one that is obviously receiving a lot of attention at the moment where, as I said, the Government take a very robust view of the national interest and how to go about protecting it, and Parliament is debating that fully at the moment.

Chair

Is it a question of policy or conduct though?

Simon Case

In most of these issues both questions come up. I think sometimes we can get a bit confused about the propriety and ethics and focus just on conduct, but actually conduct, as it reveals itself through policy decisions, is what matters. Is due process being followed? Are the right people being consulted in the right order? Are the decisions being taken in a way that fully accounts for all the obligations on the Civil Service, Ministers and so on?

Chair

Do not all Governments not have a mandate, presumably through election, to test established boundaries though?

Simon Case

I think on election, yes, that is certainly true, but how they exercise it varies from Government to Government.

Chair

How would you characterise its current exercise?

Simon Case

I think I already have. It is a Government that are not afraid of taking on controversial policies and dealing with issues that cause proper debate in Parliament. The Government are not afraid of doing that.

Chair

Debate in the country?

Simon Case

Yes, which is, after all, the nature of a healthy democracy.

Chair

Indeed, and you maintain that it is predominantly on policy rather than conduct?

Simon Case

As I say, I think the two are intertwined.

Chair

Thank you. What proportion of your time do you spend on these issues of propriety and ethics, roughly? How often does it crop up?

Simon Case

It varies depending on the circumstances. If I guess, 10% or 30% of my time but it comes up in a number of different guises. For example, there are difficult policy issues where policy ambition raises questions around ethics or legality and in those instances you spend a lot of time with officials and Ministers on those processes. As I say, it is where propriety and ethics is intertwined with policy making and delivery. The second area is specific casework. It is mostly Darren and his team who deal with that, but there are times when that casework has to come to me because I need to take action. Finally, an area where I have spent a lot more time recently is focusing on questions around training and culture. I think that this has come up over and over again in a number of issues that I am sure we will want to explore today. I have spent a good deal of my time recently with senior colleagues and the people we are charging with revamping how we do Civil Service training and induction to make sure that values and ethics are more fully embedded in the training and induction programmes.

Chair

Do you think that is where the issue lies within the Civil Service and with the need for training and induction programmes?

Simon Case

I think that there are lots of different aspects to propriety and ethics. The structures that you put in place are part of that, culture is part of that, and things like training are an important part of all of that.

Chair

Given that two independent advisers to the Prime Minister have resigned since you became Cabinet Secretary, do you assess your own performance in the role of Cabinet Secretary in the light of those resignations?

Simon Case

No, I do not. The issues that resulted in Alex Allan’s resignation were largely before my time, so I am not so up to date on the details of those. Alex Allan and Lord Geidt are both very fine public servants who I have worked closely with over a long time. The IA job is undoubtedly a difficult one, especially in that context that I described, perhaps even more so now that I think more and more people are asking these advisory functions to take on the role of internal—well, a stronger internal challenge is not quite the right phrase, but there is certainly a lot more pressure on these roles than there was before.

Chair

Internal challenge. I think you have hit on something very interesting there and the delegation of that responsibility to others. Is that because of an absence of political challenge? You are Cabinet Secretary, aren’t you? You are Secretary to the Cabinet?

Simon Case

Yes, that is right. Sorry, are you inviting me to comment on relationships between the Cabinet and within the Cabinet, because I am going to decline to do that?

Chair

I thought you might.

Simon Case

Thanks for the kind invitation, but that is not a space I—

Chair

Well, I thought I would change the subject slightly. Going back to the initial topic, whose decision was it to consult Lord Geidt about the prospective breach of World Trade Organisation rules? It seems a little odd to consult him on that, doesn’t it?

Simon Case

I believe it was the Prime Minister’s decision.

Darren Tierney

Yes, it was the Prime Minister who wanted to consult his adviser, as he said.

Chair

Mr Tierney, is it normal practice for the independent adviser to vet matters of trade policy or international law? If not, why was it deemed necessary on this occasion, if you know?

Darren Tierney

It is really about matters of policy. It would usually be, if that area of policy was going to create an issue for the code. As the PM said in his exchange with Lord Geidt, the decision that had not been made on that but that they were considering might conflict with the Government’s obligations under WTO law and that is why he wanted to consult him.

Chair

Was he consulted on the Northern Ireland Protocol Bill?

Simon Case

No, because code issues didn’t arise, because of the—I think they are publicly laid out, the AG has made—

Chair

I thought that was a piece of legislation that challenged the established boundaries though.

Simon Case

Yes, it certainly did, but the code in the end was not in question, so there was no reason to—I don’t think anyway. I don’t believe Lord Geidt was consulted about the protocol.

Chair

Do you think it was just an excuse to resign?

Simon Case

Do you mean an excuse on Lord Geidt’s—

Chair

Yes. It seems a rather obscure thing to resign over, doesn’t it?

Simon Case

I think, as you said, Chair, on announcement, Lord Geidt is a very fine and decent public servant. I don’t suspect it is a decision he took particularly lightly.

Chair

No, I don’t think he did at all, and I stand by that entirely, but it was rather obscure, wasn’t it?

Simon Case

I am not here to speak for Lord Geidt. I think he set out his reasoning in his letter to the Prime Minister and the Prime Minister responded. I would feel uncomfortable about putting words into Lord Geidt’s mouth.

Chair

Quite. On the UK Internal Market Act, I think the quote was a specific breach of international law. Was the independent adviser consulted on that as well?

Simon Case

I don’t know. It was before my time. We would have to check.

Chair

Would you mind? It would be very helpful if you could.

Simon Case

No, at all, yes.

John McDonnell

Did you advise the Prime Minister to consult Lord Geidt?

Darren Tierney

No, I think it was something he wished to do. I then advised him on the issues and I spoke to Lord Geidt before he spoke to the Prime Minister.

John McDonnell

Did you flag it up as an issue for further advice other than your own advice?

Darren Tierney

Did I flag—

John McDonnell

The World Trade Organisation breach. Did you flag that up as an issue?

Darren Tierney

Yes. I was involved in the process building up to the decision, which as I understand it still has not been made. I flagged to No. 10 that the decision, if indeed we depart from the WTO obligations, would raise an issue under the code and we would need to consider how do we engage with Lord Geidt—with the Prime Minister who wanted to do that.

John McDonnell

I am trying to get this clear. You flagged up it could be a potential breach of the law, effectively. He didn’t listen to you so he then wanted a second opinion, did he?

Darren Tierney

No, that would be to mischaracterise. In the policy-making process, the trade policy people had established that if we were to go where they were heading, that might breach the WTO rulebook.

John McDonnell

That became an ethical standard issue.

Darren Tierney

That became something—

John McDonnell

You advised that it is an ethical standard issue?

Darren Tierney

They came to me about obligations under the code, civil service and ministerial, and that is when I flagged the—

John McDonnell

You flagged that up. He didn’t accept your opinion and he wanted a second opinion from Lord Geidt.

Darren Tierney

It was not really a matter of opinion. I was flagging the risks to it, so he wanted to consult his adviser.

Chair

Going back to Lord Geidt and seeking to find a successor to him, what role are you playing in that recruitment exercise, Cabinet Secretary?

Simon Case

I think that the Committee will have seen that the Minister for the Cabinet Office set out how we are going about this at the Dispatch Box last week. Ministers are doing a quick review of the requirements of the role and Darren is leading on that with advice to Ministers, and the way to do the recruitment will be included in that advice. The decision has not been taken yet on the recruitment process.

Chair

Lord Geidt said in his post-appointment hearing with this Committee a year or so ago that his name was alighted upon. Will there be a clearer recruitment process this time? Do you envisage quite a few applicants?

Simon Case

As I said, Ministers have not taken the decision yet. I think we wrote to the Committee spelling out the process last time before you did your appointment hearing, where we set out criteria that we were looking for for the role, and then provided the Prime Minister with a list of names and the Prime Minister decided which of the list he thought we would like to talk to and offer the role to.

Chair

Will you be playing an active role in seeking that person?

Simon Case

Obviously it is a decision for Ministers to take on how they want to run it. I would expect so, but the decision—

Chair

Did you last time?

Simon Case

Yes.

Chair

Did you ask him last time to do the job?

Simon Case

Did I talk to Lord Geidt before taking on the job? I certainly did.

Chair

Did you twist his arm?

Simon Case

Did I twist his arm? It is for Lord Geidt to characterise, but I don’t think that is right. As I said, I have known Christopher Geidt a long time, and he is a very fine and committed public servant who has served in a number of different roles and seemed to have all the required experience for this.

Chair

It is peculiar, though, that so recently we had the terms of reference for the independent adviser, which were much trumpeted as apparently great reforms, and Lord Geidt is saying they are at the low end of ambition. Why is such a new review of the post deemed necessary now?

Simon Case

Some of this is to do with the factors that I have set out. It is now very clear that this independent adviser role is a much more public role than it has been before. There are questions about the right support that any adviser would need—I think genuine questions about whether it is a role that one individual can fulfil, and all those sorts of things.

Chair

What measures are in place to provide advice on ministerial interests and the Ministerial Code in a period when there is no independent adviser?

Darren Tierney

It is worth putting that question to the two roles—the two functions that the independent adviser has. The first is the auditorial function of giving advice on potential conflicts of interest and Ministers’ interests. That can continue with Permanent Secretaries providing that advice to Ministers, as their interests might change, and they can seek advice from me and my team on that. That process culminates in a six-monthly publication of ministerial interests. We have only just done that, so we are still five or six months away from the next one. On the other function, which is the investigatory function, the Ministerial Code is clear that the Prime Minister can advise Simon or me to do fact finding on his behalf or to approach the independent adviser, so there is still a function there that can be done.

Chair

Are you taking on any outstanding investigations?

Darren Tierney

I have to give advice to the Prime Minister upon his return this week on how to handle the one live investigation that is going on. I don’t want to speculate on what might happen with that because we have not told the parties involved about what might happen. The Prime Minister has not made a decision yet.

Chair

He will make that decision upon his return?

Darren Tierney

Yes.

Chair

Mr Case, how appropriate is it for a serving civil servant, either you or Sue Gray—a name at random—to conduct investigations into the conduct of the Prime Minister?

Simon Case

Very difficult and to be avoided wherever possible. The role of the Civil Service is to support the Government of the day while upholding values. Its function is not to provide some sort of judicial function over Ministers. In fact, if you go back through history, the role of the independent adviser was created in part to deal with that tension.

Chair

Do you think that there is a lack of general political leadership? What would you have otherwise—

Simon Case

Again, you are inviting me to starting commenting on political matters.

Chair

That pressure on the Civil Service must come from somewhere for you to take on that role, which clearly is an invidious one to have. Where does that come from? It must come from somewhere.

Simon Case

In the end it is decisions for Ministers, and ultimately the Prime Minister, to take. The Civil Service advises and Ministers decide. That is how it has been and when decisions are taken we have to do our utmost to implement those decisions.

Chair

Do you agree that there is a legitimate concern for somebody to be investigating the people who are ultimately responsible for their immediate career prospects?

Simon Case

Yes, I agree. You said invidious. It is the challenge of asking the Civil Service to fulfil these functions. Some people use the language of the Civil Service being independent. That is not correct. The Civil Service is not independent. Impartiality is one of our four values, but the Civil Service is there to support the Government of the day and, as you say, asking civil servants to do these investigations puts them in a genuinely difficult position.

Chair

Did you advise the Prime Minister that the independent adviser—Lord Geidt at the time—would be the most appropriate person to investigate the alleged breaches of Covid-19 restrictions in Downing Street?

Simon Case

You will understand that by long-standing convention I am not going to go into the details of the advice given to the Prime Minister, but I point the Committee back to the original terms of reference that we published that made it clear that questions of ministerial conduct should be for the independent adviser—it is what the original terms of reference said.

Chair

But they weren’t, were they?

Simon Case

No. As the Committee will know, I recused myself after a short period of investigation and was not involved in the decisions about the conduct of the investigation thereafter, so I can’t talk personally to that.

Chair

No, but speculatively, what is the point of an independent adviser if not to investigate such matters?

Simon Case

I think the Committee addressed this with Lord Geidt—

Chair

No, your view on it.

Simon Case

—which was that there is a role that is spelt out in the Ministerial Code that the Prime Minister can ask the Cabinet Secretary or the Cabinet Office to establish the facts, but the decisions and the adjudication, and the advice about that on the Ministerial Code aspects, have to come through the independent adviser, and that was upheld. Sue Gray’s report did not go into questions of the Prime Minister’s conduct in relation to the code.

Chair

On that report, as you mentioned it, are you aware that Alex Chisholm asked Sue Gray to redact or indeed remove names from her report?

Simon Case

No. As I said, I recused myself from the process, but I will let Darren explain the process.

Chair

If you wouldn’t mind, and Mr Tierney can have a go in a minute, you had no conversation with Mr Chisholm to ask Ms Gray to redact or remove names?

Simon Case

No. I will ask Mr Tierney to explain the process because, as I said, I was recused and very specifically did not involve myself in these matters.

Chair

Bearing in mind how you recused yourself, would it be appropriate for Mr Chisholm to have asked Ms Gray to remove names from her report?

Simon Case

I will ask Mr Tierney to explain the process.

Chair

I am not too fussed about the process. It is just on the principle.

Simon Case

There were legitimate roles that fell to the accounting officer of the Department that was responsible for publishing that report and Mr Chisholm took that responsibility seriously. I am very happy to ask Mr Tierney—

Chair

Mr Tierney, what are those legitimate roles?

Darren Tierney

As we did with Sue Gray’s first report and as we would do with any other independent report when it comes to the Cabinet Office, the Cabinet Office publishes it. The accounting officer for the Cabinet Office, Alex Chisholm, runs through a series of tests before publication. It is not about the substance of the report, but it is about, for example, whether there are any ongoing legal proceedings that would mean we could not publish, has someone checked what is in the report for defamation or employment law issues, and thirdly—and importantly on this one—are there any staff welfare concerns that would get in the way of publication. It was on that basis that the accounting officer, Alex Chisholm, got involved and spoke to Sue Gray about staff welfare.

Chair

There was one staff member whose name was removed, wasn’t there?

Darren Tierney

Yes.

Chair

Were there any others who requested to have names removed?

Darren Tierney

Not as far as I am aware, no.

Chair

Thank you. I will go to Tom Randall, please, with a change of subject.

Tom Randall

Looking at Nigel Boardman’s inquiry, he noted the relative lack of resource dedicated to compliance within the Civil Service. To what extent do you agree with that and is it a fair comment?

Simon Case

First of all, I think that one of the things that Nigel Boardman usefully did for us was to bring his financial services expertise to these questions. He challenged us because at the moment I am not sure it is a lack of compliance resource. Inside government, compliance resource is split between a wide range of functions: human resources, finance departments and—Permanent Secretaries have obligations about managing public money—the accounting officer responsibilities. Private offices tend to be at the forefront of some questions. I am not sure it is necessarily a lack of overall resource, but it is a brigading question, which I know Nigel Boardman lit upon. Darren, do you want to add?

Darren Tierney

Yes. At the time I discussed this with Nigel Boardman and we were having the same kind of discussion. This is still a choice that Ministers have not quite made yet about whether you create a new function in government called “compliance” that does not exist in our terminology but, as the Cabinet Secretary was saying, it exists in various other places in our system. I think that the debate we are having in government is the extent to which you want to bring that large financial institution compliance mindset into a system that is not a bank and where there are already lots of checks and balances, including quite fundamentally the accounting officer role. I am a bit nervous that we don’t undermine some of the quite fundamental compliance functions we have already in government by creating a new function. Rather what we could do is make sure the existing functions work better, and we have been doing some of that since Nigel Boardman’s report.

Tom Randall

Can you say what the current size of the propriety and ethics team is, and broadly what your main tasks are?

Darren Tierney

There are about 20 people in the core propriety and ethics team. We are split across three main teams. The first is a casework team that does a lot of the reactive work. It is very demand-led. It depends what issues people are raising. I remain very encouraged that it gets so much incoming traffic from Ministers, special advisers and Permanent Secretaries, because they are asking about the right way to do stuff. That team spends a lot of its time advising people on the best way to get Government business done within the codes and rules. There is another team that does a lot of the policy work. They also sponsor the Civil Service Commission and they are responsible for sponsoring ACOBA and some of the other wider policy considerations. Then there is a small team that provides direct support to the independent adviser when in post.

Tom Randall

As you noted, Boardman recommended that a cross-Government compliance function be created. I was going to ask whether any steps had been taken towards creating that but, from your previous answer—

Darren Tierney

We have not taken any steps towards creating it. We have started debating with Ministers about whether or not we want to create this function, as I said earlier on. In the interim we have started improving some of the processes and procedures that Nigel Boardman flagged, particularly around managing outside interests for civil servants, which I am sure we might come on to. We have been focused more on addressing some of the problems that Nigel identified rather than doing big structural changes.

Simon Case

I think the question here is whether if you create a single compliance function, do you somehow look like you are removing the function of a very large number of people to uphold standards and values? For me, that is at the heart of the question about whether that is the right way to go.

Chair

Could I clarify one of the previous questions and the answer? Was the advice sought from Lord Geidt minuted anywhere—the request or anything?

Darren Tierney

I am not sure about that. The Prime Minister and he had a conversation. I don’t know if it was minuted.

Simon Case

We can check; we can find out.

Chair

That is very kind. A last sort of question about all things Lord Geidt, on the issue around the Prime Minister’s personal phone and the error that occurred with some messages not being supplied to Lord Geidt when he carried out that particular investigation. For the record, can you explain what on earth happened with the Prime Minister’s phone?

Simon Case

There are limits about what we can say in open session. I think the Prime Minister put what we could into the public domain in his exchange of letters. I think that there was a well publicised security breach around the Prime Minister’s phone that put that phone very largely beyond use, and the Prime Minister explained that in his public exchange.

Chair

Do you know if the messages were wiped from his phone and, if so, from which period that covered?

Simon Case

I am afraid I don’t.

Chair

Would you be able to furnish us with that information?

Simon Case

If that information is available, we will furnish you with it.

Chair

Further to that—if you can’t answer now, I will understand but, if you can, furnish us with it again—were any officials’ phones wiped similarly, or indeed those of Ministers who had received messages and had exchanges on WhatsApp with the Prime Minister?

Simon Case

I don’t know. I will have to go away and check the extent to which that breach affected others.

Beth Winter

When you last gave evidence to this Committee, you were able to confirm that Lex Greensill was not employed as a special adviser but it was unclear as to what his status was. It has subsequently emerged that he was employed as a consultant even though Boardman considered his role to be more an unregulated ministerial appointment. Who decides whether an appointment is a consultant rather than a special adviser or an unregulated appointment?

Simon Case

Darren is at the front of these conversations so I will let him answer.

Darren Tierney

Ministers decide on what basis they want to bring in people. I think it is important to remember that Nigel Boardman’s actual finding, although it was still unclear, was that he thought that Lex Greensill was more like a direct appointment, in our language, so not a consultant or a contractor, but more like a direct appointment. Since the Nigel Boardman report, we have clarified, and HR teams have sent out across Whitehall some new guidance on routes into government so that we can make it much clearer how one gets employed in government. That was one of the big issues with Lex Greensill’s status. We have clarified that now and broadly speaking we have sent out some guidance that is clear that you are either a civil servant—that includes temporary civil servants in the form of special advisers—or you are a ministerial appointee, a direct appointment or public appointment or a non-executive, and then broadly speaking there is a commercial bucket where we would procure services from consultants or contractors.

Simon Case

I think one of the main lessons that is very clear on reading Boardman is that Lex Greensill’s employment status was not ever as clear as it should have been, which is why we have taken these actions to bring absolute clarity.

Beth Winter

Do you think that it will bring clarity into the guidance?

Simon Case

That is certainly the intention behind it, but we will have to keep monitoring.

Beth Winter

Mr Case, what rules, if any, define the scope of the work that a consultant can undertake in government? In particular, is there anything to prevent a consultant acting as a de facto SpAd?

Simon Case

The work of consultants will be spelt out in the procurement contract: the scope of the work, how long they are asked to do it for and how they dock into the permanent system. That is how consultants mostly work. They are brought in for specific projects, which is obviously different from the role of special advisers, who are temporary civil servants brought in to—

Beth Winter

How does the management of conflicts of interest differ between consultants and SpAds?

Darren Tierney

Broadly speaking, for a consultant whose services we are buying through a procurement process, they are obligated to tell us up front what they think any political, social or financial conflicts might arise with the work that we are trying to employ them to do. They are responsible for resolving any potential conflicts that arise. It is a different process for special advisers, but since 2020 we have had a single model contract for special advisers, which includes the process by which they declare their potential conflicts of interest. Relevant Permanent Secretaries in Departments look at those declarations and they decide how to resolve any conflicts. Once a year we publish a report on special advisers, which includes any relevant conflicts that should be disclosed to the public. That is in annual reports every year. The next one is due out next month.

Beth Winter

Lex Greensill’s position—his status—was unclear, so in dealing with any conflicts of interest at the time—

Simon Case

I believe that steps were taken.

Darren Tierney

I think Nigel Boardman said in his report that it was unclear what his status was, but he thinks, if he had to come down on it, it was more like a direct appointee than anything else, although it was unclear at the time. Lex Greensill declared some interests when he was initially appointed and at subsequent reappointments, but the Boardman report highlights the fact that those conflicts, while declared, might not have been particularly well managed throughout.

Beth Winter

Thank you. Greensill was told to consult the Cabinet Office before taking new work for three months after leaving. Is that length of time sufficient, in your opinion?

Darren Tierney

With the nature of his, frankly, slightly unclear status at the time, he was not a civil servant or a Minister or a special adviser, and they are the people caught by the ACOBA rules. It is clear what has to happen to them. It was not clear what should have happened to Lex Greensill. Now if you are a direct appointment, it is clear, and if you are a direct appointment, upon appointment, you are told that you have to abide by the code for good conduct for board members of public bodies, and in that there is a much more prescribed way of managing conflicts, including how you exit.

Beth Winter

Are conflicts for those who are remunerated managed differently from those who are receiving a fee or salary?

Simon Case

Remuneration or otherwise is not the determining factor about conflict of interest management. It is to do with the route that you come by, as Darren said: civil servant, Minister, SpAd and so on. That is what determines; it is not remuneration.

Darren Tierney

It was helpful insight from Nigel Boardman to make clear, because I think there was a tendency at the time that if someone was unpaid, you should treat them slightly differently. He was clear in his previous report that he did for the Cabinet Office, and the one he did for us, that paid or unpaid is totally irrelevant and should be subject to the same rigour.

Beth Winter

The last one from me is about the fact that non-government executives are reported to have been involved with Greensill Capital or its subsidiary. Given the apparent importance of their roles, are you satisfied that the management of NEDs’ real or potential conflicts of interest are robust enough, Mr Case?

Simon Case

Do you want to talk through the approach?

Darren Tierney

When non-executives are appointed, they are told that they are subject to the code of conduct for board members of public bodies. In that there is a prescribed process for declaring their conflicts. Upon appointment, they will declare their interests to the relevant Permanent Secretary. They will then work out if any of those are an actual or perceived or potential conflicts, and they will put in place mitigating factors to manage that.

Beth Winter

Mr Case, do you feel that they are robust enough?

Simon Case

Various issues have come up around non-executive directors that we have been looking at. We have gone back through the conflicts of interest process. Ministers also going to take on the recommendation of the Committee on Standards in Public Life that non-executive director appointments are done through the standard public appointments process. I think that those things together should mean that we have a much more robust approach to the appointment of non-executive directors and then the management of them when they are working.

Beth Winter

Whose responsibility is it to ensure that NEDs’ conflicts of interest are stringently managed and—

Simon Case

First and foremost, it is a job that falls to the Permanent Secretaries in the Department. They can come to Darren and his team for advice if they need to, but it is very much a role that sits within the Department.

Beth Winter

Why aren’t non-executives subject to the business appointments rules or ACOBA?

Darren Tierney

The rules only apply to civil servants, Ministers, special advisers or other Crown servants. Non-executives are none of those. They are also a bit more distant from decision making by their nature. They are non-executive, so they are not subject to the same kind of approach upon exit from government.

Beth Winter

Should they be subject to those?

Simon Case

I think that there is a balance in this. As Darren said, these are non-executive roles, so they are a bit more distant from decision making. Non-executive directors are a useful way of getting in outside expertise to help to challenge Departments and to move them forward. I think that we need a proportionate approach. If we put in place the full business appointment rules, ACOBA, we would find it very difficult to recruit the sorts of people we want, but we need to keep it under review.

Beth Winter

You don’t feel that they should be subject to the same rules?

Simon Case

As people who are working full time in government, no. I am not sure at the moment that would be a proportionate response.

Lloyd Russell-Moyle

I will follow up on that. What rules do you think they should have to follow?

Darren Tierney

It will depend on which body they are sitting on. The code of conduct that I mentioned that they are subject to has a provision in it that talks about their having to abide by the exit conditions of whichever body they are sitting on, and some of those will have conditions on what they can do afterwards.

Lloyd Russell-Moyle

You are saying that business appointment rules are too stringent. Which of those rules are too stringent?

Darren Tierney

I am not saying the rules are too stringent. I suppose what I am saying is that if you have been the Defence Secretary and you want to leave and go and work in the defence industry, the process is much more stringent because you were involved in the decision making. That is more rigorous than it is for non-executives.

Lloyd Russell-Moyle

Are you saying that no rules should apply at all to non-executives, or that there should be a slightly different set of rules to reflect their different roles? If it is the latter that you are nodding to, what rules do you think should not apply to them and which rules should apply to them? You are saying it should be a different threshold, I get that argument, so practically which ones are you talking about?

Simon Case

Non-executive directors by their nature are non-executive and they are very part-time figures. It would not be proportionate to stop them from taking—what you don’t want is non-executive directors taking any of the information that they have gathered by sitting on departmental boards and commercialising that. That is the one thing in any of these things that we are trying to stop. It creates a very clear conflict of interests. But the business appointment rules and the process that Ministers, civil servants and special advisers go through is a much longer process. As I say, I think it needs to be a proportionate approach.

Lloyd Russell-Moyle

Is that proportionate approach in place at the moment, or is there no approach in place at the moment?

Simon Case

Darren set out what the conflicts of interest management process is. Afterwards, I have to look to Mr Tierney on this.

Darren Tierney

It varies depending on which public body the non-executive was sitting on. There are rules in place on some bodies.

Lloyd Russell-Moyle

Each body is different. There is no standard set of rules for non-executive directors and you can’t quite tell me what standard should be set. Am I summarising that right?

Darren Tierney

It is a very disparate group of bodies and non-executives are subject to the code of conduct that I mentioned, but it will depend on which public body they are in and what restrictions are placed on them.

Chair

If there is such a path, for example, and there is a non-executive director being appointed, do they have to make a declaration of being a connected party perhaps?

Darren Tierney

Yes, upon appointment they have to declare all relevant interests and then the Permanent Secretary will work with them, if there is a conflict, to mitigate those conflicts as far as possible.

Chair

Is that mitigated in the Department of Health?

Darren Tierney

Which interest are you referring to?

Chair

The former Secretary of State and his non-executive director.

Darren Tierney

I am not sure what interests she would have declared at the point of her appointment. She did make a declaration of interest. Are you referring to Ms Coldangelo?

Chair

Indeed.

Darren Tierney

At the time, from memory, she did make a declaration of interests and she had some commercial arrangement, which I think we put mitigations around.

Chair

I am less interested in the commercial arrangement and more about whether a connected party or not.

Simon Case

I am not sure that was declared to us, Chair.

Chair

That is fair enough. Sorry to interrupt you, Mr Russell-Moyle.

Lloyd Russell-Moyle

I should make some progress, but thank you very much. Mr Tierney, following the reports on Bill Crothers’s role in Greensill, you instructed Permanent Secretaries to ascertain whether other senior officials had second jobs. Shouldn’t this information already have been held and is it now routinely collected in an organised way?

Simon Case

As I think I spelt out to the Committee in the letter, it should have been collected before, but it now is being regularly collected and will be published annually in the departmental annual report and accounts.

Lloyd Russell-Moyle

What level does that go down to? It is senior civil servants. Does it go down further?

Darren Tierney

All senior civil servants that we have asked.

Lloyd Russell-Moyle

What is behind the decision to not make that go down further to any civil servant involved in policy making?

Darren Tierney

To be clear, the declaration still has to happen. If you are not in the Senior Civil Service and you want to take on an outside job, you still have to get approval for that from your line managers—that still has to be declared. We are saying that we will make that an annual return within the public and annual reports only for the SCS on the basis that Senior Civil Service is more involved in decision making.

Lloyd Russell-Moyle

Could there not be a case where a team of civil servants is working on a policy—junior civil servants—and if they all have outside interests in a particular area, that might provide a conflict that would need an assessment beyond just the line manager, and would need a wider purview to see that pattern? Do you understand what I mean? If it is just agreed case by case, there is no one who can step back and see that all these people have a particular interest, or that all these people in numerous Departments seem to have a network of interests that we are not quite ascertaining.

Darren Tierney

I think it is a very unlikely scenario, if I am honest. Line managers would know because junior civil servants would have to seek their approval. I would like to think that the kind of thing you are describing would be picked up, but I am struggling to see quite how such a scenario would emerge.

Lloyd Russell-Moyle

Why not record it centrally?

Simon Case

I think a lot of it will just be about the reporting burden that we place on Departments. They need to keep it themselves—they need to be doing this—but reporting everything centrally is another reporting burden.

Lloyd Russell-Moyle

Why not ask the Department to report?

Simon Case

Internally. We have asked them all to assure—as part of the letter that the Committee saw, we have been clear with Departments that although we were setting the bar for them reporting into us of the Senior Civil Service, we have asked them to make sure, working through their audit committees, that Permanent Secretaries and audit committees are satisfied that throughout the Department they have proper processes in place for managing conflicts of interest.

Lloyd Russell-Moyle

There is not a compilation of that departmental—

Simon Case

Not at junior levels.

Lloyd Russell-Moyle

In your letter to the Committee of April 2021 you outlined new measures to address these conflicts of interest, and you have just mentioned some of them for senior officials and for other board members. Have any of the new disclosures revealed any concerns that you were previously unaware of?

Simon Case

Nothing concerning. What it has proven is it is quite rare for civil servants to have outside employment. Where it does—as we have said to the Committee before, but I will ask Darren to correct if this is wrong—it is largely people working in other parts of the public estate—doctors; reservists—where people have got remunerated outside work. It is coaching and that sort of thing.

Lloyd Russell-Moyle

This might be something to celebrate as well.

Simon Case

Charitable involvement—that sort of thing. I am not aware of anything that has come up through the process.

Darren Tierney

I think that is right. To your point about celebrating, we are talking about paid outside interests here, but of course we do want civil servants contributing in their societies. They do on governing boards, trusteeships and the like, and we don’t want to get in the way of that.

Simon Case

If we step back from the broader questions and the issues involved—I know that the Committee has talked about this before—the prize we are looking for is making sure we can bring the outside expertise into government that we need to help to modernise the way we deliver public services. Also we want civil servants who have varying—we want civil servants who are out there making broader contributions to society. I think Nigel Boardman himself said in front of the Committee that the circumstance of Lex Greensill is very rare. I think he said he had not found any other example like it, and he asked and we had not either. But I don’t think that means that we should be complacent about these processes.

Lloyd Russell-Moyle

You are confident that the current conflicts of interest regime that is now place will prevent any other nasty surprises coming along the way?

Simon Case

I think it is a step forward. It is early days. We are not through a full cycle of doing it. I think once we publish the first set of annual report and accounts—this is the importance of transparency on this—other people will be able to judge whether we are getting it right about the sorts of things that civil servants can do outside. I think it is too early to say we have absolute confidence, but let us allow the process to run through a couple of times and then reflect on whether it is good enough.

Lloyd Russell-Moyle

It is difficult to ascertain whether the fact that you have not received any information that you were unaware of is because you are asking the right question, or whether it is because there was nothing else there. I am trying to ascertain how confident you are that your net is now wide enough to get all the issues.

Simon Case

I think because of the focus that there was on Greensill I have a pretty high degree of confidence that, across the Civil Service, Permanent Secretaries are very seized of the importance of getting this right. There are real reputational issues behind this—potentially substantial ones—and we have to get that right. I think that people are taking it seriously but, as I said, we have to let this run through and then let’s judge.

Darren Tierney

I will add that it is not just the annual process. It is a dynamic process. To bring that to life a bit, I had a case recently where a senior civil servant had suddenly inherited lots of shares that he didn’t have before. He declared those interests. They were relevant to the job he was doing, so we advised with Permanent Secretaries on how to manage that, including disposing of some of those shares. People find themselves in a situation that they didn’t declare because it was not real and then we manage it in—

Lloyd Russell-Moyle

If your team is involved in that day-to-day role of assessing case by case, what needs to happen?

Darren Tierney

In that instance, and in many instances, the first port of call is the Permanent Secretary. If some advice from us is needed, we give it daily.

Lloyd Russell-Moyle

How often do Permanent Secretaries have to come to seek advice from you?

Darren Tierney

Quite a lot. It varies by Department and issue, but I get quite a lot of incoming from senior colleagues. As I say though, it is because they are trying to find the right way to do something.

Lloyd Russell-Moyle

Are there some Departments that don’t ask your advice?

Darren Tierney

I am pretty confident that in the 15 months I have been in this job I have spoken to every single Permanent Secretary about something.

Lloyd Russell-Moyle

Everyone has come to you on something. Mr Tierney, how are Boardman’s recommendations about pre-appointment restrictions to prevent external hires to the Civil Service from potentially benefiting from their former employers managed at the moment? In the light of the priority given to further openings in the Civil Service to external hires, is the process of managing conflicts of interest robust enough to guarantee propriety in this area?

Darren Tierney

It is a good point and, again, I am very grateful to Nigel Boardman for illuminating that. We have changed the conflicts of interest process to take that into account. When civil servants or direct appointees are making their declaration, there is a bit in the form that explicitly includes relationships with previous employers so that the system can see if there is still a live relationship or something that we need to keep an eye on. For example, if someone leaves one of the big four consultancy firms and joins as a civil servant, we know that that relationship existed, so we will make sure that they are not involved in procurement with that previous employer. That is the sort of thing that Nigel Boardman was worried about, and we built that into the new conflicts of interest process.

Lloyd Russell-Moyle

Who is made aware of that? Is it just the line manager who is made aware of that, or is it other people in the Department who may be made aware of that?

Darren Tierney

It is the line manager in the first instance, although if it is about procurement, for example, they will also notify the commercial teams so that they know there is a potential conflict in the system.

Karin Smyth

Mr Tierney, when we heard from Lord Pickles as ACOBA Chair, he suggested that the Government were dragging their heels with introducing measures enforcing the business appointment rules. Is that a characterisation you recognise?

Darren Tierney

We have been busy working with Lord Pickles and his secretariat on a whole range of policy areas for business appointment rules. We have put advice on all that to Ministers, and they are rightly considering it. Some areas are particularly complicated, but advice is with Ministers.

Karin Smyth

He suggested that he had had support from Ministers, but it was actually the civil servants who were somewhat dragging their feet on the reforms. Do you think that is not fair?

Darren Tierney

Yes.

Karin Smyth

Okay, that is fine. Do you also agree with him that there are non-legislative steps that could be taken to make the appointment rules enforceable?

Darren Tierney

Yes, that is our primary area of focus, if I am honest. Rather than seeking to put the rules into statute, we are looking at different ways in which we can improve the sanctions regime and the operation of the rules without using statute, for example using contracts or employment law.

Karin Smyth

Is that what you will be doing?

Darren Tierney

Those decisions still have not been taken by Ministers, but that is what we are looking at and that is what we are advising them on.

Karin Smyth

That is the Civil Service recommendation and we are waiting for Ministers to confirm agreement to that?

Darren Tierney

It is one of the recommendations that was a mixture of CSPL and Boardman. As I said, there is quite a complicated area—

Karin Smyth

Sorry, but to be clear, that is something that you have taken forward and put forward to Ministers as your recommendations?

Darren Tierney

We have put forward options on how best to do it and they are with Ministers.

Karin Smyth

Any idea when we might see that? When are you expecting a decision, Mr Case?

Simon Case

We have not had a timeline from Ministers. I think that Lord True has recently been in touch with Lord Pickles to provide him with an update. I think that Ministers want to move this forward. They recognise the need to get on with it, but we have not had a timeline from Ministers.

Karin Smyth

Weeks, end of recess or months?

Simon Case

We have not had a timeline from Ministers.

Karin Smyth

It is normally “soon”. Not even soon?

Darren Tierney

In due course—in the fullness of time.

Karin Smyth

Or in due course. No, nothing? A year, a year and a half, two years? What would you expect realistically? I didn’t expect to get an answer on this.

Simon Case

These things are pressing. They have been there—as we say, I think the options are clear and I hope this comes quickly.

Karin Smyth

Quickly being quicker than soon perhaps. Right, we might follow that up. The Committee on Standards in Public Life recommended that the business appointment rules be extended to cover employment where the applicant has had regulatory contracting or policy experience as well as a direct relationship. Mr Case, as head of the Civil Service, do you think that it would be fair to stop officials from making use of their expertise in the private sector to this extent?

Simon Case

I think this comes back to the proportionate approach. We have to stop people making direct personal financial gain from the privileged information that they have gained in government. That should not be happening and I think we would all agree on that. On more general expertise, I worry that if we end up in a world in which once you have joined the Civil Service it is almost impossible for you to get another even vaguely relevant job afterwards, we will find ourselves very quickly with talented people not wanting to join the Civil Service. A proportionate approach is required. People taking up jobs that directly draw on the expertise that they have had is a problem—subject matter expertise—but with broader skills and so on, it feels to me to be imbalanced to rule out people from working in that same sector afterwards.

Karin Smyth

If they had regulatory, contracting or policy. Do you disagree with the committee?

Simon Case

There are lots of things that come under the rubric—lots of different roles. You can work in a regulatory body and not be at the forefront of the interaction with whichever sector you are regulating. A blanket rule that because you have worked in a regulator meant you could not go into something would not feel proportionate.

Karin Smyth

Will there be pushback on those recommendations?

Simon Case

Those are decisions for Ministers to take.

Karin Smyth

Is that the same decision making as the “quickly” or “soon”?

Simon Case

Yes.

John McDonnell

I will come to direct ministerial appointments again, and you have dealt with a bit of this. I want you to explain the process through which these direct ministerial appointments are made, the level of discretion that Ministers have, and then this issue of how conflicts of interest are managed and mitigated. Is there are a provision to just prevent the appointment if the conflicts of interest are significant?

Simon Case

I will get Darren to do the detail. On the conflicts of interest, there are cases where we have turned down direct ministerial appointments. There are some conflicts of interest that would be perceived conflicts of interest rather than actual ones, and you can put in satisfactory mitigation maybe, but where there are actual conflicts of interest we have turned those down. Mr Tierney can do the process.

Darren Tierney

Direct appointments are not new. They have been used for decades. I think what is new is that we have now put in place a standard process for making them that was not in place, and that is a direct result of Nigel Boardman’s work. To set that out briefly, now we have a best practice note that has gone around Whitehall and the Permanent Secretaries now know how to do this. The main features of direct appointments are that there will be terms of reference drafted or a remit for the role will be created. As far as possible, depending on speed, there will be as open and fair a selection process as possible against some criteria for the role. All of them will have to be authorised by a Minister and all of them will be subject to the Nolan principles and to the code of conduct on board members of public bodies that I mentioned. They also then have a standard conflicts of interest process where they will declare their interests. Permanent Secretaries will assess them and then mitigate them if possible.

John McDonnell

Do you have the ability to veto an appointment?

Darren Tierney

It is rarely me who vetoes. It will be Permanent Secretaries usually who will assess the interests, and if there is a conflict that can’t be managed, it is for the Permanent Secretary to say no. If they want to test that with me, based on precedent or if there is any other way of mitigating it, they will, but it is for Permanent Secretaries to do that with their Ministers.

John McDonnell

Is that the process that was used when Boris Johnson was Foreign Secretary and trying to appoint his girlfriend, subsequently his wife, to become his chief of staff?

Darren Tierney

I was not in the Foreign Office then and I was not in this job, and I am afraid I cannot comment.

Simon Case

No knowledge at all of these allegations.

John McDonnell

Have you investigated those allegations?

Simon Case

No, we have not investigated those allegations.

John McDonnell

Why not? Lord Geidt, who you have praised to high heaven today, has said that this is ripe for investigation.

Simon Case

Has he said that? I have not seen it.

John McDonnell

He has.

Simon Case

I have not seen a direct quote on that.

John McDonnell

The direct quote is in inverted commas in The Times, so it must be true, “Could be ripe for investigation”.

Simon Case

I am not sure there was a direct quote.

John McDonnell

It is certainly in inverted commas here. Shall I read it to you? “Lord Geidt believes allegations that Boris Johnson tried to appoint his future wife to a leading government job ‘could be ripe for investigation’ The Telegraph can reveal”. Sorry, I apologise to The Times.

Simon Case

I am not sure that that necessarily is a direct quote from Lord Geidt.

John McDonnell

It is certainly in inverted commas. Whether it was a direct quote or not—

Simon Case

It is a matter of public—

John McDonnell

Is this not sufficient for you to—does it not warrant an investigation?

Simon Case

This is where we get into the processes that exist. An investigation under the Ministerial Code under the current rubric can only be authorised by the Prime Minister.

Chair

Is he not keen?

Simon Case

These are questions that need to be directed to the Prime Minister.

Chair

Sorry to interrupt.

John McDonnell

I just want this for the record really. You are the Cabinet Secretary. Here is a potential flagrant abuse of power, and you are resting on the argument that you are not permitted by the Ministerial Code, by the Prime Minister, to investigate this matter?

Simon Case

I do not have an independent right of initiation of investigations.

John McDonnell

Have you discussed this matter with the Prime Minister—suggesting that this is something for you to investigate, at least the facts of it?

Simon Case

I am not going to go into the conversations that I have with the Prime Minister.

John McDonnell

Do you not have any responsibility, as one of the most senior civil servants in government, to uphold standards at all?

Simon Case

I am very aware of my responsibilities under the Civil Service Code and I take them very seriously.

John McDonnell

Yet here we have the potential breach of basic standards by someone in high office and a former ethics adviser advised that this is ripe for investigation, but you have not even raised it with the Prime Minister?

Simon Case

That is not what I said. I said that I am not commenting on my private conversations with the Prime Minister. I have also told you that I take my responsibilities very seriously. I have throughout my career and I continue to do that.

John McDonnell

I am interpreting that as that you have had a conversation with the Prime Minister.

Simon Case

I am not going to get into confirming or denying conversations with the Prime Minister about anything. It is absolutely vital to maintain the trust that needs to exist not just between the Prime Minister and me, but between the Civil Service and Ministers that conversations we have remain private.

John McDonnell

You can understand, though, can you not—

Simon Case

I absolutely accept the point that you are making.

John McDonnell

Let me finish the sentence. You can understand that there is some contradiction between the statement that you are making about you upholding in the fullest manner the standards of the Civil Service, and yet not having a conversation with the Prime Minister about this matter. I think that that would be generally interpreted as something of a contradiction and therefore I am interpreting that you have had that conversation.

Simon Case

I refer back to the conversations that I had at the opening. There are juxtapositions and there are challenges that we have to manage. I say again that I take my responsibilities very seriously for upholding the Civil Service Code. I am not going to go into the private conversations that I have had with the Prime Minister.

John McDonnell

We all have a cross to bear. Let’s just go into more detail. Are there any restrictions on the use or the types of work that direct appointments can undertake?

Darren Tierney

Yes. They are not executive; they are advisory. They cannot direct the work of the Civil Service, for example. They will mostly just be in advisory or championing-type roles. The remit will be set out in their terms of reference.

John McDonnell

Have you a set of parameters between what you would expect to see by a civil servant as against a ministerial appointment?

Darren Tierney

Yes, it would be quite clear what civil servants can do. They can spend money within their delegation, they can run their organisations. Direct appointees are almost certainly advisory and will not be able to do that.

John McDonnell

A final point. The former Commissioner for Public Appointments, Sir Peter Riddell, told us that he thought that Departments should be required to publish a list of all unregulated ministerial appointments. Can you see any reason why this could not or should not be implemented?

Simon Case

We have completed the survey. Obviously it is a decision for Ministers about the decisions being transparent, but it would seem like a very obvious thing to do, yes.

John McDonnell

That will be subsequently published?

Simon Case

It is very difficult to see why that would not be done.

John McDonnell

That would be helpful, thanks.

Chair

A brief change of subject before we go to Beth Winter. Something that has been brought to my attention—and I ask in that spirit, Mr Tierney—is about whether Ministers or No. 10 have ever sought advice, recently or whenever, from the propriety and ethics team on whether Ministers should declare loans or donations to one another?