19 March 2012

The Margaret Hodge question is not going away. It is time to separate the criticism at the top of Whitehall of her chairing of the Public Accounts Committee (PAC) from the issues she has raised about civil service accountability.

Permanent secretaries cannot just privately seethe over Mrs Hodge’s more aggressive style at the PAC, and, in particular, the decision to require the HMRC’s lawyer to swear an oath -which prompted a strong exchange of letters with Gus O’Donnell just before his retirement. The new civil service leadership has sought to cool the temperature, while many at Westminster also believe that the ‘oath’ decision was wrong and accept that select committees need to avoid bullying officials who cannot defend themselves. But a big gap exists between Whitehall and Westminster.

The basic question remains: to whom are civil servants accountable? The traditional doctrine, as set out by Lord O’Donnell is his letter, is that ‘ to maintain impartiality, it is essential that civil servants remain accountable to ministers, who are in turn accountable to Parliament’. There is one major exception: accounting officers, in general permanent secretaries, are directly accountable to Parliament, and specifically the Public Accounts Committee, for the handling of taxpayers’ money.

Mrs Hodge questioned this view in a speech to Policy Exchange last week. In her view, the old doctrine of accountability is not fit for the 21st century since it lets both ministers and civil servants off the hook. ‘Politicians resent having to accept responsibility for mistakes made by civil servants and civil servants resent being blamed without being able to clear their names’. And there is the further twist in an age of payment by results and performance management, that ‘ministers are prevented from themselves appointing, promoting or sacking the senior civil servants for whom they are said to be accountable, on the grounds that this would politicise the civil service’.

At a meeting of the Liaison Committee, consisting of select committee chairs, on March 6th, Mrs Hodge and Bernard Jenkin from the Public Accounts Committee questioned David Cameron’s defence of the traditional doctrine and his preference for local accountability to users of schools and health services, what he called individual and democratic accountability over bureaucratic accountability.

The PAC has already challenged the convention that accountability is exercised through the post, not the person, by seeking evidence from past permanent secretaries over the problems of the Rural Payments Agency. According to Mrs Hodge, ‘officials who are responsible should remain accountable even if they change jobs’. At an Institute for Government event last year, Jack Straw argued that in some areas of work, such as large-scale procurement and IT schemes, ministers had no real control over decisions. Consequently, permanent secretaries should appear as principals, as they do before the PAC, rather than as agents of the secretary of state, as they otherwise do before select committees.

It is unclear how the new system would work. What limits would be placed on what civil servants could be asked? How would the need for confidentiality, and a private space, over the provision of policy advice to ministers be preserved? This issue has also been raised in the controversy over the publication of the risk register on the Health and Social Care Bill, as Lord Wilson of Dinton has argued in the Daily Telegraph.

Making civil servants more personally accountable raises major constitutional questions. But they cannot be dodged. Whitehall will have to come to terms with a more assertive Parliament following the election of the chairs of select committees. Similarly, there will continue to be demands for more transparency. We urgently need a new understanding on accountability to replace the 32 year old Osmotherly rules on appearing before select committees (internal Whitehall rules with no parliamentary status).

The Liaison Committee is already looking at civil service evidence, while the Constitution Committee of the Lords has decided to hold an inquiry into the constitutional status of civil servants. The Institute for Government will shortly be launching a wide-ranging study into ministerial and civil service accountability.

This debate presents both a challenge, and an opportunity, for Sir Jeremy Heywood and Sir Bob Kerslake. They cannot just defend the status quo. They need to offer their own proposals for strengthening civil service accountability, both to ministers and to Parliament.

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