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One direction: first accounting officer ministerial direction published since 2010

Is it a crisis of civil service confidence in ministers?

The Secretary of State for Transport has formally instructed his Permanent Secretary to act in a way that, under Treasury rules, offers poor value for money. Is it a crisis of civil service confidence in ministers? Or is it evidence of fractious relations at the top of Whitehall? The answer to both questions is probably not, but but until the system is made more transparent it’s hard to be sure.

As the Institute found in our research, most ‘ministerial directions’ are given for entirely legitimate reasons. They are mechanisms for making accountability clearer in the ambiguity of government. Each permanent secretary is the accounting officer for their department, directly accountable to Parliament for public spending. As accounting officer, a permanent secretary can object formally to a ministerial decision to spend money if it does not meet the Treasury criteria of regularity, propriety, value for money, and feasibility. If a spending decision breaches any of these criteria, the accounting officer has a duty to ask for a written direction to continue from the secretary of state. The accounting officer then implements the decision – but the minister bears responsibility for it. While regularity and propriety relate to spending within parliamentary authorisation, the newer criteria of value for money (introduced in the 1990s) and feasibility (introduced in 2011) concern the effectiveness of spending. Most directions given since 1990 have been for value for money.

Institute for Government analysis of data from the Treasury and parliamentary questions for Following the Pound (Sept 2013) and GOV.UK announcement, Feb 2015

In the case today, the accounting officer objections are that the secretary of state’s requirements for the Northern and TransPennine Express franchises go beyond what is necessary, and therefore might cost more than a pure ‘value for money’ franchise. But as the secretary of state writes, “I believe there are wider issues to consider which I accept fall outside the remit of the Accounting Officer but that I consider material.” He sets out that continuing to use “uncomfortable and low quality” trains “is incompatible with our vision for economic growth and prosperity in the north” – so, instead, he is putting requirements on potential franchisees to invest in 120 new vehicles. Since you could still cram paying passengers onto old uncomfortable trains, this requirement doesn’t offer strict ‘value for money’. Public finance rules don’t take personal comfort of commuters into account. This is a political judgment – and entirely proper for a minister to make. As Francis Maude put it in a 2013 speech, “any minister should be confident enough in the judgment he or she has made to be willing to justify it in public”. In a democracy, it is ministers’ legitimate role to balance wider concerns and to be free to overrule advice they are given by unelected officials. But when they do so, it’s also important that this is done so transparently so that the right person can be held to account – by Parliament, and by the public. The direction being published the day after it was formally issued is a welcome surprise. It’s the only one issued since 2010 that we know about. Before 2011, directions could remain secret for years. But the rules were changed to require the existence of a direction (though not the direction itself) to be published no later than the department’s next annual accounts – though they must tell the Treasury and the Comptroller & Auditor General (who tells the Public Accounts Committee) sooner. Other permanent secretaries may currently be sitting on as-yet unpublished directions issued in recent months. Perhaps publishing the direction immediately is simply a welcome case of open government at the Department for Transport (DfT). But it appears they are in fact operating under the rules set out in the Cabinet Manual for purdah – the period between parliament’s dissolution and the general election. These explain that “during any period when Parliament is prorogued or dissolved … the direction, together with the reasoning provided by the accounting officer, should be made public immediately by the department”. Timely publication of directions would be welcome as a matter of course as part of open and accountable government. But this direction published today suggests the DfT at least has decided to operate as if we have already entered the final straight before the election. The only question now is, how many more will there be before May? It’s often said that there is always a rush of directions issued in the run-up to an election – but the data doesn’t bear this out. The only significant pre-election spike was in 2009/10 when a combination of an expected change of government, and a rush of fiscal stimulus measures and bank bailouts with unclear value for money or which broke normal rules, led to fourteen directions in two years.

Institute for Government analysis of data from the Treasury and parliamentary questions for Following the Pound (Sept 2013) and GOV.UK announcement, Feb 2015

Will we see a similar rush between now and May? Much will depend on whether ministers decide to push poor value-for-money spending commitments through before they depart for the campaign trail. If other departments acted like the DfT, publishing the direction immediately on a routine basis – not just during purdah – then the public would be alerted to such behaviour as it occurred. And this could only strengthen government’s accountability. The question should not be why the DfT has published this direction immediately – but whether other departments will follow their example.

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