Alexander “Lex” Greensill, formerly of Morgan Stanley, is clearly a forceful and persuasive personality. The Autralian farmer-turned-financier was adviser to the government from 2012 to 2015, during which time, he appears to have convinced ministers to encourage companies to take up supply chain finance initiatives of the kind his own company provided.
David Cameron, who was UK prime minister at the time, recently confirmed in a statement that he had ensured the government would “play its part” in such an initiative through the community pharmacy scheme. This, he says, “has successfully reduced costs to the NHS and enabled many thousands of pharmacies to access early payments and low cost credit”.
Cameron then went to work for Greensill two years later, when he no longer needed to ask approval from the relevant advisory committee – which only polices a former minister’s activities for two years after they leave office. In doing so, he avoided the reach of the lobbying monitoring system that he himself had promoted when he was prime minister because he was an employee of the company and not an outsider lobbying on their behalf. Cameron had not broken any rules, even though the door between public and private sector was not just revolving but spinning on its hinges.
The advisory mouse
This all throws light on the important question of how to regulate ministers and civil servants after they leave office. It is often hard to show conclusively that an individual who goes to work for a new employer is behaving improperly in that new role. In the private sector, this is usually approached by a ban on abuse of confidential information or a covenant restricting certain sorts of activity.
In the public sector there is a flimsy structure known as the Advisory Committee on Business Appointments (ACOBA). The clue is in the adjective “Advisory”. ACOBA has no legal teeth and is often ignored. Some ex-ministers do not even tell this body if they take a job. Sometimes it is a mouse which roars, but more often it is just a mouse.
The danger to be guarded against in the public sector is, of course, that improper advantage may be given to companies, groups or thinktanks because a minister or civil servant is seeking a berth there after his or her tenure in the public service ends. That minister or public servant would then be in a position to use the knowledge gained in their public service in the interests of the organisation. And that organisation would be getting privileged access to information it would not otherwise have had.
Many civil servants are involved in regulating businesses, and these businesses may want them to open doors after they leave public service. This was less of an issue when a civil service job was expected to last a lifetime. Now there is more of a revolving door between the public and private sectors, and this issue (of an “afterlife”) has become more acute earlier on in people’s careers.
The most difficult issue is how can you retrospectively judge whether a minister or civil servant has shown favouritism to a company on the expectation (merited or otherwise) of a future relationship. Indeed, Cameron said in a statement that “the idea of my working for Greensill was never raised, or considered by me, until well after I left office”.
ACOBA started life in 1975 and was originally called the Advisory Committee on Civil Service Appointments. The body provided guidance for permanent and deputy permanent secretaries before its remit was gradually extended to include diplomats and military personnel. There was a name change in 1995 to the present rather unwieldy title, and at that point, ministers were added to the restrictions.
The Business Appointment Rules for Civil Servants were revised by the government and published in February 2011. Departments themselves are required to administer their own rules at lower levels.
There is a justified lack of confidence in present arrangements. In an unusual move, the ACOBA’s own secretariat said in response to a freedom of information request in 2018 that the body “has no enforcement power and therefore depends upon voluntary cooperation from applicants”. It was also branded “toothless” in April 2017 by the Public Administration and Constitutional Affairs Select Committee..
ACOBA does not have any power to veto an appointment, it merely advises people on whether there would be inpropriety in taking certain positions. The strongest sanction available to ACOBA is to recommend a delay before an appointment may be taken up. And, crucially, its writ runs out two years after a public servant leaves office. The committee has no real power to monitor or enforce the recommendations it makes and has no jurisdiction once the two years have passed.
The defect in this edifice is the apparent freedom of ministers to ignore the advice or not even to ask for it. In the private sector, if an employee does not stand by their restrictive covenant or confidential information clause, the employer will go to court to enforce the restraint.
The committee at least needs to be put on a statutory basis and needs an injunction power. A five-year moratorium on lobbying, as suggested by Cameron’s predecessor as UK prime minister, Gordon Brown, is attractive.
A very limited review has been set up to look into the Greensill affair, but it will take place behind closed doors and be conducted by a non-executive director at the Department for Business, Energy & Industrial Strategy. Do not expect any radical solutions from this review. Its terms of reference prevent this even if those involved wanted to offer them. The system needs a serious external inquiry and repair.