OGN Papers 19th September 2016

OGN submission: Role of ACoBA and Independent Adviser on Ministers’ Interests

This response was submitted on 16th September 2016 on behalf of the Open Government Network to the Public Administration and Constitutional Affairs Committee’s inquiry on the role and effectiveness of ACoBA and Independent Adviser on Ministers’ Interests.

Introduction

OGN welcomes the Public Administration and Constitutional Affairs Committee (PACAC) inquiry on the role of the Advisory Committee on Business Appointments (ACoBA) and the Independent Adviser on Ministers’ Interests.

We see this inquiry as an important opportunity to build on the findings of the Public Administration Select Committee (PASC)’s 2012 report into the Business Appointment Rules and make further recommendations to ensure the effective regulation of potential conflicts of interests and ensure greater openness in government decision-making.

The movement of employees between government and the private sector is an increasingly widespread phenomenon. Research by the High Pay Centre has revealed that between 2000 and 2014, 600 former ministers and top level civil servants were appointed to over 1,000 different business roles. Appointments to civil service positions from the private sector have also risen in recent years. In 2013/14 30% of senior civil servants had been appointed from the private sector.

We recognise there are benefits from people moving between government and other areas of work. Candidates from outside government can bring technical expertise and experience that is valuable to policymakers. There is evidence that the public is wary of elected officials treating politics as their sole career and so we should be careful about reducing the likelihood of people entering politics from other fields. After their time in office, public officials can also benefit new employers by providing insight into the functions of government.

However, the revolving door phenomenon also carries potential threats to the openness and transparency of decision-making. Individuals entering public office from the private sector may be more sympathetic to their previous employer or industry and continue to represent their interests to government. Those leaving office take with them insider information, networks of influence and access to decision-makers that could be used to advantage their new employer. Transparency International UK has identified five potential types of conflict that might arise as a result of the revolving door:

  • Abuse of Office –  A senior official might use his or her power while in office to shape a policy or decision in favour of a certain company, with a view to ingratiating himself or herself with that company and thus opening up a path to future employment.
  • Undue influence – A former official now employed by a company might influence his or her former associates to make a decision in a way that favours the company.
  • Profiteering – An individual might financially profit from public office by drawing on knowledge or stature derived from his or her public role.
  • Switching sides – An individual with access to classified information might leave public office to take up employment with a private-sector organisation in a role that requires him or her to oppose the government’s position on an issue where he or she had previously represented the government.  
  • Regulatory capture – Government officials may become overly sympathetic to sectors and industries they have a responsibility to regulate.

Private sector influence within government can distort government policy to favour private interests over public ones, and damage public confidence in government. Public trust depends significantly on the extent to which government is seen to be acting in the public interest. Some appointments may have the appearance of impropriety to the public even if there is no evidence that a position of influence has been abused. A survey carried out for Transparency International UK in 2010 revealed the revolving door as a close second in the public’s ranking of potentially corrupt activities.

Essential to managing the risks and ensuring public trust in government is an effective regulatory system that acts, and is seen to act, in a consistent, fair and accountable manner.

The role of ACoBA

The Advisory Committee on Business Appointments (ACoBA) is currently ill-equipped to deal with some of the challenges of the revolving door and to ensure public trust in government. We have identified four principal areas of concern, which we address below: 1) the committee’s reliance on self-regulation, 2) its limited reach, 3) the extent to which it is independent of the interests it regulates, and 4) the degree of transparency it operates with.

Self-regulation

Question: In its 2012 report PASC recommended that ACoBA be “abolished”. How effective is ACoBA as an “advisory” body, and should its remit be extended to allow the Committee to enforce compliance with its advice?

The ability of the ACoBA to effectively identify and manage potential conflicts of interest is limited by its advisory nature and reliance on self-regulation. A number of high-profile controversies suggest that self-regulation is not working (see for instance examples highlighted by Transparency International in 2012 and the High Pay Centre in 2015).

We support the PASC recommendation that the ACoBA should be replaced with a new statutory body whose rulings are mandatory and enforceable. More rigorous regulation of the conduct of public officials would echo a growing international trend of practice. Such a move would also be in line with OECD best practice guidelines for managing conflicts of interest in the public sector, which recommends monitoring post-employment behaviour and imposing sanctions for non-compliance.

Limited reach

The effectiveness of the ACoBA in preventing conflicts of interests is also limited by its narrow reach. Only Ministers and the most senior civil servants have their appointments considered by ACoBA, representing only a small proportion of appointments of former public officials that could raise issues. For example, in 2011-12, 637 people left the senior civil service but only 31 were reported on by ACoBA.

Changes made to the Code of Conduct for Special Advisors in 2015 indicate that the reach of ACoBA has been further restricted. Where previously all Special Advisors were required to submit an application to ACoBA regarding a new appointment or employment opportunity they wish to take up after leaving the Civil Service, the updated code limits this responsibility to those Special Advisors equivalent to Director General level and above.

In cases where public officials are subject to the Business Appointment Rules but do not have their applications considered by ACoBA, the responsibility for monitoring compliance with the rules falls to the relevant Departmental Permanent Secretary. This closed form of scrutiny does not provide opportunities for external oversight and so does little to address issues of public confidence.

The committee is also limited by its focus on commercial appointments. Currently public officials taking up unpaid positions at non-commercial institutions would not be scrutinised by the committee, regardless of whether such appointments raise potential conflicts of interest.

Independence of committee

Question: In its 2012 report, PASC recommended that “the membership of ACoBA be reconsidered entirely, to ensure that it is able to command public trust and confidence in its decisions.” Is ACoBA’s membership sufficiently reflective of our society?

To provide effective oversight it is important for members of the ACoBA to be, and be seen to be, impartial and independent from the interests that the committee regulates. It is therefore a concern that membership of the committee is currently made up of three senior Parliamentarians and five independent members who must have experience at a high level in the Civil Service, the Diplomatic Service, the Armed Forces or in Business. This exclusive membership by those in high public office does not give the perception, or reality, of sufficient distance from these interests.

We support the recommendation of the PASC that membership of ACoBA should be reconsidered to ensure that it is able to command public trust and confidence in its decisions. The ACoBA should be open to, and include members from, the wider body of citizens who have the necessary abilities for this role, such as civil society representatives. We recognise that whether committee members are drawn from civil society or the civil service, conflicts of interests may still arise regarding their past and future employment. We recommend that additional safeguards are implemented to regulate these risks and ensure the independence of committee members.

Transparency

Another issue affecting public confidence that needs to be addressed is the degree of transparency and openness in the ACoBA’s operations. Currently the data published by the committee is limited and insufficient to allow proper public or media scrutiny of the committee’s proceedings. The committee only publishes its recommendations in senior cases where an appointment has actually been taken up and it does not include information on how it conducts its inquiries or the reasons for reaching its decisions.

We contend that full transparency over the committee’s activities and recommendations is essential in order to hold the regulatory body to account and to secure public trust in its decisions. This should include information regarding the committee’s proceedings, recommendations and reasoning in all cases being made available online in an open format.

The Business Appointment Rules

Question: In 2012 PASC concluded that the Rules are not “clear about the principles and considerations which should guide the advisory committee’s decision.” How effective are the Business Appointment Rules – for example is there sufficient clarity with regard to the definition of lobbying?

The Business Appointment Rules are not explicit in identifying when an application may be rejected or deemed acceptable by the ACoBA. We appreciate the Rules need to be sufficiently flexible to enable the committee to make assessments of risk based on the individual circumstances before them. However, a lack of clarity about the principles and considerations that should guide decision-making can lead to inconsistencies in assessing applications and create confusion for those subject to the Rules. Increased clarity around decision-making guidelines is also necessary to allow the press, public and wider civil society to engage with and scrutinise the Committee’s decisions.

For the Business Appointment Rules to be effective they must also reflect the reality of how knowledge and influence is used outside of government. For instance, with regard to lobbying, the Rules currently suggest that the former public official is only lobbying if they are engaging in lobbying activities themselves. However, former ministers or public servants may not be directly lobbying but employed by lobbying organisations for their detailed knowledge and networks.

The Independent Adviser on Ministers’ Interests

Question: In its 2012 report, PASC repeated its call for the post holder to be “subject to a pre-appointment hearing by a parliamentary select committee.” How can public confidence be maintained with regard to the “independence” of the Adviser on Ministers’ Interests?

In order for the Independent Adviser on Ministers’ Interests to represent a credible regulatory force in the public’s eyes, the role must be, and be seen to be, independent of government and commercial interests. Essential to this is ensuring that the Adviser is recruited from a pool of candidates in an open and transparent process.

Question: Should the Adviser role be accountable to Parliament or the Prime Minister?

We believe that the independence of the Adviser would be best served by the role being accountable to Parliament.

Conclusion

We are concerned that the current system for regulating propriety in public life is insufficient to protect against the risks associated with the “revolving door”:

  1. We consider that the effectiveness of the ACoBA in managing conflicts of interests and preventing impropriety of former public officials would be improved by replacing the Committee with a more robust statutory body, with powers to investigate apparent breaches of the Code and enforce compliance with its decisions.
  2. We are concerned that the ACoBA is limited in the number of applications that it currently reviews and its reach should be extended to cover all appointments of former public officials where potentially significant conflict of interests arise.
  3. We consider that public trust in the independence of the regulatory system would be best served by additional measures being taken to guarantee the independence of the Committee, Independent Adviser on Ministerial Interests or other regulatory bodies from government and conflicting interests.
  4. We consider that measures should be taken to improve the transparency and openness of the regulatory system in order to enable public oversight and scrutiny of its work.

This response has been prepared by the OGN’s coordinators, Involve, on its behalf.

Read the full response with references below

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