MP accuses O’Donnell of being ‘shop steward for aggrieved permanent secretaries’
“He berated me for the way in which the committee was seeking to hold the executive to account”
– Margaret Hodge, chairwoman, public accounts committee
Whitehall mandarins are trying to dismantle a parliamentary watchdog whose attempts to make civil servants accountable have provoked fury, a senior MP claims today.
Margaret Hodge is due to deliver a provocative speech at lunchtime at the Policy Exchange, a centre-right think-tank, saying that the House of Commons public accounts committee (PAC) that she chairs has been “rattling the cage” of Britain’s most powerful civil servants – including permanent secretaries, who head government departments.
According to an advance copy of her speech, the Labour MP dubs the former cabinet secretary, Sir Gus (now Lord) O’Donnell, a “shop steward for aggrieved permanent secretaries”.
She will say: “Some have upped the ante, even asserting that the PAC’s activism affronts some constitutional principle (of which the civil servants consider themselves custodians). Anonymous briefings suggest that some would even like to dismantle the committee itself.”
She will stress: “And from anonymous briefings, it appears that the civil service response may be to attempt to abolish us.”
Exaro revealed last Friday how Whitehall had declared war on MPs over Parliament’s grilling of civil servants in an attempt to hold them to account.
O’Donnell, in his final days as the UK’s most senior civil servant, wrote to Hodge to say that civil servants should not be accountable to Parliament, only to ministers.
Yesterday, Exaro revealed the full correspondence in which O’Donnell bitterly complained about Hodge’s committee.
Hodge’s reply robustly rejected this.
The row was triggered by the committee’s scrutiny of the decision by HM Revenue & Customs (HMRC) to excuse Goldman Sachs, the investment bank, from paying up to £10 million in tax. Its questioning of Anthony Inglese, HMRC general counsel, which included forcing him to swear an oath and disclose his legal advice on the tax deal, outraged civil servants.
Hodge, however, asserts that the cross-party committee of MPs is crucial to ensuring proper scrutiny of public spending. She says that changes must be made to the traditional relationship between Parliament and the civil service “to ensure proper accountability”.
The convention is that civil servants are impartial and generally accountable only to ministers, who answer to Parliament.
But Hodge says: “The old doctrine of accountability is not fit for the 21st century. We live in an age of payment by results and performance management, yet ministers are prevented from themselves appointing, promoting or sacking the senior civil servants who are said to be accountable, on the grounds that this would politicise the civil service.
“You begin to wonder whether the whole doctrine of ministerial accountability is not constructed on a lie. How can anybody be held accountable for the actions of people they cannot hire or fire?
“So, civil servants escape external accountability because they are protected by the convention of ministerial responsibility, and they escape internal accountability because ministers are powerless to hold them to account in any meaningful way.
“Of course, it is uncomfortable when we unearth gaping holes in the governance and accountability of HMRC. Of course, government and the civil service will get cross if we identify huge potential cost overruns on aircraft carriers.”
“But for ministers to respond by asserting that we are straying beyond our remit is, frankly, pathetic. And for civil servants to hide behind their ministers will simply not do.”
Without change, she says, “more taxpayers’ money will be wasted; public services will continue to provide poor value; while transparency and accountability will become a charade.
“I have no doubt that if individual officials responsible for our defence-procurement contracts were held openly to account for how they delivered, we would not be wasting literally billions on ill-defined projects, increased costs because of changed specifications, and extra costs arising from deliberate delays and poorly-negotiated contracts.
“The same is true of the stream of IT contracts, the post-code lottery on delivering value-for-money in health services, or the loss because of fraud and error in many public services.”
She also calls for the Freedom of Information Act to be extended to cover companies and organisations that deliver public services.
The civil service responded to the Goldman Sachs episode, she says, through a letter that O’Donnell sent Hodge “on behalf of all the permanent secretaries”.
“It was as if he had taken on the role of shop steward for aggrieved permanent secretaries,” she says. “He berated me for the way in which the committee was seeking to hold the executive to account.”
She recalls from her own time as a minister that power in government was always with the civil servants rather than the “more transient politicians”.