In a typically understated but rigorous way, Amyas Morse’s watchdogs at the National Audit Office (NAO) have driven a coach and horses through several of the era’s public management nostrums around contracting, co-production and exchanges between the public and private sectors.
Pepped up, perhaps, by its own findings that governors and heads of academy schools have been letting contracts to friends and family, or by the recent appearance at the Commons public accounts committee by Chris Wormald, permanent secretary at the Department for Education, who, despite being one of Whitehall’s brightest, could not or would not make it clear where responsibility for children’s local services now belongs, the NAO’s report on conflicts of interest says that public money is in danger of falling between the cracks.
The problem has got worse. The coalition government has deliberately built conflicts of interest into how schools are run, into primary care and into local enterprise partnerships (LEPs). The same doctors who sit as commissioners provide care. GPs aren’t saints. Thanking Andrew Lansley and David Cameron for their generosity with NHS funds, they effectively take the money and run.
In LEPs, the business people who form their boards are giving grants to… local business people. The financing of the LEPs is particularly opaque because the government decreed that they would not be like the regional development agencies they were meant to replace and their administrative back-up is thin.
LEPs offer an example of a generic problem. The cheaper and less cumbersome the process around public money, the less accountability and the more opportunities for graft and corruption.
Once the boundary between commissioner and contractor is crossed, dangers arise. Yet the boundary has to be crossed and recrossed if commissioning is to be sensible. Strictly speaking, commissioners should not speak to a potential provider to avoid any suspicion of collusion – which used to be the Cabinet Office rule. But not all contracts are well specified in advance. A better contract could emerge from commissioner-contractor conversations.
Taken literally, a strong conflict of interest rule would bar KPMG, PricewaterhouseCoopers and other audit firms from government work. They advise policymakers and commissioners in government, but they also advise and audit the firms offering public services on contract. They claim the existence of Chinese walls; they ought to be built from bricks and mortar.
In health, the talk now is all about integration and how better to align primary care, hospitals, mental and community care. The pointers are towards a single authority assessing need and organising provision. How to avoid conflict of interest? Answer: abandon commissioning and contracting and reinstitute a single public service entity.
(I can’t avoid adding that there used to be a perfectly adapted instrument for keeping tabs on how money is spent locally, the Audit Commission. RIP.) The idea of a single authority is not on the front burner; it’s not ideologically acceptable to the coalition government.
Instead, the NAO talks about reaffirming principles. But it is culture that underpins principles – and by coincidence that was one of the main points of the valedictory address given at the Institute for Government by Lord John Browne, the departing lead non-executive director in Whitehall.
Unexpectedly, this private sector panjandrum launched into a paean of praise for the public service ethos. The civil service, he argued, needs to be more unified, on the back of a common culture. To break down silos individual officials need a stronger sense of belonging to a bigger whole, with norms and expectations spanning all departments and agencies.
Browne is right, though he might have regretted the cavalier way in which the coalition has weakened a common civil service identity, notably by abolishing what remained of common training and development for civil servants in the National School of Government.
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