Greensill scandal: Crackdown on mandarins' second jobs

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Lucy Fisher
·7 min read
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Simon Case, the Cabinet Secretary, wrote to the heads of all Government departments on Wednesday
Simon Case, the Cabinet Secretary, wrote to the heads of all Government departments on Wednesday

Britain's most senior mandarin has warned that Whitehall officials with second jobs threaten the "integrity and impartiality" of the civil service as he launched a hunt for new conflicts of interest.

Simon Case, the Cabinet Secretary, laid bare his "acute concern" in a letter to the heads of all Government departments on Wednesday.

He ordered them to search their ranks for high-level civil servants with external paid roles that may be problematic, setting the end of this week as the deadline.

It came amid a growing row over Greensill Capital, the lender that collapsed last month, and the access its founder enjoyed to the heart of government during David Cameron's administration.

Mr Cameron then joined the finance firm after leaving office and directly lobbied the Chancellor on its behalf.

David Cameron joined the finance firm Greensill after leaving office - David Levenson/Getty Images Europe
David Cameron joined the finance firm Greensill after leaving office - David Levenson/Getty Images Europe

The revelation that Bill Crothers, a former head of Whitehall procurement, became an adviser to Greensill while still working in the civil service has sparked criticism and fuelled fears that other mandarins may have paid external roles that could present a conflict of interest.

Now The Telegraph has discovered that Sir John Manzoni, the civil service chief understood to have been responsible for signing off on Mr Crothers' position at Greensill, had also held a secondary private sector role while in the civil service.

The Telegraph can reveal that a third senior civil servant, Stephen Kelly, held roles in three private companies at the same time as a position within government. The private sector roles had been approved.

It can also be disclosed that the former Metropolitan Police Commissioner Lord Hogan-Howe was a paid adviser to Greensill at the same time as working at the heart of Whitehall.

On Wednesday, Boris Johnson admitted that it was not clear whether the "boundaries" between Whitehall and business have been "properly understood" and said he shared "widespread concern" about recent revelations.

The Prime Minister stressed, however, that it was a "good idea in principle that top civil servants should be able to engage with business and should have experience of the private sector".

On Wednesday night, the issue around outside interests spread to Mr Johnson's team in Downing Street. ITV reported that Baroness Finn, his deputy chief of staff, has retained her shareholding of between 25 and 50 per cent in Francis Maude Associates, a consultancy that advises governments.

A government spokesman said: "Baroness Finn has declared all her relevant interests to the House of Lords, and in addition complied with the Cabinet Office requirements for special advisers to declare outside interests. The Cabinet Office has a formal process to avoid conflicts of interest arising from such declared interests."

It emerged on Wednesday night that after the Saudi Crown Prince complained to the Prime Minister that the Premier League had "blocked" a £300 million bid to buy Newcastle United, Mr Johnson instructed his aide Lord Eddie Lister to "investigate the complaint". The Saudis withdrew from the deal last summer.

Meanwhile, a second investigation was launched into the Greensill controversy following Downing Street's announcement of an independent lawyer-led probe on Monday.

MPs on the Treasury Committee said they would also investigate after Tory MPs voted down a Labour motion for a parliamentary investigation into the controversy and wider concerns about lobbying.

Mr Cameron's spokesman said he would "respond positively" to any request to give evidence to MPs "when the terms of reference of each inquiry are clear and any invitations to provide evidence are received".

MPs on the Treasury select committee said Rishi Sunak, who was lobbied directly by Mr Cameron, is likely to be called to give evidence.

On Wednesday, Mr Case warned that there must be "transparency and full and proper management of any outside interests" among senior civil servants, and stressed that conflicts of interest are "not permitted".

He said any instances identified must be flagged "immediately" to him and Darren Tierney, the Cabinet Office propriety and ethics chief.

David Cameron-Greensill lobbying scandal explained
David Cameron-Greensill lobbying scandal explained

While he acknowledged the importance of bringing outside expertise into Whitehall and offering mandarins the chance to develop skills outside government, he warned: "This must only be done in a way which can maintain the integrity and impartiality of the Civil Service."

On Wednesday night, Sir Alistair Graham, a former chairman of the Committee on Standards in Public Life, called for a public register of senior civil servants' external interests.

He said dual private sector jobs should be banned for mandarins, but additional roles that are "in the public interest or aid personal development" should be made transparent in a new register.

Separately, a senior adviser to Mr Cameron in Downing Street encouraged a body representing small businesses to promote the "supply chain finance guru" Lex Greensill to its members.

Sir Keir Starmer, the Labour leader, said an "overhaul of the whole broken system" was needed and claimed the Greensill scandal was "just the tip of the iceberg".

He added: "Dodgy contracts, privileged access, jobs for their mates – this is the return of Tory sleaze."

Sir Keir Starmer, the Labour leader, said the Greensill scandal was 'just the tip of the iceberg'
Sir Keir Starmer, the Labour leader, said the Greensill scandal was 'just the tip of the iceberg'

It has emerged that Sir John, who was previously chief executive of the Civil Service and Cabinet Office permanent secretary, also had a private sector role as a non-executive director at the major drinks company SABMiller, which overlapped with a tenure in government that started in October 2014.

However, the Cabinet Office switched tack three times over the matter, first ruling that he could keep his £100,000-a-year role because there was no conflict of interest, then deciding he could only perform the job unpaid before finally saying it would come to an end in the summer of 2015, according to reports at the time.

Meanwhile, in another example of individuals holding dual roles both inside and outside government, Mr Kelly joined the Government as adviser to the commercial management board from the private sector in September 2010. He then took on a salaried Civil Service role as chief operating officer of the UK Government in September 2012 and was also head of the Efficiency Reform Group, which was part of the Cabinet Office.

He left to become the CEO of FTSE 100 software company Sage in November 2014. Between December 2010 and November 2012 he was director of three tech companies – Opsview Ltd, Cloudapp Ltd and Fairsail Ltd – Companies House records show.

Mr Kelly said on Wednesday night that he was not remunerated for any of the roles, which were related to "personal angel investments", where an investor provides money to a start-up.

Profiles Greensill scandal
Profiles Greensill scandal

Sage, which he went on to lead when he left Westminster, acquired Fairsail in 2017 and changed the name to Sage People Ltd. Mr Kelly is listed on Companies House as the director of the original HR software company between December 2010 and October 2012.

His spokesman said: "Upon his appointment as COO, Stephen resigned all outside commercial directorships, including roles at angel invested companies, and did not attend board meetings relating to previous appointments." The spokesman added that he was appointed via an open recruitment process and passed all vetting procedures.

Government transparency records show that after he left the post during his time as CEO of Sage there were five meetings between the company and either Sir Jeremy Heywood and Mr Manzoni, though it is unclear whether Mr Kelly was involved in these in any way.

At the time it was the UK's largest tech company, Mr Kelly's spokesman said, and representatives would therefore "meet regularly" with government officials.

Lord Maude of Horsham, a former Cabinet Office minister, on Wednesday defended his role in recruiting Mr Crothers to Government. The Tory peer has been tasked with undertaking a review of Whitehall for Mr Johnson and was a minister for the Cabinet Office under Mr Cameron.

"I gathered together a collection of the best commercial directors from around Whitehall and he was one of them. He was one of the capable commercial directors who had a big contribution to make by saving taxpayers' money," he told the Guardian.

Lord Hogan-Howe said his role advising Greensill usually involved one meeting each month and added: "I advised on product and organisational development but not on opportunities in the Cabinet Office or Government." A Cabinet Office spokesman said the peer "transparently declared his interests, which were published online".

The Telegraph attempted to reach Sir John Manzoni for comment.