Greensill: Cabinet Secretary tightens rules around second jobs after scandal

An investigation prompted by revelations Bill Crothers worked for three months as both Government procurement chief and an adviser for Greensill Capital found no instances of officials holding outside interests which conflicted with their roles.

Fewer than 100 senior civil servants held paid employment outside Whitehall and “the overwhelming number” of top officials acted in accordance with the rules.

But Case set out a series of steps to tighten the rules, including requiring all senior civil servants to set out relevant interests to the head of their Whitehall ministry on at least an annual basis.

These returns would be scrutinised by audit and risk committees and each Whitehall department would be required to complete an annual return to the Cabinet Office.

Departments’ annual reports would also include a register of relevant interests for board members, including senior civil servants.

Case said he was considering whether “new structures need to be established” to oversee the situation.

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The Cabinet Office had also been working with the Advisory Committee on Business Appointments (Acoba) to improve the “operation and efficacy” of the rules governing the jobs former officials took up.

Crothers left the civil service in November 2015 but had begun an advisory role at Greensill Capital in September that year and later became a director of the firm.

Case told the Public Administration and Constitutional Affairs Committee (PACAC) it was a “pretty extraordinary set of circumstances” that took place before his time as the head of the civil service.

“We cannot explain how these decisions were taken or why,” he told MPs.

“That’s why they are of acute concern.”

Case had ordered all permanent secretaries to set out the outside interests of civil servants in the wake of the case.

Setting out his findings in a letter to PACAC chairman William Wragg, he said he was “aware of fewer than 100 senior civil servants who hold paid employment alongside their civil service role”.

Examples included “tutoring or fitness instruction” and permanent secretaries had found there to be no conflict with the civil service code.

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Senior civil servants’ outside interests were “often providing contributions to wider public life”, Case said, citing cases such as a magistrate, reservist, school governor or charity trustee.

He added: “Having completed this exercise, I am reassured that the overwhelming number of senior civil servants act in accordance with the rules.

“Nonetheless, the process has also highlighted areas where we can make improvements. In particular, I am clear of the need to introduce greater consistency across the civil service in how the interests of senior civil servants are managed.”

Case said the new procedures he was introducing would be “robust and transparent”.

It comes as it was revealed David Cameron repeatedly lobbied Bank of England officials as he grew increasingly frustrated about Greensill Capital’s failure to access a state-backed coronavirus support scheme.

The former prime minister, who worked as an adviser for Lex Greensill’s financial firm, also contacted the Treasury as he tried unsuccessfully to get the firm’s activities covered by the Covid Corporate Financing Facility (CCFF).

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Cameron wrote several times to the Bank’s deputy governor Sir Jon Cunliffe, who had been the former prime minister’s envoy to the European Union, about the “incredibly frustrating” situation.

Correspondence since March 1, 2020 was released under Freedom of Information laws.

Cameron emailed Sir Jon Cunliffe, the Bank’s deputy governor, on March 5 2020, the first in a series of emails and calls disclosed between the former prime minister, Greensill and Threadneedle Street.

n March 17, Greensill and Cameron held a call with Bank officials to explain Greensill Capital’s supply chain finance operation.

The minutes of the call note that Greensill Capital “explained that they were coming under significant pressure in current market conditions” and called for a re-establishment of the secured commercial paper facility scheme used in the 2009 financial crisis to “ease market conditions and protect the supply of working capital to the real economy”.

By April 2020, the correspondence moved on to Greensill’s attempts to access the newly-created CCFF, under which the Bank lent money directly to large companies, backed by the Treasury.

On April 3 2020, Cameron wrote to deputy governor Sir Jon “to ask for your help”, claiming Greensill had numerous conversations with the Treasury but “have failed to get anywhere”.

He said “the request is simple”, asking for the CCFF to cover bonds issued in respect of supply chain finance – the area of business which Greensill specialised in.

Cameron claimed this would allow Greensill to “pump billions” into small firms, including every pharmacy working with the NHS.

As his efforts failed to make progress, Cameron wrote on April 22 2020, telling Sir Jon it was “incredibly frustrating”.

“Even a small participation of SCF in the CCFF would make a big difference in catalysing the market,” he said.

Cameron acknowledged that ultimately the scope of the scheme was a “Treasury call” – adding that “we continue to talk to them at every level” – but he asked Sir Jon to have a “one-to-one call” with Greensill.

A Bank write-up of that call said that most if it was taken up by “Lex explaining their business model”, while Sir Jon was “clear that Greensill would currently fall outside the boundaries of the scheme” and that changes to the parameters were a matter for the Treasury.

At a Commons Public Accounts Committee hearing today, Treasury permanent secretary Sir Tom Scholar said Rishi Sunak’s department was “persistently” lobbied by Greensill.

Sir Tom told the committee that he believed the Treasury had dealt with the company’s approaches – including from Cameron – in a “completely appropriate way”.

Charles Roxburgh, the second permanent secretary in the department, told MPs the firm’s approaches were rejected because they were outside the scope of the scheme.

“They were proposing that special purpose vehicles could have access to the scheme and that was not consistent with the scheme’s design,” he said.

“They were suggesting that the CCFF should buy commercial paper that had non-standard terms and again that was not consistent with the design.”