Is there a business case in existence for the announced ‘National Flagship’?

23rd June 2021

When the proposed new national flagship was announced, there were a number of odd things about the announcement.

(Please see this earlier post on this blog, especially the many highly informed and insightful comments beneath.)

One thing which seemed especially odd was that it was announced by the prime minister’s office – and the only mention of the royal navy or of the ministry of defence was that navy would crew the boat.

There was no mention – explicitly – of which government department would pay the procurement/commissioning of the ship – nor of which government department would be responsible for its envisaged thirty years of maintenance and repair.

As a former central government public procurement lawyer, this seemed strange.

The announcement seemed, well, just flimsy – the shallowest of press releases.

Since then it has become obvious why the announcement was so flimsy.

The reason is that the thinking behind the announcement also has been flimsy – if it can be characterised as thinking at all.

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As the Sunday Times has now reported:

‘The Cabinet Office, which was originally asked to devise the plans, the Department for International Trade, which was originally expected to benefit from them, and the Ministry of Defence, which has now been saddled with the project, are all in the dark about where the money is coming from, not least because the MoD is fighting to plug a £16 billion black hole in its annual budget.

[…]

“‘Another official confirmed: “The royal yacht is a complete and utter shitshow. When it was first floated, the PM wanted it to be built in Britain. It was given to [Cabinet Office minister Michael] Gove to sort out, but it became clear that under procurement rules it could only be built here if it was a navy thing with a bunch of fake weapons on board. So Gove passed it on to the MoD. The Treasury stayed out of it.’

None of this is a surprise; indeed, all of this can be inferred just from a close critical reading of the original announcement.

Anybody with even the most basic awareness of public procurement would realise that if this was a civil (non-military) project, there could be no legal restrictions as to which tenderers would be considered.

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Now the Guardian is reporting:

‘Downing Street has backed down from insisting that the Ministry of Defence should foot the whole bill for new royal yacht Britannia in a Whitehall row about the funding of the £200m vessel.

[…]

‘The Ministry of Defence (MoD) is resisting being lumbered with the cost of the project at a time when it is trying to fill a £16bn backlog in its equipment budget.

‘On Monday, Downing Street indicated that the yacht would be paid for out of the defence budget, with a spokesperson saying: “The procurement process, which is being done through the MoD, will reflect its wide-ranging use and so it will be funded through the MoD.”

[…]

‘No 10 then clarified on Tuesday that the MoD would initially only pay for the procurement process, and that the rest of the costs has not been allocated.

‘A Downing Street spokesperson said: “This is a ship that will promote UK trade and drive investment back into our country. So we expect any costs of building and operating the ship will be outweighed by the economic benefits that it brings over its 30-year lifespan.”’

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This is what public policy-making and decision-making looks like when it is made up as it goes along.

The most plausible explanation is that nobody in government has a clue about how to go about the procurement exercise for this boat.

I am not a lobby journalist – and so I can add not other telling quotes from insiders, but I can add something.

Prompted by the announcement, I thought I would make a freedom of information request.

I made the request to the cabinet office, on the understanding that the cabinet office was the department responsible for that announcement of national flagship – and that was also the department that would deal with freedom of information requests for the prime minister’s office.

And today came the response to the request.

The cabinet office does not possess a business case for the national flagship – even though it was the department that announced it.

This odd situation can perhaps be explained as follows, either:

– there is a business case held in Downing Street, but my request clumsily missed it;

– there is a business case held in Downing Street, but the cabinet office has given me false information;

– there is a business case for this announced procurement, but it is held in another government department and has not been shared with the prime minister’s office or the cabinet office; or

– there is no business case, despite the public announcement.

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What we do know is that a business case should always precede a procurement exercise – and so the fact that a government department may then handle the procurement exercise does not mean that the business case is then created.

That would be to put the dinghy before the boat.

Business cases precede procurement exercises – and should determine whether there is a procurement exercise or not.

The reasonable suspicion of anyone following this daft exercise is that there is no business case – and that this prestige procurement was announced without any preliminary thought whatsoever.

And now the government cannot back down.

And this is how £200 million (at least) is to be spent by the government.

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POSTSCRIPT

I have now found this fascinating parliamentary answer – there appears to be no ‘assessment’, only ‘discussions’.

I have set out further information from answers to parliamentary questions in this thread:

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There cannot be ‘Public Sector Reform’ without genuine transparency and a general duty of candour

20th June 2021

(This is the third in a trilogy of short posts about the accountability of the United Kingdom state – see Garbage in, Garbage Out and The Accountability Gap.)

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Every so often there will be some politician – usually Michael Gove but sometimes someone else – who will urge that there be ‘public sector reform’.

This reform should be ‘radical’ or ‘fundamental’.

Heads will nod, and hands may even clap.

Worthy pdfs will be clicked on earnestly, only for the tabs to be then left unread.

And then nothing really happens until the next time some politician – usually Michael Gove but perhaps someone else – will urge that there be ‘public sector reform’.

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What is often missing in many of these heady, fine-sounding proposals is the one thing that would genuinely be radical or fundamental.

This would be to force public sector bodies to disclose information against their will.

For as long as public bodies – politicians and officials – can pick and choose what information can be disclosed publicly, there can never be any meaningful reform of the public sector.

There needs to be a tension – a check and a balance – in respect of any public body’s estimation of itself and its performance.

Unfortunately – as typified by the cabinet office under Michael Gove – there is a general public sector disdain for transparency and freedom of information.

There always seems to be some reason to keep public sector information secret – from ‘national security’ to ‘commercial confidentiality’.

Indeed, the most dismal and insincere official documents in existence are freedom of information non-disclosure decision letters.

Everyone involved knows that the content of such letters is faithless guff – but nobody with any power seems to care.

When there is no duty of disclosure and no duty of candour there can be no holding of the public sector to account.

And if there is no way of holding the public sector to account then any ‘public sector reform’ will not succeed against the private interests of the officials and politicians involved – nor against the interests of external suppliers.

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So, to mimic David Hume, there is something to ask of any public sector reform, whether it is proposed by Michael Gove or somebody else:

Will the proposed public sector reform result in the public sector disclosing information that it otherwise would be unwilling to disclose?

No?

Will the proposed public sector reform mean that officials and politicians – and relevant third parties – being candid when they otherwise would not be?

No?

Then commit the proposed public sector reform to the flames, for it will contain nothing but sophistry and illusion.

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Judicial review, Dominic Cummings and ‘Potemkin paper trails’ – and why courts require reasons for certain decisions

11th June 2021

In three tweets in a thread posted this week, Dominic Cummings, the former assistant to the prime minister, refers to ‘Potemkin’ paper trails and meetings.

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What does he mean?

And does he have a point?

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What he is alluding to, of course, are the ‘Potemkin’ villages, where things in bad conditions were dressed up to be in good conditions so as to mislead others.

In the context of judicial review, Cummings presumably does not mean that bad reasons would be dressed up as good reasons.

What he instead intends to mean is that there could be artificial reasons and contrived meetings the purpose of which was to make a decision judge-proof.

To a certain extent, he has a point.

In the judicial review case in question, had there been evidence of officials conducting any form of evaluation exercise then the tender award may have been harder to attack legally.

And such an exercise could, in reality, have been nothing other than going through the motions rather than anything that could have actually led to another agency actually getting this valuable contract.

But this is not the reason the courts require reasons for certain decisions – and it may not have changed the judgment in this case either.

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Judges and courts are not stupid and naive.

Judges and courts know full well reasons can be artificial and contrived.

The judges were once barristers and solicitors and, as such, they would have had considerable experience of advising clients on providing reasons for certain decisions. 

The purpose of requiring reasons for decisions – and for ministers and officials to say they are true reasons – is to make it more difficult for bad and false decisions to be made.

For example – take the decision by the government to seek a prorogation of parliament in 2019.

No minister or official – or adviser – was willing to sign a witness statement (under pain of perjury) as to the true reason for advising the Queen to prorogue parliament.

And without such a sworn (or affirmed) reason, the government lost the case.

Reasons also provide a reviewing court with a basis of assessing whether a decision was so unreasonable that no reasonable decision could have made it, and also of assessing whether relevant considerations had been included and irrelevant considerations were excluded.

Providing reasons does not provide an escape route for cynical and irrelevant and unreasonable decision-making.

But it is an impediment, and one that makes it harder for ministers and officials to get away with bad decision-making. 

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And in the recent judicial review, it is not clear to me (as a former central government procurement lawyer) that even an artificial ‘Potemkin’ exercise would have necessarily saved the decision from legal attack.

Awarding a high-value contract to cronies where a nominal (though documented)  exercise of discretion had not shown any actual objective advantage over other possible suppliers would still have been open to legal attack.

So this is not necessarily a case where the failure to provide a ‘Potemkin’ paper trail is to blame for the loss of a legal case.

The pram may well have fallen down the stairs anyway.

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Why is it so difficult to prosecute for the sale and purchase of peerages?

7th June 2021

A person is in the news because they donated £500,000 to a political party days after taking a seat in the house of lords.

This post is not about that person.

I have no idea about the circumstances of that appointment. and so I do not make any allegations in respect of those circumstances – and this is not just safe libel-speak, I genuinely do not know, and nor (I suspect) do you.

(And anyone commenting below who makes an allegation of criminality in respect of that appointment – or anyone else – will not have their comments published – this is not Twitter, you know.)

This post is instead about the legislation that is usually mentioned when such appointments are made: the Honours (Prevention of Abuses) Act 1925.

It is a curious statute – not least because the offences it creates appear hardly to have ever been successfully prosecuted.

(The one early exception appears to be Maundy Gregory.)

 

*

The legislation has one substantive clause that in turn creates two offences.

The first offence is (and in language itself as cumbersome as the name, title and style of any obscure peerage):

‘If any person accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, or for any purpose, any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.’

Let’s try to make sense of this word-soup.

This first offence relates to the person who is (in effect) on the supply-side of a relevant transaction – the person ‘accepting or obtaining’ the ‘inducement or reward’.

This supplier has to be shown to (a) accept, (b) obtain, (c) agree to accept, or (d) attempt to obtain [x] in return for [y].

The [x], in turn comprises two things: (a) any gift, money or valuable consideration which also has the quality (b) of being an inducement or reward for procuring or assisting or endeavouring to procure the grant of [y].

This means proof of a ‘gift, money or valuable consideration’ is not enough: there also needs to be proof of its purpose.

The [y] is the most straightforward: ‘the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant’.

What all this means is that showing there is cash and an appointment is not enough: there has to be proof of intention to the criminal standard of proof – that is (in general terms) beyond reasonable doubt.

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The second offence deals with (in effect) the demand-side:

‘If any person gives, or agrees or proposes to give, or offers to any person any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.’

There is no need to unpack this like the first offence – but you will notice that again there is the need to prove that the ‘gift, money or valuable consideration’ is for the purpose of bing an inducement or a reward.

So, as before, showing there is cash and an appointment is not enough – there needs to be proof of intention.

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Those with good political memories will recall the ‘cash for honours’ investigation of 2006-2007.

This investigation included the extraordinary moment of a dawn-raid on the home of a government official and the questioning by the police of the then prime minister.

All very dramatic.

But nothing came of it.

No charges were brought.

The Crown Prosecution Service provided detailed, legalistic reasons for their decision not to prosecute.

The CPS averred that not only did it need to prove intention (on both sides) but also that it also had to prove that there was an agreement:

‘If one person makes an offer, etc, in the hope or expectation of being granted an honour, or in the belief that it might put him/her in a more favourable position when nominations are subsequently being considered, that does not of itself constitute an offence. Conversely, if one person grants, etc, an honour to another in recognition of (in effect, as a reward for) the fact that that other has made a gift, etc, that does not of itself constitute an offence. For a case to proceed, the prosecution must have a realistic prospect of being able to prove that the two people agreed that the gift, etc, was in exchange for an honour.’

These CPS reasons were compiled and endorsed by some very clever criminal lawyers – though the rest of us may struggle to see the absolute need for proving an agreement under the 1925 Act.

Nonetheless the CPS insisted:

‘In essence, the conduct which the 1925 Act makes criminal is the agreement, or the offer, to buy and sell dignities or titles of honour. Section 1(1) is drafted in wide terms and captures any agreement in which a seller agrees to procure a peerage in return for money or other valuable consideration. Section 1(2) is also drafted in wide terms and captures any agreement in which a buyer agrees to provide money or other valuable consideration, in order to induce a seller to procure a peerage.’

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If the CPS are correct in this interpretation and construction of the statutory offences, then this makes it hard, if not impossible, for the offence ever to be prosecuted successfully.

And, even without the CPS gloss, the requirement to show intention made the offence hard to prosecute in the first place.

There may be other laws which may apply – for example, fraud legislation – but not the one piece of legislation that actually has the sale of honours as its dedicated purpose.

For, as long as those involved make sure there is no paper-trail and that the choreography of nods-and-winks are done in the right order, there is no real danger of any prosecution under the 1925 Act.

What the 1925 Act prevents is the blatant Lloyd-George style of an open market for the sale and purchase of honours.

For a statute to only regulate (in effect) the seemliness of the trade in peerages and other titles is a very, well, British (or English) thing to do.

Otherwise, the 1925 Act is an ornament, not an instrument – and so it is as much a mere constitutional decoration as any ermine robe, and is just as much use.

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Five glaring issues about the announcement of the ‘new national flagship’ prestige procurement

2nd June 2021

You may think that after that botched ferry contract that the government would steer clear from further Brext-related maritime procurements.

Then the chair of the public accounts committee said:

‘The Department for Transport waited until September 2018 to start thinking about the risks to freight transport across these important routes and entered into a £13.8m contract with Seaborne Freight despite it being a new operation, owning no ferries, and not having binding contracts to use the specified ports.

‘We will be pressing the Department for answers on how it awarded its three new ferry contracts, what it is doing to manage risks and exactly what it intends to do now it has axed the contract with Seaborne.’

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You would be wrong, for the government has now announced a new procurement exercise, the cost of which is reported to be currently set at £200 million – that is about fifteen times more expensive than those non-existent ferries.

It is a curiously worded announcement – and should be read carefully in full.

Here are five observations about what the announcement says – and does not say – about this prestige project – from my perspective as a former central government public procurement lawyer.

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There is no mention of the royalty in the announcement.

Given previous attempts at such a flagship have said that it would be a new ‘royal yacht’, this must be a deliberate omission.

One would not accidentally fail to mention that the new ship was to be a royal yacht and have royal blessing if such things were true.

Indeed, the glaring omission in the announcement indicates that the announcement is a negotiated document, where the wording has been subject to intense consideration and internal discussions and approvals.

And so, although the Crown is prevalent in the polity of the United Kingdom – from underpinning the executive, the legislature and the judiciary, royal charter bodies, the maintenance of the queen’s peace and the armed services – there appears to be one thing the royalty does not want to be connected with, and that is this ship.

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The second omission is that the announcement does not say – expressly – which government department will be responsible for procuring (and/or commissioning) and – as importantly – maintaining the ship.

The announcement hints that it may be the Ministry of Defence – and there is mention that ‘the ship will be crewed by the Royal Navy’.

And given that the MoD is the one government department with the experience and resources to procure and maintain such a ship then this would be its natural administrative berth.

But the announcement does not say – expressly – that it will be under the MoD, and the purpose of the vessel does not appear to be a military one.

And there is no particular reason why the MoD – with its own budget constraints – would want to be given the costs of procuring and maintaining a ship with no obvious military purpose or value.

If – and it is an ‘if’ – the ship is to be procured and maintained by another government department, but with an agreement with the MoD for the use of the Royal Navy for crewing the ship, then we have the prospect of Whitehall (ahem) surf-wars over which department will be responsible in the event of any problems.

And prestige procurement projects do tend to have problems.

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A third omission from the announcement is about which suppliers will be responsible for the whole-life maintenance of the ship.

The announcement states that a ‘tendering process for the design and construction of the ship will launch shortly’ – but there is no mention of any similar tender exercise for the upkeep and repairs to the ship over its expected thirty-year service.

Given that this ship is (intended to be) a bespoke construction, the question of ensuring that there are sufficient arrangements for its ongoing maintenance is just as important as the initial design and construction.

A plausible scenario is that a bespoke ship is designed and constructed but its service life is severely limited as no thought had been put into what happens next with such a bespoke construction.

Another plausible scenario is that the costs of maintenance and repair over thirty years come to be far higher than the costs of the initial design and construction.

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A fourth omission is any evidence that the practicalities of this procurement exercise have been thought-through.

For instance, there is no explanation as to why it would not be more cost-effective to refit or to purchase an existing off-the-wharf (ahem) ship and to convert that ship for the envisaged purpose.

Indeed, there is no mention of any business case at all for this specially designed and constructed flagship.

There is also no mention of the role, if any, of private finance – and if there is to be a private sector element, who will bear the risk of any commercial problems.

And this, of all projects, will be too big a project to sink.

There is also no mention of what would happen if (which is conceivable) it would be cost-effective for the ship to be designed by a United Kingdom company but (which is also conceivable) it would not be cost-effective for that ship to be constructed in the United Kingdom.

Could we have a repeat of the (for some) embarrassing ‘blue passports’ situation – where a tender for another prestige Brexit project was awarded to a foreign company?

Although the announcement waxes lyrically about the procurement in that the ‘intention is to build the ship in the UK … help drive a renaissance in the UK’s shipbuilding industry and showcase the best of British engineering around the world’ the government does not know – and cannot know – at this stage whether any value for money tender would result in the ship being constructed in the United Kingdom.

(And as this would seem to be a civil rather than a defence procurement, there are also potential issues about excluding external suppliers from this high-value tender exercise.)

The envisaged timings also seem rather ambitious.

Although carefully worded, this announcement is currently more of a press release than any serious public procurement proposal.

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Finally: £200 million pounds is, for this purpose, not that much – even if whole-life costs are excluded.

Indeed, one could imagine a considerable amount of such a budget being taken up by the to-and-fro of getting instructions and approvals for the design of this bespoke vessel.

Imagine: ‘the prime minister’s office thinks the wallpaper for the main conference room looks too cheap’ and so on.

And the recently reported ‘super-yacht’ of Amazon founder Jeff Bezos is estimated to be costing $500 million – which in sterling would be considerably more than the reported £200 million.

This new flagship may end up being the smallest ship in a harbour, with dot-com billionaires, oil-wealthy rulers and assorted oligarchs waving down at it from their super-duper yachts.

It may well be that to really impress the international business community, we are going to need a bigger boat.

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Prestige public procurement projects often fail – because they are commenced for non-commercial purposes and without thinking foreseeable risks through, and when those foreseeable problems do arise, too much political capital has been invested for the project to then be seen to fail.

The better way, of course, for the United Kingdom to ‘showcase’ here its post-Brexit seriousness about trade and business would be to have a sensible and realistic procurement exercise – including showing that the government is unafraid to pull a project if it does not make commercial sense.

A project that instead ‘showcases’ the commercial ineptitude of the United Kingdom will not help but will hinder our post-Brexit trading future.

But this sort of constructive criticism will be dismissed as doomstering and gloomstering and that voters do not want such negativity.

So those of us who want a more sensible and realistic approach from the United Kingdom to its post-Brexit future are going to need a bigger vote.

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Why ‘how to regulate’ guides are invariably nice and colourful but impractical

25th May 2021

It would be unfair to name the particular public body responsible but a new guide to regulation has just been published.

The guide is lovely to look at.

Pages and pages of colourful graphics, with boxes and arrows.

A well-meaning sequence of platitudinous or vague statements are made which together are to be taken as a guide to good regulation.

The guide is pretty and clever and earnest.

And the guide seems completely useless.

One suspects no better regulation will be made because of it, nor any better regulatory decision.

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The problem is not that, on its own terms, it is wrong.

On its own terms, the guide is quite wonderful.

Like a self-contained and lovingly illustrated code in some invented language like Dwarvish or Klingon or Dothraki.

The obscure illuminated manuscripts of our public policy age.

But the guide – and many guides like it – may not correspond to reality.

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The essence of regulation is practical, not theoretical.

The basic question is: what behaviour or outcome would happen (or not happen) but for the regulatory measure?

How will things actually be different (or the same) because of the intervention (or lack of intervention)?

And will those things really be more desirable than otherwise would be the case?

If the regulatory measure – either a rule or a decision – does not in practice affect behaviours or outcomes as desired, then it may be many things but it fails as a regulatory measure.

So: the best guide to regulation is work backwards from what is happening (or otherwise would happen) and see how that behaviour or outcome can be made to be different (or forced to stay the same) in a way desired.

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The problem with flowchart-based – and also with checklist-based – regulation is that it makes the regulator feel that something is being done.

Like the old joke about the driver who always looks in the rear-view mirror before pulling out – it does not matter what is coming, as long as they have looked in the rear-view mirror they can proceed to pull out.

In so many fields of human activity – from drug-taking to sex work to public health rules for coronavirus and electronic surveillance and public procurement (just to take a few public policy bug bears) – there is a belief that there must be regulations, as something must be done.

The problem with colourful guides on ‘how to regulate’ the process takes priority over practical effect and implementation.

There should perhaps be a new regulator to prevent flowchart-based regulation.

Perhaps it can be called OffChart.

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Access to decision and policy-making is a right but not a privilege: David Cameron, lobbying, and regulation

13th April 2021

Let us start with one proposition, so as to see if it is sound or not.

The proposition is: that in a liberal democracy there should be no closed class of those who can seek to influence public policy.

Just as – in theory – any person can go to the lobby of the house of commons or write a letter to a member of parliament, any person can also attempt to speak to a minister or protest outside a ministerial office.

If this proposition is sound, then there is nothing, in principle, wrong with any person seeking to lobby any parliamentarian or minister.

And if that is a correct statement of principle, then it follows that the principle can be asserted by persons one disagrees with or disapproves of – including finance companies and former prime ministers.

Framed in this way there is a certain superficial plausibility to the contention that the former prime minister did nothing wrong in seeking to influence ministers about a company in which he had a personal interest.

Any wrongdoing would, it can be contended, be at the ‘supply-side’ of ministers and officials who wrongly were influenced by such lobbying, not the ‘demand side’ of the person seeking to obtain influence.

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Let us now look at rules.

As the estimable Dr Hannah White explains in this informative and helpful article, it would appear that the issue of Cameron’s lobbying is not about whether rules have been broken but that there appear to be no rules to be broken.

And so we have a gap.

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But.

There is something wrong.

It may be that there are no rules that have been engaged, still less broken.

And it may well be that one can (just about) aver that the general principle of openness means that any person from you to Cameron can seek to lobby a minister.

But it still seems wrong.

Yet a general sense of wrongness is not the same as effective regulation.

What can be done, if anything can be done?

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Part of the problem is indeed with the ‘supply side’ – any approaches by any person, former prime ministers or otherwise, should be reported and logged, and those approaches must be spurned unless there is absolute transparency.

It is not enough that we have the ‘good chaps’ theory that, of course, no minister or official would be (wrongly) influenced.

The general principle that any person in a liberal democracy should be able to seek to influence a minister does not mean such approaches should be cloaked – the quality of openness that attends the former carries over to the latter.

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Switching to the ‘demand side’ of seeking political or policy influence, the general principle that any person in a liberal democracy should be able to seek to influence a minister does not mean that there has to be an ‘anything goes’ approach.

Just as everyone has the ‘right’ to dine at the Ritz – but it an empty right when one cannot afford it – a right to lobby those with power is an empty right if one does not have connections or the know-how about making such access effective.

Unless lobbying is regulated then there will be a natural tendency for those with money – such as a finance company – and those with the best connections – such as a former prime minister – to have far more effective access and influence than others.

This then undermines if not negates the rights of others, as influencing decision-making, rule-making and policy-making becomes the preserve of those with better connections.

It is the right of the privileged, but one masquerading as a a general right of openness.

Any company should have the right to make representations to the government – but only on the same terms as as any other company.

This would mean that it is the merits of the representation that makes a difference, rather than the extent of the access.

And any lobbyist – of whatever background –  should not have a greater right of access than any other lobbyist.

This means by implication that there are certain individuals – such as former ministers and former senior officials – who if they are to be permitted to approach their former colleagues, should only do so under the full glare provided by absolute openness and transparency, and in accordance with published procedures.

And if such absolute openness and transparency and procedural certainty is not feasible, then they should not be able to directly approach ministers and officials at all – even if it is in respect of their personal interest (as opposed to on behalf of a paying client, which is a gap Cameron was able to exploit).

They can write a letter to a member of parliament, or wave a placard on Whitehall, like anyone else.

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Why the Deloitte clause for drafting ministerial answers is a further assault on civil service norms

25th March 2021

One of the marvels of modern story telling is, of course, Bagpuss.

And one of the most instructive stories of Bagpuss is The Mouse Mill, where the mice devise and construct a mill for the provision of chocolate biscuits.

[Spoiler warning for episode eight of Bagpuss.]

*

*

The mice, however, are not making the chocolate biscuits out of butterbeans and breadcrumbs as they aver.

They are instead simply recycling chocolate biscuits, thereby controlling both ends of a supply chain.

Until now, the mice’s chocolate biscuit factory was perhaps the most ingenious method yet conceived of having it both ways in the provision of a good or a service.

But now we have the Deloitte contract for track-and-trace, where they appear to be able to answer parliamentary questions and freedom of information requests about their very own services.

*

Over at the Huffington Post, the experienced and well-regarded political journalist Paul Waugh has disclosed that Deloitte are drafting the answers to parliamentary questions in respect of matters for which Deloitte are providing the government with services.

I have not seen the contracts, but on the safe assumption that Waugh is a reliable news source, we can trust the following report (emphasis added):

‘Four different contracts show that Test and Trace has been using Deloitte for “general management consultancy services” ranging from building testing capacity to stockpiling and logistics oversight.

‘But buried within the contracts are details of help provided with PR and communications, with a requirement to “draft and respond to parliamentary questions, Freedom of Information requests, media queries and other reactive requests” and to “support lines to take and Q&A’s in anticipation of queries”.’

*

You do not need to have suffered years of experience with government contracts to know that legalese here quoted by Waugh rings true.

It is certainly not the sort of wording anyone would invent – and so it is no doubt the case that this is an actual contractual provision.

And the legalese is precise – crucially the contractual wording is not about simply providing the information that would allow the civil servants to draft and respond to parliamentary questions and freedom of information requests.

Had that been the purpose and intention of that contractual provision, then that is what the provision would have said.

Instead the parties chose to use wording where the external provider is obliged to draft and respond – and not the civil servants.

As you will see, this detail matters when we come to the government’s rejoinder.

*

As Gemma Abbott, legal director of the Good Law Project, is quoted as saying:

‘We have a government so addicted to outsourcing that it has even outsourced being held to account.

‘If a member of the public submits an FOI request, or an MP asks a parliamentary question about the government spending millions on contracts with Deloitte, it seems that it’s Deloitte at the other end marking its own homework – it is beyond parody.’

Her point is well made.

*

‘…the mice put breadcrumbs and butterbeans in the top, and they work the mill, and out come the chocolate biscuits…’

– Bagpuss

‘Impossible, impossible, it isn’t true. I am going round the back to what is happening’

– Professor Yaffle

*

There is, of course, nothing wrong with any consultancy firm providing services to the government – and, indeed, there is an advantage to certain tasks being allocated to external professional advisers and service providers.

But there are certain tasks which should not be contracted-out and outsourced.

The problem here is not with Deloitte offering to provide the service of providing answers to parliamentary questions and freedom of information requests – for they are a provider of services – but the agreement of the government that this job be undertaken by external providers.

The real culpability lies with the government.

The effect of the transaction is that a service provider will be responsible for providing “draft[s] and respon[ses] to parliamentary questions, Freedom of Information requests, media queries and other reactive requests” about their very own services.

This cannot be right in principle.

*

At the end of the Huffington Post story there is a rejoinder from the government:

‘The government employs contractors in the same vein that private businesses do and responsibility for answering parliamentary questions, freedom of information requests and media enquiries rests firmly with a team of civil service communications professionals within the Department of Health and Social Care. Every single response is subject to the highest levels of scrutiny to ensure they are both factual and detailed.’

If this was the case, then it is difficult (if not impossible) to explain the legalese quoted in the news report.

Either the contractual wording sets out the true intention of the government or that press statement does – both cannot be (equally) true.

And if the government’s rejoinder is true, then the legal drafting quoted in the news report would (and could) have been different.

*

Why does this matter?

The constitutional significance of this is set out well in a thread by Alex Thomas of the Institute of Government:

*

So the contractual provisions – and presumably the services performed thereunder – are an assault on the norms of the civil service.

Another assault, to go with all the others.

This one, however, does not seem especially directed or deliberate – just a shrug and a signing of some contracts.

We do not even get the glamour of a chocolate factory, or the elusive near-satisfaction of chocolate biscuits being procured only to then be taken away.

The government should not sign any further contracts with the wording of this clause.

There should, of course, be a contractual obligation on service providers to assist the government in respect of freedom of information requests and parliamentary questions and to provide necessary information.

But contracting to provide the service of ‘drafting and responding’ is a significant step too far.

Having control of both ends of the line of accountability is inappropriate – a service provider to the government should not be ‘drafting and responding’ to queries about that service.

One should not be able to both have a chocolate biscuit and to eat it. 

***

Declaration: I was a central government lawyer 2003-2005 dealing with freedom of information requests on central government commercial matters.

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Why the high court was right to deny standing to members of parliament to bring public law claims – and why such ‘ornamental claimants’ are a bad thing

23rd February 2021

*

‘Now a cowboy needs a hat, needs a hat, needs a hat

‘And a pair of fancy boots, fancy boots, fancy boots’

– TikTok meme, circa 2020-21

*

Any legal case at its most basic needs two things.

First: it needs a question that a court can determine – a question of law or evidence that is capable of being determined one way or another by legal proceedings.

Say whether there had been a breach of a contract, or whether a theft had taken place, or whether a government department had acted within its legal duties.

And second: a legal case needs somebody to bring it to the court for that determination.

Sometimes – in criminal cases – that somebody can elsewhere in Europe be a magistrate themselves, or a prosecutor appointed by the state.

But in civil cases – where a party sues another party – that somebody has to be somebody willing and able to bring the case.

And – in England and Wales at least – whether a person can bring a case is described as whether that person has ‘standing’ to bring a claim.

*

Usually in civil cases it is obvious who can and should bring a claim.

The person who can bring a claim is the person who has been wronged.

A party to a contract can sue the other party to the contract if the latter is in breach, or a person who is victim of a tort can sue the tortfeasor (which must be one of the more glorious words in legal vocabulary), and so on.

In what is called ‘private law’ there is usually no problem identifying who can – and who cannot – bring a claim before a court.

*

But there is a gap – and that is in ‘public law’ cases.

(Public law is the area of law which deals with the special legal rules which apply to public bodies and others exercising similar powers.)

Who should be able to bring a claim that a public body is acting unlawfully?

The starting point is that a person directly and adversely affected should be able to bring the case before a court so that the lawfulness of what a public body has done or not done can be determined.

And so, for example, a person facing deportation or a person whose property is about to be blighted, and so on, can often bring a judicial review in respect of a relevant decision by a public body.

(A judicial review is when, literally, a thing is reviewed judicially to ascertain whether it within the powers of the relevant body.)

*

But.

And it is a huge but.

Not all unlawfulness by public bodies will be neatly accompanied by a person being directly and adversely affected.

Take, for example, the topical example of a contract awarded by the government to a supplier where there has been neither an advertisement nor a competitive procurement exercise.

In these circumstances there is not even a disappointed bidder who would have standing to bring a claim.

What should the law – more specifically, what should should a court  – do?

*

One answer, which appeals to those who delight in unchecked executive power, is that nobody should have standing.

That a public body should be allowed to act unlawfully generally unless a person can be found who has been directly and adversely affected.

But this cannot be in the public interest.

And so the courts – sensibly – have expanded the scope of who can bring public law claims in the public interest.

Accordingly, organisations with a sincere interest in an area of public policy, but with no direct financial interest in the outcome of a challenge, are often granted standing to bring a claim.

But how wide should this scope be?

And this is the question asked – and answered – in the procurement transparency case decided last week.

*

There were four claimants in that case:

(It is a pity they could not have added more parties with ever-shorter names so we could have had a pleasing upturned triangle of names.)

You will see that the second, third and fourth claimants are members of parliament.

Surely if anyone can claim to be able to be guardians of the public interest it would be elected representatives of the democratic chamber?

But the court held otherwise: that the three members of parliament did not have standing to bring this claim.

The court was right to do so.

*

The reason the court was right to do so goes to a fundamental principle in the constitution of the United Kingdom: the separation of powers.

This familiar phrase means, in practice, that different elements of the state have different remits, and that they should act as a check and balance on each other.

A person may well be elected to parliament –  but before the courts they are no different to any other person.

An elected representative has various privileges and rights – some of which can carry considerable weight and power.

For example, members of parliament have absolute privileges in what they say and do in parliament and can hold ministers to account.

But they do not also get any elevated right to bring legal proceedings against those same ministers.

(A member of parliament may have standing on other grounds, but not just because of the simple fact of their office.)

If members of parliament were accorded a special status to bring a public law claim, this would mean that there would be a significant overlap between parliament and the courts.

There would also be a tendency for the work of the courts to be further politicised and for proceedings to become openly partisan devices.

Of course: to a small extent there is already an overlap, and the courts will never be free of the general charge of politicisation.

(And the courts already recognise the attorney-general – an office held by a politician – as having a special status as custodian of the public interest in certain proceedings, though attorneys-general will not bring proceedings against their own government.)

As the judge correctly observed in the judgment last week:

“No doubt, the addition of politicians as parties may raise the profile of the litigation.

‘It may make it easier to raise funds.

‘But these are not proper reasons for adding parties.

‘In a case where there is already a claimant with standing, the addition of politicians as claimants may leave the public with the impression that the proceedings are an attempt to advance a political cause, when in fact their sole legitimate function is to determine an arguable allegation of unlawful conduct.’

One hopes that the fashion of adding (no doubt well-meaning) politicians as, in effect, ornamental claimants in public law claims will now come to an end.

If a non-partisan organisation has standing to bring a claim in the public interest then no politician is needed, and if there is no such organisation than a partisan politician is not a good substitute.

*

In the case last week, a large portion of the judgment was devoted to the issue of standing.

One can understand why the government wanted to object to the notion that anyone has standing to go to court to in respect of unlawful conduct by the government.

And more widely, the government and its political and media supporters are constantly seeking to narrow the practical availability of judicial review.

That organisations (such as the first claimant in last week’s case) are accorded standing in public interest cases is a boon for accountability and transparency.

But ‘add me as well’ lists of ornamental claimants savour of gesturing and gimmickry. 

A pleading is not – and should not be – a round-robin.

If members of parliament want to add their names to something then parliamentary motions and other Westminster devices are available.

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The real significance of the government’s defeat over transparency in public procurement – yes, the claimants overstated their case, but reaction of the government was extraordinary

22nd February 2021

 

Last week the high court held that the government of the United Kingdom had acted unlawfully in respect of certain contracts awarded during the pandemic.

The judgment is here.

In particular, the high court held that there had been a failure by the government to publish contract award notices within the appropriate time.

It is a significant case – even though the government sought to brush off the claim as ‘academic’.

And the significance of the case is also not quite what the claimants initially made it out to be when making the claim, and the claimants lost on their more eye-catching assertions.

In particular, the claimants failed to show there was a ‘systematic’ policy put in place of widespread non-compliance with the publication obligations, and nor did the claimants show that there was a deliberate policy to ‘de-prioritise’ compliance. 

They – and you – may believe that to be the case – but they could not show this to the court.

All the claimants could demonstrate to the court was that there was non-compliance by the government with the mandatory deadlines – which the government could not and did not deny.

(The government asserted that they were only ‘technical breaches’.)

In respect of this undeniable (and not denied) non-compliance, it was a difficult case for the claimants to lose in the event that it proceeded to a court hearing.

The legal equivalent of a good shot on goal.

And as the case did proceed to a court hearing, the claimants won on the issue of non-compliance – though they did not get the remedy they primarily wanted (and almost did not get a remedy at all).

The curious thing is not so much why the claimants won – there had been a breach that could not be denied – but why the government resisted the claim all the way to the high court (spending over two hundred thousand pound in legal fees).

Had the government simply admitted the breaches – but denied that the breaches were the result of any systemic and deliberate policy – and undertaken to publish the notices as soon as possible, then it would have been highly unlikely that the claim would have proceeded to a full hearing.

But the government did not, and so the claim did.

Something rather strange has gone on.

*

In this post I now set out the elements of the case, as can be identified from the content of the judgment.

I will then set out what the case was – and was not – about.

But before we get to the judgment, we need to first understand the purpose of the contract award notices and why it matters that they were not published in time.

*

‘Public procurement’ is the term used to describe the purchase by public authorities of goods and services from the private sector.

For various reasons, public procurement is subject to special legal rules that are in addition to (and sometimes qualify) the general law of contract.

In essence, the special laws of public procurement are about procedure: that is, what a public body has to do (and cannot do) when going about awarding a ‘public contract’.

And if that public body does not comply with those legal rules then a court can determine that it has acted unlawfully.

What then happens depends on the nature of the breach and the practical use of any remedy.

A court may compensate a wronged bidder for a contract, or it can issue a mandatory order that a public body do something (or not do something) in particular.

Or a court may just declare the correct legal position.

Or if there is nothing to be done, then a court may do nothing at all.

(For more on what it means, and what it does not mean, for a court to hold that a public body has acted unlawfully, see my post yesterday.)

*

One of the reasons there is a special legal regime for public procurements is the need for transparency.

Transparency is a fundamental principle in the law of public procurement.

All sorts of things need to be published by public authorities (and some public utilities) when purchasing goods and services that would not need to be published by a private corporations making similar transactions.

In routine public procurement the principle of transparency is met by the publication, for example, of specifications and contract values, and of details of the procurement exercises to be followed and of the criteria to be applied.

Thousands and thousands of pages of this dry information are published every day: the dullest legal prose on the planet outside of a tax code or a trade agreement schedule.

Dull – but necessary and a public good.

And one of the things that should be published are contract award notices.

*

A contract award notice is not, itself, legally that significant.

The parties to the tender exercise – the winners and (any) losers – will already have been notified of the contract award – and an aggrieved loser can bring a challenge if it acts promptly.

The purpose of the contact award notice is not for the benefit of the bidders and does not trigger or limit their rights.

The purpose of the contract award notice is for the benefit of the public

Contract award notices tell us which contracts have been awarded and for how much and so on.

Contract award notices also will alert investigatory bodies such as the National Audit Office to possible problems.

The alternative to a contract award notice is that nobody outside the government and any bidders would ever know what contracts had been awarded.

And so although contract award notices may not be legally that important – in that they do not trigger rights and so on – they are politically important.

Contract award notices are part of the tribute that public procurement pays to the principle of transparency.

And the need for transparency in the award of public contracts is a fundamental reason why we have special rules for public procurement in the first place.

*

This need for the publication of contract award notices is all the more important when there has not been any advertisement or other publicity for the award of high-value contracts.

For in an emergency a public authority can dispense with a formal procurement process.

This is provided for in the United Kingdom by regulation 32 of the Public Contracts Regulations 2015:

The government has relied on this regulation 32(2)(c) exemption for a high number of pandemic-related contracts.

Few sensible people would object – as such emergency provisions exist for emergencies, and this was an emergency.

The flexibility is built into the system.

But.

Although the need for prior publications can be relaxed under regulation 32, this does not mean that the need for subsequent publication is relaxed too.

Indeed, such notices become crucial, so that the public may know what is (and is not) being done.

*

Contract award notices are provided for under regulation 50 of the Public Contracts Regulations.

You will see that the regulation is one of a number of provisions dealing with transparency:

The relevant part of the regulation is regulation 50(1):There are some exceptions to this thirty day publication obligation (for example, national security) – but the government did not seek to rely on those exceptions in the coronavirus procurements.

So although regulation 32 allowed the government to dispense with prior publication about public contract the government still had to comply with the regulation 50 obligation once the contracts had been awarded.

And in a substantial number of instances, the government did not do so.

*

The judgment sets out the extent of the government’s failure to publish contract award notices in accordance with regulation 50:Note that this was set out in the government’s own witness statement.

(The mentions to the ‘policy’ are to a formal government policy on publications that was also breached – but for the purposes of this post, the policy adds nothing.)

Given that there was a legal rule that applied, and given that the government did not comply with it, then the only result is to conclude that the government had acted unlawfully.

There was no other outcome available to a competent court.

The wider (wilder?) claims of the claimants were found wanting: no probative evidence was before the court on this non-compliance being directed and cynical.

Of course, one may have suspicions and may regard those taking the government’s version of events at face value as naive.

But suspicions are not evidence, let alone proof, and the claimants’ assertion that the policy of delayed publication was part of a deliberate system fell flat in the (virtual) court room.

*

What also did not get traction was the claimants’ demand for a mandatory order – an order of the court to the government to comply with regulation 50 under pain of contempt of court.

And the reason why such an order was not made was because it was, by the time of the hearing, unnecessary.

The government had published the notices, although out of time.

Perhaps this late activity was because of this litigation.

Perhaps it was because, as the government’s evidence detailed, there were now more resources in place for such tasks.

But whatever the explanation: there was nothing left for a mandatory order to do – and so such an order was not made.

All that the court could do positively was to exercise its discretion to make a declaration that the law had been broken – and that is what the court did, though refusing to use words like ‘systemic’ as requested by the claimants.

But any declaration by a court is discretionary and it may well not have been made.

*

So this is case about non-compliance with a statutory deadline, which the government did not deny, and that had been remedied by the time of the hearing of the court.

And once at court, not a difficult case for the claimants to win.

So – and this is the curious question – why did this case ever get to court?

Why?

Here paragraph 153 of the judgment is fascinating.

(It is too long to screengrab or quote here – so click and read it here.)

For although the claimants undoubtedly overstated their case, the government’s reaction was extraordinary.

The government sought to claim that there was a special species of ‘technical breaches’ that were not really legal breaches at all.

The government also resisted until the very last moment any admissions as to what had happened.

The claimants may have had a free run at goal – but the government managed to intervene and score an own goal anyway.

If Alan Hansen were a legal commentator, one could imagine him wincing at almost every sub-paragraph of paragraph 153 of the judgment.

What on Earth was happening?

One can be fairly sure the fault is not with the government lawyers – their internal advice would have been much as I have averred above – to acknowledge a problem and to undertake to put it right.

(And the judge himself in this case was an experienced barrister in such public law matters – that is how he can set out the details in paragraph 153 in such a – well – systemic way.)

Someone in government insisted that this case went all the way to court – at the cost of over two hundred thousand pounds.

There may not have been a deliberate policy of delaying contract award notices – but there seems there was a deliberate decision to delay admitting that there had been legal breaches.

The claimants deserve some criticism for overstating their case without direct evidence.

Yet that overstatement is as nothing to the remarkable decision by the government to defend the legally indefensible at every step up to a high court hearing.

Perhaps this was a strategic decision by the government, in view of the other cases brought to challenge particular public procurement decisions, as opposed to this general challenge.

The government may well have nothing to hide – but it is certainly conducting its litigation as if it has.

*

The last word will be with the judge, who in paragraph 140 of the judgment summarises the fundamental problem presented by this case (which I have broken into smaller paragraphs for flow):

‘The obligations imposed by reg. 50 and by the Transparency Policy and Principles serve a vital public function and that function was no less important during a pandemic.

‘The Secretary of State spent vast quantities of public money on pandemic-related procurements during 2020.

‘The public were entitled see who this money was going to, what it was being spent on and how the relevant contracts were awarded.

‘This was important not only so that competitors of those awarded contracts could understand whether the obligations owed to them under the PCR 2015 had been breached, but also so that oversight bodies such as the NAO, as well as Parliament and the public, could scrutinise and ask questions about this expenditure. By answering such questions, the Government “builds public trust and public confidence in public services”: see §1 of the Transparency Principles.

‘One unfortunate consequence of non-compliance with the transparency obligations (both for the public and for the Government) is that people can start to harbour suspicions of improper conduct, which may turn out to be unfounded.’

Or they may not be.

And that is why transparency is important.

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