A National Audit Office report yesterday shows that the Post Office is not the only arm’s length body to act as if answerable to nobody. Whitehall is supposed to oversee more than 450 arm’s length bodies that spend at least £250bn a year. But it’s a broken system.
On Monday, Radio 4 begins a 10-part series that asks whether hundreds of sub-postmasters were victims of “institutionalised corporate cruelty from the Post Office”.
The BBC describes its series “Great Post Office Trial” as the extraordinary story of a decade-long battle fought between sub-postmasters and the Post Office.
After the introduction of Fujitsu’s Horizon branch accounting system in the early 2000s, the Post Office began using the system’s data to accuse sub postmasters of falsifying accounts and stealing money.
Village sub-postmasters who were doing their best to serve their local communities were fired, financially ruined, prosecuted and imprisoned – all of which raises questions as to why none of this was of any concern to the civil service which was supposed to be keeping an eye on the Post Office, according to civil service guidance unearthed by justice campaigner Eleanor Shaikh.
Last year the High Court issued judgements that criticised the Post Office for acting as if answerable to nobody. The judgements left the Post Office’s credibility in tatters. But still the civil service has continued to distance itself from the Post Office. Officials have written defensive letters to sub-postmasters about the “past” actions of the Post Office. The civil service accepts no responsibility for any failures to stop the scandal.
Now a new National Audit Office report makes clear that another arm’s length body, the British Tourist Authority has, like the Post Office, acted as if answerable to nobody. Gareth Davies, head of the National Audit Office, said the British Tourist Authority “repeatedly broke the regulations” – despite several internal audit reports that highlighted irregularities. He said,
“The British Tourist Authority has knowingly entered into contracts for which it did not have approval, disregarding regulations designed to ensure that public money is being spent as Parliament intended.”
The National Audit Office also found that irregular, non-contractual severance payments went ahead without the approval beforehand of its sponsoring organisation, the Department for Culture, Media and Sports or HM Treasury.
Such actions can open the door to fraud and corruption if allowed to go unchecked.
If the Post Office and British Tourist Authority have been able to conduct themselves as if answerable to nobody, who cares? It’s not a frivolous question.
Civil servants are supposed to check up on arm’s length bodies such as the Post Office and the British Tourist Authority. But it’s clear the system of oversight is broken.
Campaigner Eleanor Shaikh found that the Department for Business, Energy and Industrial Strategy (BEIS) chose to rescind its duty of oversight during the years of the Post Office Horizon scandal.
Parliament’s Public Accounts Committee reported in 2016 on problems for Whitehall departments of overseeing more than 450 arm’s length bodies that spend more than £250bn a year.
But it’s not just arm’s length bodies that fall through the accountability net. The civil service itself is largely unaccountable. MP Margaret Hodge, former chair of the Public Accounts Committee, wrote an excellent book “Called to account“ which showed, among much else, how some senior civil servants have little regard for accountability to Parliament.
If the civil service acts as if unanswerable to Parliament and potentially hundreds of arm’s length bodies act as if unanswerable to the civil service, it could explain how the Post Office has never been held to account for a scandal that dates back nearly 20 years.
No wonder hundreds of arm’s length bodies have sprung into existence as if from nowhere. Being an arm’s length body means even less scrutiny than being a direct part of the Whitehall system.
The unchecked conduct of the Post Office and British Tourist Authority are signs of a mature democracy that has grown tired and flabby.
It helps to explain why the Post Office was able to conduct itself in ways that would not have been out of place in North Korea or China. Why would the civil service want the unpleasantness of properly scrutinising the Post Office and other arm’s length bodies if senior civil servants are themselves unaccountable?
MPs and peers care about accountability. But how can they hold to account a civil service that doesn’t want to be held accountable?
Every new government needs the full support of the civil service. Therefore it’s hard to see how the broken system of accountability will ever be fixed.
The Great Post Office Trial – BBC series starting Monday at 13.45