Labour spent “against” accounting officer advice

The new Commons has been presented with a potential government spending
scandal before it has even had the chance to set up a Public Accounts Committee
to investigate and rule on what has happened.

Political protests, from incoming ministers lead by Tory chancellor George
Osborne and Liberal Democrat chief secretary David Laws, over the mess left by
their predecessors, have turned into detailed allegations that senior officials
warned their political masters under Labour against some last minute spending

Permanent secretaries, the accounting officers for their departments, are
claimed to have sought a series of “letters of direction” from ministers
ordering them to authorise spending.

The fact that an accounting officer has requested a letter of direction from
his minister is a serious issue that has to be reported in the department’s
annual report and accounts, and disclosed to the Public Accounts Committee.

It indicates serious disagreement between officials and their political
masters over the propriety of the decision.

The allegation came from the First Division Association, the top mandarins’
trade union, whose general secretary, Jonathan Baum,e revealed on BBC’s 5 Live
that “a number” of the letters were requested in the early months of 2010 and
were an indication of “unhappiness” among senior civil servants.

He said: “When a permanent secretary asks for a letter of direction from the
minister, it is because they feel that a serious decision is being taken which
they feel is not right,” he said.

“It is not a decision taken very often to ask for a letter of direction,
which is why it is regarded as something of a nuclear option. When it happens it
tends to be a big spending decision where the civil service believes this is not
the right thing to do.”

He said the fact that a number had been requested “does indicate that there
was some unhappiness about spending decisions being taken.”

His comments followed Laws’ complaint: “I think we’re very concerned indeed
that over the last few months of this government there were a lot of spending
commitments that were made and some of those may not represent good value for
money… In some cases the decisions seem to have been made against accounting
officers’ advice.”

Former chancellor Alistair Darling, who has announced he will quit front line
politics, said: “Every new government tries blaming the last one. This just
shows the old politics is alive and well with the Lib-Con coalition.”

No details are yet available as to which spending decisions are involved, but
they are understood to revolve particularly around defence contracts,
consultancies and procurement decisions, one of which may have been the decision
to start “cutting steel” for the two new super-aircraft carriers being built for
the Royal Navy, largely in areas where Labour constituencies would benefit, such
as Rosyth Dockyard neighboring former Prime Minister Gordon Brown’s seat of
Kirkcaldy and Cowdenbeath.

Tory insistence that these should be subject to the coming defence review
were an issue in the general election.

Others may include a £13bn MoD contract for tanker aircraft, £240m of school
building contracts, difficulties at the Student Loans Company, and a £600m
computer project for the new personal pensions scheme.

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