Public appointments

70 Pages·2011·0.87 MB·English

House of Commons
Public Administration Select
Committee
Public appointments:
regulation, recruitment
and pay
Fourteenth Report of
Session 2010–12
Report and Appendices, together with formal
minutes and oral evidence
Ordered by the House of Commons
to be printed 11 October 2011

HC 1389
Published on 19 October 2011
by authority of the House of Commons
London: The Stationery Office Limited
£13.50
The Public Administration Select Committee
The Public Administration Select Committee is appointed by the House of
Commons to examine the reports of the Parliamentary Commissioner for
Administration and the Health Service Commissioner for England, which are laid
before this House, and matters in connection therewith, and to consider matters
relating to the quality and standards of administration provided by civil service
departments, and other matters relating to the civil service.
Current membership
Mr Bernard Jenkin MP (Conservative, Harwich and North Essex) (Chair)
Nick de Bois MP (Conservative, Enfield North)
Alun Cairns MP (Conservative, Vale of Glamorgan)
Michael Dugher MP (Labour, Barnsley East)
Charlie Elphicke MP (Conservative, Dover)
Paul Flynn MP (Labour, Newport West)
Robert Halfon MP (Conservative, Harlow)
David Heyes MP (Labour, Ashton under Lyne)
Kelvin Hopkins MP (Labour, Luton North)
Greg Mulholland MP (Liberal Democrat, Leeds North West)
Lindsay Roy MP (Labour, Glenrothes)
Powers
The powers of the Committee are set out in House of Commons Standing
Orders, principally in SO No 146. These are available on the Internet via
www.parliament.uk
Publications
The Reports and evidence of the Committee are published by The Stationery
Office by Order of the House. All publications of the Committee (including press
notices) are on the Internet at http://www.parliament.uk/pasc.
Committee staff
The current staff of the Committee are Martyn Atkins (Clerk), Charlotte Pochin
(Second Clerk), Alexandra Meakin (Committee Specialist), Paul Simpkin (Senior
Committee Assistant) and Su Panchanathan (Committee Assistant).
Contacts
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Administration Select Committee, Committee Office, First Floor, 7 Millbank,
House of Commons, London SW1P 3JA. The telephone number for general
enquiries is 020 7219 5730; the Committee’s email address is
[email protected].
Public appointments: regulation, recruitment and pay 1
Contents
Report
Page
Summary 3 
1  Introduction 5 
2  Review of public appointments regulation: the OCPA consultation 6 
The purpose of the OCPA review and consultation 6 
Regulation of public appointments: a new approach 6 
The draft Code for public appointments 7 
Independent assurance 9 
Compliance and audit, reporting and transparency 10 
Diversity 12 
Appraisals of appointees 13 
Conclusion 14 
3  Government use of recruitment consultants 15 
A Centre of Excellence for public appointments recruitment 15 
Recruitment consultants and public appointments 16 
Changes to central HR management in Government 17 
4  Benchmarking remuneration for public appointees 19 
Government policy on benchmarking public appointee pay 19 
Hutton Review of Fair Pay in the Public Sector 20 
Conclusions and recommendations 23 
Appendix 1: Letter from the Chancellor of the Exchequer to the Chairman of
PASC dated 20 July 2011 26 
Appendix 2: Correspondence between the Chairman and the Minister for the
Cabinet Office on pay restraint 27 

Formal Minutes 30 
Witnesses 31 
List of Reports from the Committee during the current Parliament 32

Public appointments: regulation, recruitment and pay 3
Summary
On 28 June 2011 the Commissioner for Public Appointments, Sir David Normington,
published a consultation paper setting out his proposals for reforming the regulation of
public appointments. This report forms the Committee’s response to the consultation
exercise and examines further issues relating to the recruitment and pay of public
appointees.
The Committee endorses Sir David’s general approach to reform of the system for public
appointments, and agrees with the overall aim he has established for the public
appointments system, namely to ensure appointment of the best candidates from a strong
and diverse field.
We welcome the proposal to streamline the existing Code for Public Appointments and to
adopt a lighter touch in regulating public appointments processes. We also welcome in
principle the proposal to reduce the number of independent assessors and to give such
assessors a role in chairing selection panels for chairs of public bodies. We recommend that
greater consideration be given to the role to be taken by such assessors when chairing
panels, how an independent assessor in the chair of a panel can effectively ensure challenge
in the selection process while also undertaking the traditional role of referee, and how the
expertise of such assessors is to be developed.
The proposal to amend the present arrangements for Departmental audit and reporting of
public appointments in favour of a ‘comply and explain’ approach focused on building
capacity and encouraging best practice in Departmental public appointments is endorsed.
The Committee particularly welcomes Sir David’s commitment to broadening genuine
diversity in public appointments, and his proposals to undertake a baseline survey to
measure the progress made in facilitating appointments on merit of talented individuals
from as wide a range of backgrounds as possible.
We recommend that the Commissioner be given a remit to review existing Departmental
appraisal systems of the performance of public appointees, to ensure that
underperformance by appointees is consistently addressed and that appointees who are not
up to the mark are not reappointed. Poor performance by public appointees which is not
adequately addressed threatens public confidence in the integrity of the appointments
system.
We support the proposal of the Commissioner to establish a Centre of Excellence for
public appointments, to retain within the Civil Service the expertise required to widen the
pool of candidates applying for vacancies. We urge the Government to take steps to retain
the expertise in this field built up by the Appointments Commission. The use of
recruitment consultants in public appointments should be the exception and not the rule.
Departmental expertise should be increased, and external costs reduced, by building up the
centre of excellence within Whitehall.
4

We are concerned to learn that the post of Director General for Civil Service Capability has
effectively been abolished, with its functions dispersed. We recommend the re-
establishment of the post as a focus for the management and recruitment of senior talent in
the Civil Service and in public appointments.
We urge the Government to publish its response to the report of the Hutton Review of Fair
Pay in the Public Sector as soon as possible, and to give careful consideration to the Hutton
recommendations on the establishment of a framework for senior salaries in public
appointments. While supporting the requirement for restraint on top salaries in the
current climate, we call on the Government to substitute the arbitrary cap on salaries of
senior posts subject to Ministerial appointment, which risks discouraging the recruitment
and retention of the best talent in public appointments, with a proper system to assess the
salaries to be paid for public appointments, as recommended by the report of the Hutton
Review.
Public appointments: regulation, recruitment and pay 5
1 Introduction
1. The establishment of a post of Commissioner for Public Appointments was
recommended by the Committee on Standards in Public Life in its first report in 1995
(the Nolan Report),1 in order to increase public confidence in the public appointments
process and the quality of appointments under it. The Commissioner presently
regulates some 10,000 Ministerial appointments to the boards of a range of public
bodies in England and Wales. The Commissioner also regulates some Ministerial
appointments to the boards of cross-border public bodies in those cases where the
ultimate appointing responsibility rests with Ministers at Westminster. The role of the
Commissioner for Public Appointments is set out in the Public Appointments Order in
Council 2002 and subsequent amendments.
2. Sir David Normington took on the combined post of Commissioner for Public
Appointments and First Civil Service Commissioner on 1 April 2011. He was expressly
asked to review the system for regulation of public appointments.2 On 28 June he
published a consultation paper setting out his proposals for reform of the system.3
3. This report provides the Committee’s response to the consultation. We also take this
opportunity to examine two further issues in the field of public appointments which
have caused us concern: the use of recruitment consultants (‘headhunters’) by
Government departments and the recent practice of the Government in setting levels of
pay for public appointees.
4. The Commissioner appeared before the Committee on 13 July 2011 to explain in
further detail the proposals put forward in his consultation paper. The Committee also
took oral evidence on 6 September 2011 from Mr Will Hutton, Chair of the Hutton
Review of Fair Pay in the Public Sector, representatives of private sector recruiters,
Jonathan Stephens, Permanent Secretary, Department for Culture, Media and Sport
(DCMS), a Government department responsible for a substantial proportion of public
appointments and Andrea Sutcliffe, Chief Executive of the Appointments Commission,
the Department of Health body which presently manages roughly one-third of public
appointments. We are grateful to each of our witnesses for their evidence.

1 Committee on Standards in Public Life, First Report, May 1995
2 Q 2
3 Office of the Commissioner for Public Appointments, Review of Public Appointments Regulation; A Consultation,
June 2011
6

2 Review of public appointments
regulation: the OCPA consultation
The purpose of the OCPA review and consultation
5. At his pre-appointment hearing before this Committee on 16 November 2010 Sir
David explained that he would, as required as a condition of his appointment, be
examining the system of public appointments afresh:
I think the remit is to look again at whether the present public appointments system
is too rule- and process-based and whether some of the things that have happened
with this Civil Service Commissioner, which is to focus on principles rather than
process, can be applied more clearly to the public appointments process.4
6. In the introduction to his proposals the Commissioner said:
The system has moved quite a way from the original ambition of the Committee on
Standards in Public Life (the Nolan Committee) in 1995 that “regulation should be
undertaken with a light touch and without introducing unnecessary bureaucracy”.5
and concluded that
the regulatory system is now ready for a major overhaul to return it to something
clearer and simpler, more risk-based and more focused on the basic job of getting the
best candidates from a strong and diverse field. I also want to ensure that it is clear
that responsibility for meeting the requirements of merit, fairness and openness
rests, as it should, firmly with Government Departments.6
7. We welcome the swift action of the Commissioner for Public Appointments to
review the system of public appointments. We wholeheartedly agree with his overall
vision for the public appointments system, namely to ensure appointment of the
best candidates from a strong and diverse field.
Regulation of public appointments: a new approach
8. Sir David told us precisely why he believed a review of the system for regulating
public appointments was necessary:
The system has got very prescriptive and bureaucratic. There is a lot of focus on
meeting the process and there is not a lot of focus on the outcome. There is also a
sense that so much is prescribed that actually Government Departments are almost

4 Oral evidence taken before the Public Administration Select Committee, 16 November 2010, HC 601-i, Q10
5 Office of the Commissioner for Public Appointments, Review of Public Appointments Regulation: A Consultation,
June 2011, p1
6 Ibid., p 2
Public appointments: regulation, recruitment and pay 7
discouraged from taking responsibility for themselves for improving public
appointments and getting the best outcomes.7
9. Sir David proposes “four basic reforms” to the present public appointments system:
• a “simpler, principles-based Code”
• more proportionate independent assurance
• a reformed compliance and audit process
• improved reporting and transparency
We examine these proposals in turn below.
The draft Code for public appointments
10. The Commissioner presently regulates public appointments by reference to a
detailed Code of Practice8 based on seven ‘Code Principles’ (Ministerial responsibility,
merit, independent scrutiny, equal opportunities, probity, openness and
proportionality). He proposes to replace the current Code of Practice, which is over 100
pages long, with a much simpler code of less than 10 pages, based on three principles:
merit, fairness and openness. The remaining four principles, Sir David explained, were
implicit in the way the Code had been drafted.9
11. Sir David told us that
I am aiming for a simpler system, but in some respects it is intended to be a tougher
one because it will be more visible where Departments are falling short and where
they need to improve. I want Departments and Ministers to be held more publicly to
account – not for getting 120 pages of process right – but for getting the best
outcome. By that, I simply mean getting excellent candidates selected on merit from
a strong and diverse field.10
But he was clear that a slimmed-down Code did not mean wholesale deregulation of the
appointments process. He did not want to reduce the level of regulation to the point
that too much power was returned to Ministers:
I am changing the balance in the regulatory system; I am not pulling out of
regulation of all public appointments and I am not changing at all the proposals for
how Ministers can be involved . . . the system is designed to deliver [to Ministers] a
choice of meritorious candidates and I am not proposing to change that.11

7 Q 2
8 Office of the Commissioner for Public Appointments, Code of Practice for Ministerial Appointments to Public Bodies,
August 2009
9 Q 34
10 Q 2
11 Q 24
8

12. The Commissioner’s draft Code replaces the prescription in the current Code with
principles and ‘essential processes’ which Departments ought to follow in making public
appointments. It makes it clear that Departments take responsibility for compliance
with such principles and processes, and all relevant legislation. The draft Code provides
that ‘processes can and should vary and be proportionate to the nature of the
appointment’.
13. The ‘essential processes’ stipulated are:
• The establishment of a panel to oversee appointments. For chairs of public bodies,
and statutory office holders, the panel chair will be an independent assessor
appointed by the Commissioner. For other board member appointments the panel
will be chaired by an official of the sponsoring Department or the chair of the
relevant body
• Discussion and agreement, with the responsible Minister and other interested
parties, on the selection process and criteria for a successful appointment
• Design of a process to attract a strong and diverse field of candidates, including
those from underrepresented groups
• Inclusion in each panel of a person independent both of the appointing
Department and the body to which the appointment is to be made
• Production of a panel report, signed by the chair, in respect of each appointments
process, setting out the outcome of the process, its conformity with the original
specification and its compliance with the Code of Practice for Public
Appointments
• Request to applicants that they declare any significant political activity undertaken
in the last five years, to be provided to the panel only in respect of those candidates
selected for interview
• Publicising of the appointment, including the publication of the appointee’s
statement of political activity in the last five years.
14. Jonathan Stephens, Permanent Secretary, Department for Culture, Media and Sport
(DCMS), which is responsible for about 100 public appointments each year, was in
favour of Sir David’s proposals:
I think [ . . . ] the new Commissioner is indicating [ . . . ] that he is much more
attracted to a principles and risk-based assurance and audit regime, moving away
from one that sets out a large number of processes and goes through ticking each
individual box, and I strongly support that.12
15. Andrea Sutcliffe, Chief Executive of the Appointments Commission, a Department
of Health body responsible for managing one-third of public appointments, both in the
NHS and other public bodies, also welcomed the proposals for a shorter code:

12 Q 224