Jim has reported on the cool response from ministers to Sir Gus O’Donnell’s unsolicited paper on contingency measures if the economy takes a turn for the worse.
But O’Donnell is not the only Whitehall knight taking a hit today from MPs.
Sir Bill Jeffrey, who was until recently Britain’s most senior defence official, has also been ticked off over his handling of the aircraft carrier decision.
The Public Accounts Committee takes the highly unusual step of criticising him by name for failing to request a “letter of instruction” from his minister before signing the “unaffordable” aircraft carrier contract.
They conclude he did not “discharge his responsibility” as accounting officer. In plain language, it means he failed in his duty to protect value for money.
These “letters of instruction” are the nuclear option in the Whitehall mandarins’ armoury, to be deployed when ministers are pressing for a decision that would waste money or carried big financial risks. It is the point when the mandarin says: ‘Minister, if you want to press ahead against the advice of the department, you’ll have to put that in writing’.
The carrier decision is a perfect example of when it should be used. Through 2007 and 2008 decisions were taken to:
1. Buy two new carriers when the department had not identified the funds to pay for them
2. Sign contracts to cut steel, only to delay the order six months later. That decision alone cost the taxpayer more than £1bn
Jeffrey’s explanation is that he warned ministers explicitly that the carriers were unaffordable. He thought that formal advice was enough. Still, with hindsight, he probably now realises that requesting a letter would have focussed minds a bit more.
That said, this criticism should not obscure ultimate responsibility. John Hutton was defence secretary when the £1bn decision was taken to delay the project.