Whitehall

Tom Burgis

Welcome to our live coverage of Paul Tucker’s testimony to MPs probing the Libor scandal. The deputy governor of the Bank of England faces questions about his actions at the height of the financial crisis. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents. All times are London time.

19.00 That’s that for our live blog. There are three main points from Tucker’s testimony.

  1. Did Labour ministers lean on him to get banks to lower Libor in the middle of the financial Crisis, as alleged by George Osborne? “Absolutely not.”
  2. Was Libor considered an ideal measure of interbank lending, even before the rigging revelations? Nope.
  3. Is the FSA board engaged in contingency plans should Libor collapse? Yes.

Thanks for reading. See FT.com through the evening for anaylsis of Tucker’s words. Tomorrow its the turn before the committee of Marcus Agius, Barclays’ outgoing chairman. Read more

Reforming schools funding was always going to be a test of strength for Michael Gove. If today’s interview on Andrew Marr is any clue, then he’s thrown in the towel in the first round. After months of preparing plans to bypass local authorities and fund all schools directly from Whitehall, he is now claiming that the plan was always to fund through local authorities. Here’s what he said about the story:

“The Financial Times ran a report of what they thought was going to be in the white paper, fair play to them, journalists often anticipate events, but the truth is that we will be funding schools through local authorities as we do at the moment.”

Ministers can often make claims like this when stories are based on briefings from their aides and officials. Conversations are deniable. But the FT’s story was not only confirmed by the officials we spoke to. It was in a draft White Paper that we were reading back to the department. It was supported by conversations we’d had with people who had been briefed on the consequences of the changes. None of the factual elements of the piece were disputed by education officials in the week after publication.

Of course there are caveats in any such story. There was a consultation planned and a final decision was to be taken early next year. No journalist can discount the possibility that a minister will buckle at the first smell of grapeshot. But one thing is clear. Directly funding schools was Gove’s preferred model a fortnight ago, before he was overwhelmed with fierce complaints from councillors.

Just to put the record straight, we thought it might be worthwhile to publish some extra extracts of the White Paper.

1. The explanation of what is wrong with the system: Read more

David Cameron aimed a broadside at the Ministry of Defence today (and by proxy at Liam Fox).

“That department does seem to have had a bit of problem for leaks which is worrying when that department is responsible for security.”

On one level this is fair enough. Leaks are extremely unsettling for ministers and senior officials.

But at the MoD, the problem hasn’t been leaks. It has been a willingness to cover up uncomfortable truths. How else did it end up with a black hole of £36bn? Some more transparency — whether authorised or not — would only have been beneficial.

The coalition certainly believes this in principle. But when transparency makes life difficult for them rather than Labour, they struggle.

Take James Kirkup’s excellent scoop today. Fox’s reaction was to say that it was written by a “junior official” and that it had not “been authorised, requested or seen by an MoD minister”.

Which begs the question, why not? Why didn’t ministers see this well argued, plainly written and insightful critique of the most important defence review since the Cold War? Read more

Jim Pickard

When George Oborne addressed the cabinet this morning his message was the usual one about trying to make the cuts as fair as possible and to “fall on the broadest shoulders”. The chancellor admitted that this was an “anxious time for some in the public sector” who could now lose their jobs.

Lord Adonis meanwhile claims in this morning’s FT that “Whitehall is stunned and morale risks plummeting” as the cuts reality dawns. This chimes with what I’m told by several civil servants who read this blog.

Many departments are already going through a redundancy process – instigated in June – even before the new £83bn wave of cuts which will see an estimated half a million public sector jobs go.

I am told of one leaving party for BIS staff, held in a local pub, which attracted three or four hundred attendees. The atmosphere was utterly morose. Meanwhile some civil servants are receiving letters giving them only a week to decide whether or not they want to leave. As for those who are quitting, there are rumours that they may not be paid their redundancy payments until the end of November – a six week gap. “It feels really chaotic,” one tells me. Yet this is only a foretaste of the cuts to come. Read more

Jim Pickard

I am told by a reliable source that ministers have struck a deal with five out of the six civil service unions over the civil service compensation scheme. (The PCS* are apparently still holding out but its national executive is meeting this afternoon to discuss the offer). An announcement is expected as early as today.The deal could pave the way for the coalition to cut redundancy terms for civil servants and lay off up to 100,000 jobs out of the 500,000 covered by the scheme.

Francis Maude, cabinet office minister, is currently legislating for the new arrangements via a parliamentary bill which has its third reading next week. He has wanted to reduce the cost of making civil servants redundant by about two-thirds, claiming the current scheme is “way out of kilter” with the private sector. Read more

Jim Pickard

It was announced during the summer that the culture department (DCMS) will be slimmed down and moved to another building in Whitehall, vacating its existing premises at Cockspur Street, just off Trafalgar Square.

Progress is going well, we are told. One option is to move into the spare space at the Treasury, where George Osborne is getting staff to sit closer together at smaller desks to free up almost an entire floor. It’s not clear whether the culture officials would relish the prospect of sitting next to the financial disciplinarians from the Treasury, however. Read more

The search is finally over. I’ve heard that Ursula Brennan will be promoted to become the most senior civilian official at the Ministry of Defence — taking over what is arguably the most rum job in Whitehall.

It is always good to see more women at the top of the civil service, which is still far too dominated by men. Brennan has shown herself to be a dab hand as deputy permanent secretary at the MoD, keeping a cool head in what can be a maddening institution to work in.

There will also be some relief that there is a degree of continuity at the top of the MoD. After all, as well as Brennan’s appointment as permanent secretary, there is a relatively new government, a new chief of defence staff, and a new head of procurement (which still hasn’t been announced in spite of a six month search).

But those wanting to see new blood brought in to this infamously dysfunctional department will be a touch disappointed. Read more

As my last post suggested, we’re entering times of fear and loathing in Whitehall.

There is a lot of animosity growing over the way mid-level officials are handing this spending round. Read more

Picture editors always struggle to illustrate stories about Whitehall.

The Times did a decent job this morning with this shot of some bureaucratic types strolling past a Whitehall street-sign. The caption says “thousands of civil servants” may be losing their jobs. Read more

Jim Pickard

It was Ed Miliband who called for all workers to have the right to flexible working earlier in the week – in a speech that pointed out that GDP isn’t the be all and end all of everything. (At present only carers and parents can do so automaticallyRead more

Jim Pickard

When the coalition on May 12 pushed out its announcement for which MPs would take up ministerial roles there was a noticable delay when it came to Defra posts. I can reveal that David Cameron did intend a significant reshuffling between that department and DECC.

The idea was to add “environment” to DECC (creating DEECC, perhaps), beefing up the department controlled by Chris Huhne. I’m told that the documentation was all written and ready to send out. Several responsibilities would have been shorn from Defra, including the entire Environment Agency. Something that day made the new prime minister change his mind. Read more

Sorry to disappoint, but the answer is probably no.**

Using the Coin database, The Guardian spotted a spike in government spending in March and April, which quickly prompted speculation that Labour (and Whitehall) threw money around before the change of government. Read more