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Why is the National Audit Office chairman defying his own code of conduct?

18 December 2015

5:53 PM

18 December 2015

5:53 PM

Everybody skims over a document at some point: when you’re asked to agree to terms and conditions before accessing wifi, you don’t always look too carefully at the details. But you might hope that the officers of the National Audit Office would be more scrupulous. The NAO – which scrutinises £1 trillion of public spending and revenue – has massive and unique powers. At Wednesday’s PMQs, for instance, Jeremy Corbyn based his claims on a new NAO report into NHS funding.

With this level of influence, it has to be whiter than white. For that reason – and in the wake of the NAO’s then-head running into some trouble over his substantial travel expenses in 2007 – the NAO issued in 2012 a strict Code of Conduct, which states:

staff in the grade of Audit Manager/Band 1 and above may not engage in national political activities of any nature.

The Code is severe enough that it has to spell out that staff can, under the right circumstances, be school governors. It makes very clear that there should be a ten-foot wall between the NAO and political activity.

So what on earth was Lord Bichard, the Chair of the NAO, doing by leading a campaign to oppose the government on the Bank of England and Financial Services Bill? He has been tabling an amendment, which would give the Bank slightly less power to dispute the NAO’s findings. Whether he’s right or wrong to do so is a separate matter: he should not be interfering in such issues in the first place. As strictly laid out by the code that he’s paid to uphold.

His actions might have gone unnoticed but for last week’s meeting of the Public Accounts Commission, who scrutinise the scrutinisers. In an awkward encounter akin to a slo-mo Paxman interview, the Commission’s Andrew Tyrie repeatedly asked the NAO’s senior officers whether they had breached the Code. The Auditor General, Sir Amyas Morse, and the NAO’s Chair, Lord Bichard, seemed unsure of what exactly their responsibilities might be.

Although Bichard decided not to speak in support of his amendment, after being advised that he might contravene a different point of parliamentary procedure called the Addison Rules, he told Tyrie he did not consult the Code of Conduct:

TYRIE: Do you accept that tabling an amendment to a major bill is a political activity if it concerns the NAO? Do you think that is a political activity, Lord Bichard?

BICHARD: Well, I think it depends how you define ‘political’. I’m not a politician, I’m a cross-bencher…

TYRIE: But you’re the Chairman, and the Chairman’s job is to identify and distinguish between what is political and what is not, is it not? Are you not the guardian of this Code of Conduct?

BICHARD: Sorry, which code of conduct are you now referring to? The Addison Rules or the –

TYRIE: The NAO Code of Conduct.

BICHARD: Yes. No, I did not regard it as a political act. I felt that it was necessary to defend the independence of the NAO, and that as Chairman it was important for me to do that.

TYRIE: Have you had a good look at the Code of Conduct?

BICHARD: The NAO Code of Conduct?


BICHARD: Probably not since I was appointed.

TYRIE: OK. Do you consider yourself bound by it?

BICHARD: I do, yes.

Before moving the amendment, Bichard had discussed it with the Auditor General, Sir Amyas Morse. Morse conceded to Tyrie: ‘Did I stop and look at the Code of Conduct of the NAO? No.’

The Chairman of the Public Accounts Commission, Sir Edward Leigh, told Bichard that if the NAO had concerns about legislation in future, ‘I think your responsibility is to come to us first, and work through us’ – not least because matters of financial scrutiny are the province of the Commons, not the Lords.

So how exactly does the NAO justify this? I asked. It replied in a statement: ‘The Code of Conduct is designed to protect the Comptroller & Auditor General’s independence, and Lord Bichard’s actions were entirely in keeping with this. He has not breached our Code of Conduct.’

But if tabling an amendment to government legislation doesn’t come under the heading ‘national political activities of any nature’, you wonder what does.

This matters because the NAO is supposed to look out for the interests of the taxpayer – not for the interests of the NAO.  All told, it’s rather disappointing that the Public Accounts Commission didn’t kick up more of a fuss over this fairly basic point.

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