Osborne, Blackrock, Defence Procurement & Worrying Conflicts of Interest

Talk off the record to senior defence procurement people, and many will express concern about the revolving door from the public sector into supply-side industry. That applies at all levels from junior management through to the top officials and military folk and even Ministers (or ex-Ministers).

It is not so much the chance for outright fraud or corruption, but more that separation between buyer and seller is necessary if, for instance, contract managers are really going to hold a supplier to account during the contract delivery period. If someone – whether commercial manager, uniformed military man or junior minister is thinking “I might get a job on twice my current salary from BAE Systems / whoever when I leave this place”, then that we would suggest those thoughts almost inevitably change their approach to the supplier, and not in a good way for the public purse.

The same sort of issue in a somewhat different guise applies in cases such as the HS2 row that has brewed up over the role of CH2M in providing so many staff to the programme (including the last two CEOs) and also winning a considerable amount of work on the programme. Conflict of interest is a tricky but vitally important issue.

But that’s not our main topic today. Rather, it is George Osborne that is disturbing us. We’re amazed there hasn’t been more of an outcry about his work with Blackrock Investments, for which he is earning  £650,000 a year for 4 days a month work. That’s £13,500 a day.

It just demonstrates the ridiculous sums of money swilling around still in the financial services industry. But our bigger concern is over what we might call those implied historic conflicts of interest – and what it might mean to the way other politicians and executives think now and in the future.

Osborne took decisions during his 6 years as Chancellor (finance minister) that without a doubt had an impact on the financial services industry, from taxation through to issues such as the sale or securitisation of the UK’s student debt (according to the Times this week, Blackrock may be bidding for that shortly).

Now we’re  not suggesting Osborne did anything directly because he knew he was going to join Blackrock for bags of gold at some future point. But … did it perhaps occur to him that he might not want to upset the financial services industry too much? That might prove to be his fall-back home if his political career came to a sudden and inglorious end (as it did). Because even if it was just a passing thought, it has implications for the probity of public life, just like that contract manager who thinks “I won’t impose that penalty for missing a deadline on our supplier - you never know …”

It’s time we had much stricter rules about employment of politicians and ex politicians - and indeed the same applies to public servants. It is pretty clear that ACOBA is a useless sham, purely in place to make those not inside the system think that there are rules. That committee originally said it had ‘no concerns’ about Osborne’s job because he had made no policy decisions relating to Blackrock. It then had to correct its letter, because he so obviously had! Pathetic.

Why do I feel so strongly about this? Because we often forget how lucky those of us in the UK are to live in a country where corruption is not a huge problem. The UK is joint 10th in the Transparency International 2016 Index. But that can change, and remember, “the only thing necessary for the triumph of evil is that good men* do nothing”.

We will see what comes out of that HS2 / CH2M situation. MOD and others should tighten up on employment of ex-civil servants - DWP top managers jumping straight into Work Programme providers always worried me too. ACOBA should be scrapped and replaced with something that works. And George Osborne should not be allowed to work for Blackrock, for a reasonable period of time at least.

* and women

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First Voice

  1. Paul wright:

    Perhaps these potential conflicts could be investigated by the Evening Standard?

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