UK Treasury failed to tell watchdog about senior official’s Labour donation

LONDON — The U.K. civil service watchdog was not told of a senior official’s previous donations to the Labour Party when it approved his appointment to a top Treasury role.

Ian Corfield, a former banker who was a senior business adviser to the party in opposition, donated more than £20,000 to Labour politicians including the now-Chancellor Rachel Reeves in the run up to the general election in July.

POLITICO first reported he had been appointed as a director of investment at the Treasury, a post usually reserved for career civil servants. While his precise renumeration is not public, similar government roles pay up to £162,500.

Civil servants in the U.K. must adhere to strict impartiality rules to prevent any perception of conflict of interest of bias.

Most roles in the civil service are required to be filled through “fair and open competition,” although departments can apply for an exemption for top roles with approval from the Civil Service Commission (CSC) regulator.

These exemptions are often reserved for recruiting candidates with external skills that cannot be found among its current pool of staff, such as staff hired for the Covid 19 Test and Trace scheme.

Corfield’s appointment was given the green light by the commission under these rules, but two individuals familiar with the process, granted anonymity to discuss matters they were not authorized to share publicly, have confirmed to POLITICO that the regulator was not told about his prior donations ahead of its decision.

Green light

The CSC stressed that the responsibility for carrying out background checks on potential top civil servants such as Corfield lies with the department which hires them.

The Treasury refused to confirm whether the donations were declared to James Bowler, the most senior civil servant in the department who is responsible for propriety.

A CSC spokesperson said: “The Commission’s role is to independently consider the department’s request under its principles. Due diligence on candidates is a matter for the employing department.”

They added that all government officials are bound by the civil service code, and that if colleagues have concerns they can raise them with the department and the commission.

Shortly after being approached for comment by POLITICO, Kate Owen, interim chief executive of the CSC, published an extensive blog post setting out how government departments, rather than the commission, are responsible for vetting candidates.

Britain’s Chancellor Rachel Reeves speaks during a press conference at the Treasury in central London on July 29, 2024. | Lucy North/AFP via Getty Images

She wrote: “The department — as the employer — is responsible for carrying out background checks on individuals who may be appointed by exception. The department is also responsible for addressing any potential propriety matters.”

Cleaning up their act

Oliver Newton, who ran Reeves’ business engagement operations while in opposition, has also been appointed as her head of business engagement at the Treasury.

It comes after the finance department set up a new team to engage with City firms in a bid to meet Labour’s pledges on growth in partnership with business.

The Treasury refused to give any details about Newton’s employment situation.

Jack Worlidge, a senior researcher at the Institute for Government think tank, said the case “exposes clear gaps in the rules.”

“The Commission’s recruitment principles are silent on the use of the exceptions process to appoint politically aligned candidates, as well as on the involvement of ministers in exceptional appointments,” he went on. “The Commission also plays no role in considering the propriety of appointments.

“During the election campaign Labour repeatedly emphasized its credentials around propriety and ethics. It will be interesting to see if the new Ethics and Integrity Commission closes some of these gaps.”

Worlidge added: “The rules don’t explicitly prohibit bringing in politically aligned individuals. But if someone is being brought in for political expertise, they should be appointed as a SpAd [special advisor.]

“Exceptions to the recruitment principles are for exceptional cases and can be a useful way of bringing in external talent. But failing to run a fair and open competition comes with challenges — including for the individual appointed — and is a route that should only be used rarely.”

A government spokesperson said: “As you would expect, we do not comment on individual staffing appointments.

“Any appointments are made in line with the civil service rules on recruitment.”