Whitehall’s culture of reliance on ‘hired guns’ – specialist interim employees brought in to cover a lack of in-house expertise within departments - must end, an influential parliamentary spending watchdog has demanded.
An investigation by the Public Accounts Committee (PAC) into ‘off-payroll’ arrangements stated more than 2,400 central government contractors were invoicing Whitehall employers using service companies – a practice arousing suspicions of complicity in tax avoidance.
Additionally, the PAC discovered the BBC has around 25,000 off-payroll freelancers on their books, who avoid paying tax at source, 13,000 of whose number include TV and radio broadcasters.
The committee’s inquiry follows the findings of an earlier review by the Treasury into off-payroll arrangements. This in turn was launched in the aftermath of claims made by BBC’s Newsnight programme in February that the chief executive of the Student Loans Committee, Ed Lester, had been paid through a personal service company.
His immediate employers and the company’s sponsor department, the Department for Business Innovation and Skills were at fault for agreeing a ‘flawed’ business case which ignored ‘the need for officials to uphold the highest standards in public life’, the Committee found.
Any future use of ‘off payroll’ schemes by government freelancers must now receive prior Treasury approval, and only in ‘exceptional circumstances’.
Richard Bacon, a fellow PAC member, said ‘flawed thinking’ lay behind the failure to consider what external experts would demand in exchange for filling senior, high-pressure Whitehall jobs.
‘These deals highlight Whitehall’s over-reliance on “hired guns” – interim staff brought in to make up for the lack of specialist skills in the civil service.’
