Whitehall spending watchdog to probe Greensill's role in coronavirus support schemes

16 April 2021, 13:50 | Updated: 16 April 2021, 14:25

The Whitehall spending watchdog is to investigate Greensill Capital's involvement in the Government's coronavirus support schemes.

The National Audit Office has said that its inquiry will cover the accreditation process by which Greensill was authorised to issue financial support through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

It will also look at any post-accreditation monitoring of the activities of the firm which filed for insolvency last month.

Bridget Phillipson MP, Labour’s Shadow Chief Secretary to the Treasury, reacting to news that the National Audit Office has launched an investigation into Greensill Capital, said: “We welcome this investigation, which must now get to the truth about why hundreds of millions of pounds of taxpayer money were put at risk by the decision to accredit Greensill Capital to the CLBILS Covid loan scheme.

"But this can't just be about the delivery of the scheme - it must focus on the design of it too, which the Chancellor has accepted was his responsibility and that of the Treasury.

“There are other urgent questions. We would also welcome an investigation into why government entered into supply chain finance contracts with Greensill Capital, and to what degree that delivered value for money for the taxpayer.

"And how much public money was put at risk through the relationship between Greensill, GFG Alliance and Liberty steel, where thousands of jobs are now hanging in the balance.”

It comes after further links emerged between Whitehall and Greensill Capital.

David Brierwood combined a role as a crown representative in the Cabinet Office with being a director at Greensill for three and a half years.

The Cabinet Office stressed that Mr Brierwood's role was nothing to do with supply chain finance, Greensill's area of business, and all crown representatives go through "regular propriety checks".

There is no suggestion of wrongdoing, but links between ministers, officials and businesses are under intense scrutiny following the collapse of Greensill in March and revelations about Mr Cameron's lobbying activities for the firm.

The dual role performed by Bill Crothers, who began working for Greensill as a part-time adviser in September 2015, a move approved by the Cabinet Office, and did not leave his Civil Service role until November that year has also fuelled the row.

Lord Pickles, chairman of the Advisory Committee on Business Appointments, which examines roles taken up by ministers and officials, told MPs on Thursday it sometimes appeared there were not "any boundaries" between Whitehall and the private sector.

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Mr Brierwood's LinkedIn profile shows he was brought into government as a crown representative in October 2014, when Mr Cameron was prime minister, and continued in the part-time role until June 2018.

In December 2014 he became a director at Greensill, a post he held until February 2021.

Crown representatives are part-time executives who perform roles including managing relationships between the Government and suppliers, communicating Whitehall's needs to the market and identifying areas for cost savings.

A Cabinet Office spokesman said: "Crown representatives do not participate in the procurement process nor are they able to award any contracts.

"They are part time senior executives recruited for their working knowledge of a sector to help ensure value for money for the taxpayer.

"All crown representatives go through regular propriety checks and cannot work with a supplier where there could be a conflict of interest.

"Mr Brierwood's crown representative role was not anything to do with supply chain finance."

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Nick Davies, programme director at the Institute for Government, told The Guardian, which revealed Mr Brierwood's employment history, that "whether or not individuals breached the rules, Greensill clearly thought it would benefit from hiring a network of people with senior positions in the Cabinet Office".

Shadow cabinet office minister Rachel Reeves told the newspaper: "Revelations like this keep growing the web of the Greensill scandal, and show us how much the Conservatives have weakened the measures meant to keep cronyism and conflicts of interest in government in check."

On Thursday Prime Minister Boris Johnson said he agreed with cronyism watchdog Lord Pickles that the Government needs to "understand" the relationship between Whitehall and private sector lobbying.

Lord Pickles warned that Mr Crothers' case highlighted "a number of anomalies within the system" and predicted that it was unlikely to be an "isolated" scenario.

Mr Johnson, who has ordered an inquiry into the Greensill affair led by lawyer Nigel Boardman, said "we need to understand what's gone on here".

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As well as the Boardman review, the Public Administration and Constitutional Affairs Select Committee (PACAC), Public Accounts Committee (PAC) and Treasury Committee have all announced probes.

The PAC said it intended to invite Mr Cameron to give evidence during its inquiry.

A spokesman for Mr Cameron has indicated he would respond "positively" to any request to give evidence to any of the inquiries that are taking place once the terms of reference have been established.

Lord Pickles has called for action to improve transparency.

The controversy over the relationship between Government and the private sector follows disclosures that Mr Cameron personally lobbied Chancellor Rishi Sunak on Greensill's behalf and was able to arrange for its founder, Lex Greensill, to have a "private drink" with Health Secretary Matt Hancock.

The former Tory party leader has insisted he did not break any rules but acknowledged there are "lessons to be learned", and that as a former prime minister, any contacts with Government should be through the "most formal channels".