Doing the Right Thing

July 4, 2012

Nicholas Dobson v3 blog The currently unravelling LIBOR debacle shows that regulation can never be the complete propriety answer. For it seems that despite all regulatory authorities (including the FSA, which says it uses a ‘. . .a wide range of rule-making, investigatory and enforcement powers to fulfil . . .[its]. . . statutory objectives’), if there had been any guiding moral compass, in certain segments of the City this had been skewed way off true.

As 2012 Reith Lecturer, Niall Ferguson, pointed out: ‘Compliance is very different from doing the right thing’. And, in his view, that is ‘the disjunction that our over complex legislative system has created’. For a ‘regulatory system of enormous complexity removes the need to ask are we doing the right thing’.

But is loss of an inner sense of moral compulsion to act with propriety, even in private (commonly known as ‘conscience’) widespread? And if so, is this also prevalent in the public sector with its weighty statutory base and strong culture of propriety rules (standing orders, financial regulations and the like)? Certainly, as the Garden of Eden parable in Genesis demonstrates, self-seeking propensity is hard-wired into the human condition. And the ultimate regulatory authority (God) was not in the circumstances able to prevent Adam and Eve breaking the rules, even when they apparently had it all (except of course for the ‘bad apple’). For when push comes to shove people will often follow their desires despite the most detailed of rules. And if the soft voice of conscience protests, they will often tell it to ‘shut the f. . . up’, drowning it loudly out with spurious self-justification. The occasional local government scandals: Poulson, Donnygate, Homes for Votes, T. Dan Smith may illustrate.

It was widespread public concern about behaviour at high central levels that led in 1994 to the formation of the Committee on Standards in Public Life (CSPL). This gave us the antidote to the seven deadly sins of public life, namely the Seven Principles of Public Life. These are: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. It is these principles which (as part of local authorities’ Localism Act duty to ‘promote and maintain high standards of conduct’ by their members) must (by section 28(1) of that Act) underpin the codes which (by section 27(2)) authorities must adopt to deal with the conduct that is expected of their members when acting in that capacity.

So presumably that’s that? The CSPL must now be very pleased with the new regime which, whilst it enshrines its conduct principles, doesn’t bog members down with a stifling regulatory structure? As Local Government Minister, Bob Neill put it, the new system ‘. . .will prevent corruption, ensure high standards in public life, and put an end to petty, partisan and malicious complaints that have dragged down the reputation of local government’. Unfortunately, however, the CSPL was less buoyant. On 28 June 2012 Sir Christopher Kelly, Chairman of the CSPL wrote to Secretary of State for Communities and Local Government, Eric Pickles, noting the CSPL’s ‘previously expressed concern about the inherent robustness of the new arrangements’ and indicating that the ‘way in which the new arrangements rely heavily on a mandatory code of conduct supported by relatively modest sanctions already carries inherent risks’.

The ‘modest sanctions’ issue came into sharp public relief when MJ reported on 21 June 2012 that (following a standards investigation) (now former) Leicestershire County Council leader, Cllr. David Parsons ‘could have been suspended from his post had fresh government regulations – withdrawing town hall standards committees’ ability to impose strong sanctions – not come into force’. This was Article 2(h) of statutory order 2012/1463 which removed the power to suspend as from 7 June 2012. This took most local government commentators by surprise and local government lawyers were quoted in the MJ as terming the new standards regime ‘toothless’.

Nevertheless, we are where we are, even though the governmental sat nav may have led us a good way off the expected course. But where does all this leave ‘doing the right thing’ in the local authority context? It is reassuring that the majority of local government members and officers enter local government for entirely high-minded motives – to do what they can to improve the public weal and in particular the lot of those whom they were elected to serve. However, in the inevitable nature of human nature some have and will in future become intoxicated by their position (and such power as accompanies it) and will gradually forget that this power was conferred to facilitate public and not personal benefit. Given this self-serving pull of human nature (stronger in some than in others) the rules must set out the boundaries as clearly as possible. This is not only to keep those in public office on the straight and narrow but also to assure the public that those they elect as public stewards act only in the public interest, untainted by any perception of private benefit.

As noted, rules and rule books will never of course be sufficient on their own and those holding public trust will inevitably need to be guided by an informed, sharp and rigorous internal sense of ‘doing the right thing’. Unfortunately though, like Adam and Eve, some will inevitably suit themselves if that is the way they allow themselves to go. Rules are therefore needed to set out boundaries and clarity of public expectation. And there must also be sufficient sanction for those who fail to meet the standards that those electing them would reasonably expect. True, the new standards regime does bring in tough criminal sanctions for failure to deal as required with disclosable pecuniary interests. But there are gaps in the defining rules (S.I. 2012 No.1464) and in any event (per section 34(5) of the 2011 Act) the DPP’s consent is needed to mount a prosecution for breach. Criminal prosecutions are therefore likely to be rare and launched only in particularly clear and egregious cases. And standards encompass more than criminal corruption.

So we are effectively left with a regime which is strong on aspiration (authorities ‘must promote and maintain high standards of conduct’ by their members) but weak on practical regulation. In the context of the financial crisis, Reith Lecturer Ferguson said that ‘we must ensure that those who fall foul of the regulatory authority pay dearly for their transgressions’. Whilst ‘paying dearly’ would certainly be over-egging in terms of local authority conduct, sanctions do need to be be sufficiently clear, appropriate and proportionate so as to promote and enhance public confidence in local democracy. Unfortunately such confidence is currently at a fairly low ebb.

History (as well as mythology) teaches that individual conscience is never sufficient to prevent wrongdoing. Clear and adequate rules backed with sanctions appropriate to context and circumstance are also needed. Whilst in terms of local authority conduct these are currently rather muted to meet the prevailing political zeitgeist, time (and potential future political embarrassment) may well yield impetus for change. But by then the apple tree in local Eden may well be looking a little bare.

Dr. Nicholas Dobson is a Senior Consultant with Pannone LLP specialising in local and public law is also Communications Officer for ACSeS. He can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it.