1. TRAC: TRANSPRENCY IN REPORTING OF UK Public Sector Governance & Corruption CIPFA Governance Summit October 15 th 2013 Dr Robert Barrington, Executive Director

2. Is there a problem? Corruption Perceptions Index 2012

4. June 2011 report

5. Corruption research Limited range of methodologies Data scarcity Problems with measurement Use of allegations to illustrate typologies Focus on robustness of systems not scale of the problem

6. Is corruption always illegal? Sometimes illegal –eg bribery Sometimes unethical but legal – MPs’ expenses – Revolving door – Political party donations – Unregulated political lobbying

7. National opinion survey

8. Institutional analysis National Integrity System (NIS)

9. Scorecard 2013

10. Corruption in UK Local Government

11. Local Government: Inherent Corruption Risks 1 Procurement STRUCTURAL RISKS: High-value transactions Complex transactions Post-award contract implementation Buyer-user disconnect TYPES AND IMPACT: Cronyism, favouritism Conflicts of interest Mis-allocation of resources Unfair competition CASE: Wirral Highways

12. Local Government: Inherent Corruption Risks 1 Procurement 2 Outsourcing STRUCTURAL RISKS: Unclear accountability Weak monitoring Little competition among providers CORRUPTION TYPES AND IMPACT: Conflicts of interest Revolving Door Value for Money? CASE: SouthWest One

13. Local Government: Inherent Corruption Risks 1 Procurement 2 Outsourcing 3 Planning decisions STRUCTURAL RISKS: Powerful interests Officer/member discretion Difficulty of detecting influence TYPES AND IMPACT: Cronyism, favouritism Conflicts of interest CASE: East Devon

14. Local Government: Inherent Corruption Risks 1 Procurement 2 Accountability of outsourced services 3 Planning decisions 4 Housing: potential collusion in fraud STRUCTURAL RISKS: Discretion over allocation Weak investigative capacity Monopoly power of monitors TYPES AND IMPACT: Cronyism, favouritism Right-to-buy manipulation Organised crime CASE: Nottingham City

15. Local Government: Inherent Corruption Risks 1 Procurement 2 Outsourcing 3 Planning decisions 4 Housing: potential collusion in fraud 5 Individual Electoral Registration STRUCTURAL RISKS: Discretion over allocation of resources for registration Difficult to detect corruption TYPES AND IMPACT: Politically motivated allocation of resources for registration

16. Local Government: weakened accountability of the system 1 Audit AUDIT COMMISSION ABOLISHED No standard-setter No public audit ‘backstop’ No collection of data on trends INTERNAL AUDIT Cuts mean reduced capacity Audit Committees weak EXTERNAL AUDIT Compromised independence Disincentives to challenge Uncertain transparency

17. Local Government: weakened accountability of the system 1 Audit 2 Standards for elected members STRUCTURAL RISKS Accumulation of informal power Patronage power of leaders PROBLEMS WITH NEW SYSTEM Weakened monitoring and enforcement Reliance on criminal offence (Threat to independence of Chief Execs, Financial Officers and Monitoring Officers)

18. Local Government: weakened accountability of the system 1 Audit 2 Standards for elected members 3 Armchair auditors? –Media –Voters –Whistleblowers LOCAL MEDIA: In decline Loss of important arm of scrutiny VOTERS HAVE WEAK VOICE: One-party councils Uncontested seats WHISTLEBLOWERS: High personal costs Retribution is common Requires supportive culture – unlikely to exist in most corrupt places

19. Local Government - Summary 16 areas of weakness identified 22 recommendations Key recommendations –Risk assessment – linking to new Serious and Organised Crime Strategy –Strengthen audit procedures –Strengthen and support whistleblowing –Need for national code of conduct –Extend Nolan Principles and FoI to private sector when operating public services

20. Local Government - Conclusions Unintended consequences of significant changes Cumulative effect Need for greater prioritisation of corruption Importance of standards, audit and transparency

21. 21 Overall conclusions: enablers of corruption Creating the space in which corruption can thrive –Lack of transparency –Lack of accountability –Poor governance –Poor tone from the top –Poor auditing and compliance –Poor enforcement –Complicity –Intolerance of whistleblowers

22. 22 Overall conclusions – constructing a robust system Closing down the space in which corruption can thrive –Tone from the top –Risk assessment –Effective policies and procedures –Due diligence –Communication and training –Monitoring and review

23. www.transparency.org.uk