Her Majesty's Government has power and likes it that way. Actually it wants more power and more money. It is in a position to get both. It grants itself more power by changing the law. It demands more tax money using the law. Play by their rules or be a criminal. Courts, fines and imprisonment are the weapons. Of course none of this concerns real people too much. They can always go overseas or use clever accountants. It is just the little people who get ground down.
Having got the money the next step is to spend it. You might think that an income of well over £500 BILLION would be enough to satisfy any man's greed. You would be wrong with Brown. Spending it is easy when there are businessmen out there who are prepared to pander to your every whim if the price is right.
One trouble is that salesmen are very eager and will do nice things for the politicians and civil servants when they hold the purse strings. Business entertainment starts with a cup of tea and escalates from lunch in the works canteen to dinners in good hotels, outings, first class flights, five star hotels, dancing girls and brown envelopes - Heath was keen on those; the money that is. His tastes ran more toward choir boys.
Somewhere along the line the little favours shade imperceptibly into bribery and corruption. These are crimes and things can turn very nasty - unless your little mate happens to be the Director of Public Prosecutions.
But one answer is to have an auditor, a man who look at the books and decide whether it is crime or just good fun. He even gets to decide whether the tax payer is getting value for money. The practical answer to this is bribe the auditor. Sir John Bourn was his name and he got away with it for nineteen years. Then Private Eye took a look at his track record and he resigned. Perhaps Bourn wasn't interested in the women and the backhanders but he was definitely in for as many freebies as he could get.
Maggie appointed Bourn to do the job on a very long leash. But she did it from a list given to her by civil servants. Were they all corrupt? I know not but the men who chose them fed her insiders who were going to turn two blind eyes to mismanagement and fraud.
Bourn Complicity
From Private Eye 1218
How the NAO, Britain's public spending watchdog, lost its bite while its master was out to lunch (and dinner)
"I've been successful for the entire 20 years," was Sir John Bourn's modest valedictory assessment of his career at the helm of the National Audit Office.
In fact, over two decades Bourn quietly corrupted Britain's principal public spending watchdog. And he got away with it for 19 of those years, until Private Eye discovered how the man with the job of preventing taxpayers' money being wasted was in fact wasting it on himself.
As Sir John's jaunts and junkets were exposed, a picture emerged of a body that, far from "helping the nation spend wisely" as its strap line would have it, had become the lapdog of both the government it was supposed to hold to account and the powerful private beneficiaries of New Labour's spending splurge. This is the story of how it happened...
THE OFFICE of comptroller and auditor general (C&AG) that Sir John Bourn assumed in January 1988 had been created 122 years earlier by the chancellor of the time, William Gladstone, as he sought to bring some probity to public spending. For the first time government departments would be required to produce accounts for examination by the new C&AG and a "Committee of Public Accounts".
The job remained more or less untouched until the 1970s when Crown Agents, a shady government body that was busy hatching deals abroad, collapsed under the then C&AG's nose with the loss of £200m. The antiquated arrangements for safeguarding public funds were found hopelessly wanting when it came to late 20th-century methods of splashing the taxpayer's cash.
What was needed was a professional public auditor, which duly emerged following a 1982 private member's bill introduced by one of Margaret Thatcher's early ministerial cast-offs, Norman St John Stevas. The new National Audit Office (NAO) would not just sharpen up the audit of government spending but also judge whether taxpayers were getting value for money.
Although itself born out of scandal, the new watchdog could not have been put on a longer leash. At its head the comptroller and auditor general, retaining his historic title and grandeur, acquired even greater independence from government. He alone would sign off the government's books, appoint National Audit Office directors and staff and decide which parts of public spending should be examined under legislation affording him "complete discretion in the discharge of his functions".
The absolute autonomy given to the C&AG was designed to distance him from the government he would hold to account. But, on the heroic assumption that the incumbent would be forever inscrutable, the National Audit Office Act 1983 also made him the least accountable public servant in Britain.
New-Bourn auditor
WHEN THE C&AG who became the first head of the NAO, Sir Gordon Downey, retired at the end of 1987, he was applauded by the Times for having established the new body as a "terrier at the heels of Whitehall". His new army of qualified accountants had dug out fraud at the Ministry of Defence, exposed a fiasco surrounding the Severn Bridge and declared the British Airways privatization a £300m rip-off.
Mrs Thatcher put forward a 53-year-old MoD mandarin to replace Downey. But immediately there were suspicions that Dr John Bourn might prove a "cat's paw" of the establishment, prompting a handful of MPs to vote against his appointment. Others argued that his intellect and resilience - he was already a visiting professor at his alma mater, the London School of Economics, and had served two terms in the Northern Ireland Office at Stormont - would equip him well to take on any mandarin or minister misusing public money.
Bourn would go on to present himself as an outsider in a Whitehall run by Sir Humphreys. Whereas they were public school and Oxbridge, he was Southgate grammar and LSE (hardly the school of hard knocks and university of life, though) before becoming a civil service high-flyer.
From 1985 Sir John had been "deputy under secretary of state" in charge of defence procurement at the MoD (he would later, without irony, describe himself as "the first of the big spenders to become C&AG"). There he would have been well aware of the corrupt and now infamous Al Yamamah arms deal under which Britain sold jets and weapons to Saudi Arabia with the help of bribes and slush funds. When it came to parts of government on which the glare of public scrutiny would be particularly unwelcome, Sir John was very much an insider.
The NAO would go on to write two reports on the Al Yamamah deal, neither of which has seen the light of day. A 1992 report was seen only by two loyal public accounts committee (PAC) members before being permanently sat on for fear of upsetting the Saudis, while a 1996 report on an extension of the contract didn't even circulate that widely. Though he got as far as discussing the report with the MoD, Bourn took the extraordinary step of not showing it to any member of the PAC.
The first suspicion that the watchdog might be losing its teeth emerged a few years into Bourn's reign. In 1994 the Economist reported disquiet among MPs on the public accounts committee that Bourn's office was working too closely with Whitehall. The approach, confided one senior civil servant, was "not to rock too many government boats".
Yet, despite the concerns already emerging about the watchdog, the media - actively cultivated by the NAO machine - refused to delve too deeply. Only one journalist dared to do so, exposing a particularly blatant NAO cover-up.
In 1994 the hack in question, a certain Paul Foot of Private Eye, exposed the sacking at Portsmouth University of a whistleblower who had objected to the vice-chancellor's expense-fiddling. When, a few months later, the National Audit Office reported on the scandal, it found "no evidence" that the whistleblower had been persecuted. So wide of the mark was this that she even won her case for unfair dismissal. As Foot concluded, the time was ripe for "sorting out the compromisers at the National Audit Office".
While the episode betrayed the NAO's unwillingness to upset anybody too important, it's not clear whether Bourn was personally involved. His attention had never been entirely focused on domestic matters, anyway. He was too busy taking the National Audit Office... international.
Air-Bourn at last
AN ESSENTIAL requirement for a modern national spending watchdog, it turns out, is a valid passport with lots of space for visas. While the job of checking up on £500bn worth of British public spending is left to the poor saps back in the office, the top man can tread a well-worn international circuit attending talking shops, assistance projects and bidding for overseas work.
Bourn aggressively expanded this sideline, winning scores of contracts to audit international bodies under organisations like the United Nations. By 1999 the NAO had become auditor for 50 such bodies, ranging from the World Meteorological Organisation to the International Atomic Energy Association. He had also spent four years on the UN board of external auditors and landed the chairmanship of the World Bank audit advisory group, as well as leading various UN audit "working groups". Then there were the countless training and "twinning" projects to improve public auditing around the world, and a central role at the national auditors' talking shop, the International Organisation of Supreme Audit Institutions (Intosai), which would go on to honour him for "exemplary and sustained leadership and contributions to a wide range of Intosai programs, committees, and working groups".
Walking the world stage appealed to a man of refined tastes who, as luck would have it, was not constrained by the kind of expenses rules covering civil servants or officials. In fact there were no rules or checks holding him back, apart from any shame a public spending watchdog might feel at blowing public cash in a way he would condemn out of hand if he found it on one of his audits.
On his increasingly frequent trips abroad Bourn would instruct his assistants to find the best hotels with the finest restaurants, often in the most fashionable districts so that his wife Ardita could shop while he was in meetings.
It was first-class all the way: trips to the US on Concorde and nights at the grandest hotels, eschewing standard rooms in favour of deluxe suites costing hundreds of pounds a night. In the regular destination of Vienna (home to a number of UN bodies that the NAO audited) the routine was to stay in the £500-a-night Hotel Sacher with dinner in the famous Drei Hussaren restaurant, where a typical bill would be well over £100-a-head after something rather better than the house plonk had been taken. Not that Bourn bothered himself with the pounds, schillings or pence. His private secretary was always on hand with the NAO credit card to pick up the tab. Back home, meanwhile, government auditors would be ensuring that civil servants and ministers stuck to expense limits a fifth of what the country's top public spending watchdog was racking up.
But none of this extravagance was known. It took nearly 19 years for the public to gain a glimpse of how the guardian of its cash was spending its money, and then it had to be dragged out through a series of freedom of information requests from the Eye.
Eventually a tale of staggering extravagance emerged. In the three years up to March 2007, it transpired, Bourn had run up expenses on 44 foreign trips of £336,000, of which £76,000 was spent on air fairs [ sic ] for his wife. Lady Bourn, as she became upon Bourn's 1991 knighthood, accompanied him on 22 occasions, invariably to the most exotic locations (see The Bourn Grand Tour, below).
Most sumptuously of all came six days in the Bahamas in October 2005 for the Caribbean Organisation of State Audit Offices Congress. The conference itself finished on the 19th of that month, a Thursday, but the Bourns stayed on for another five days because Sir John had arranged a meeting with the auditor general of the Bahamas on the Monday morning - to discuss precisely what, nobody knows; but it obliged Sir John and Lady Bourn to spend a long weekend on the 80°F Caribbean island. The ordeal may have been eased for Sir John by enabling him to enjoy the recreations of tennis and swimming that he lists in Who's Who.
When the NAO belatedly admitted to the Eye which hotels the Bourns had chosen, their life of luxury became clear: Russia's leading hotel, the Astoria, when in St Petersburg at around £400 a night; and the £300-a-night continued
SIR JOHN AND LADY BOURN'S GRAND TOUR
The Bourn freebies: a selection of their 24 jaunts from April 2004-March 2007
Destination Days away incl. travel Hotel Event for which Lady Bourn's presence was essential
Mauritius, April 2004 4 Maritim Peer review of NAO of Mauritius
Budapest, October 2004 8 Gresham Palace International Organisation of Supreme Audit Institutions congress
Paris, December 2004 3 San Regis UN panel of external auditors
Auckland, January 2005 9 Club International Commonwealth auditors' conference
Morocco, April 2005 4 Tour Hassan Discussion of training project
China, July 2005 5 Grand Hyatt Technical cooperation project
Brazil, September 2005 8 Intercontinental Working group on privatisation
South Africa, November 2005 6 Sheraton Presentation to South African public accounts committee
St Petersburg, May 2006 4 Astoria Cooperation project with Russian chamber of accounts
Bahamas, October 2006 7 Wyndham Caribbean Organisation of State Audit Offices congress and visit to
Bahamas auditor general
Tunis, December 2006 2 Abou Nawas European/Arab State Audit offices seminar
Jordan, January 2007 4 Intercontinental Launch of twinning project
Source: NAO
Continued
San Regis just off the Champs Elysees in Paris, for example. Even when travelling within the UK without Ardita, Sir John pushed the boat out. In Edinburgh he got his head down at the five-star Balmoral, which turned out to have cost £182. As the Eye pointed out at the time, even the most senior civil servant would be allowed to spend just £75 in that city.
The NAO baulked at giving a full detailed breakdown of Bourn's expenses, but the small sample it later provided did reveal how the eye-watering costs built up. The first-class fares to Brazil for Sir John and Lady Bourn set taxpayers back £15,997; travelling in similar style to South Africa a further £14,518; while the Bahamas flights came in at a bargain £10,260. Back in 2004, a week at the Gresham Palace in Budapest overlooking the Danube cost £3,140 - or £420 a night.
The lurid details at last prompted interest from a media that had ignored the National Audit Office for two decades. The Eye's revelations could no longer be ignored.
Ask no questions
WHEN PARLIAMENT'S public accounts commission convened to address the issues the Eye had raised in June last year, hopes were raised that Sir John might indeed be brought to book. All but one of the commission members also sat on the Commons public accounts committee, which under Tory chairman Edward Leigh had established a reputation as an effective scrutineer of government. In their time the same MPs had mercilessly torn into many a wasteful mandarin and minister.
In the event their efforts would make the Hutton report look like a searing critique of British public life. Commission members Alan Williams (chairman), Edward Leigh, John McFall, Austin Mitchell, Nick Palmer and Andrew Tyrie met one morning in camera, using as the sole basis of their deliberations a secret briefing from the NAO itself which contained several misleading statements. Meanwhile, the Eye has recently discovered, in the days leading up to the commission's deliberations Edward Leigh and Alan Williams had two covert meetings with Bourn. Several questions demanded answers but, happy to rely on the evidence of the man whose conduct was the subject of the inquiry, the commission didn't even bother to ask them:
Why did Sir John need to travel so extensively in the first place? With public spending fiascos erupting back home almost weekly, did he really need to leave the office for a week on a "peer review of the National Audit Office of Mauritius", a similar absence to discuss a training project in Morocco, or a "twinning" project in Croatia? Wouldn't these technical events have been better handled by people lower down the NAO hierarchy? None would have been high on a British taxpayer's list of priorities for the national spending watchdog. The NAO note defended Bourn by claiming that he travelled for a "portfolio of international work which generates over £4m of income each year". Once the Eye ' had crunched the numbers in the NAO's own accounts, it became clear that after expenses international work lost the organisation money.
2 The commission could also have questioned the necessity of Lady Bourn's attendance, especially on the more enviable trips. On this the NAO told the MPs that she did so "where the host would have reasonable expectations that she would attend". The Eye had been assured that her attendance was "in line with established practice in the diplomatic service and her presence is greatly appreciated". But what evidence was there, for example, that the presence of a former model with no auditing or diplomatic experience was "greatly appreciated" at the working group on privatisation in Brazil (her share of the airfare £8,000)? The commission didn't even ask.
3 The Eye had also raised questions about the obvious perk that Sir John was enjoying. The costs of his wife's trips were taxable benefits, admitted the NAO, before revealing that the consequent tax bills were also met by the NAO, ie taxpayers. The double whammy of having his wife's expenses and his tax bill paid for him had been worth £47,000 a year to Bourn since 2003, yet incredibly the NAO had failed to mention it in its own accounts. Bourn, the country's top public auditor and chairman of the leading bean-counting regulator, the Public Oversight Board for Accountants, had repeatedly signed accounts declaring his salary (£160,000 in 2006/07) but stating that he received no benefits. Even the benefits eventually admitted weren't the end of it. By ignoring his wife's share of hotel and restaurant costs, they underestimated his perks. Then there was the private use of a chauffeured car that the Eye exposed. The commission's comment on under-declaring benefits and signing dodgy accounts? Not a word.
4 The commission also failed to question Sir John's justification for dipping into the public purse to pay a large part of his personal tax bill every year. The NAO could meet his bill, he said, because civil service guidance allowed it. Bourn, of course, had been only too happy to exploit the fact that he was not a civil servant in order to spend many times their expense limits, but breezily used concessions designed for them when it suited him. The civil service rules in any case made clear that travel for spouses should be exceptional (not Lady Bourn's 24 trips in three years) and that costs should be kept to a minimum (not £8,000 first-class fares). No matter, Bourn could make his own rules and the commission certainly wasn't going to censure him.
§Nor was the commission perturbed by the misleading explanations given to them and the Eye over why Sir John stayed in such expensive hotels. "Normal practice," the NAO claimed, "is for the C&AG to stay in hotels recommended by the host...". Yet the Eye had already checked with two of the hosts, the Scottish auditor general and the Northern Ireland Office permanent secretary, and established that the best-in-town five-star hotels Bourn had used in Edinburgh and Belfast certainly had not been recommended by them.
Faced with this litany of self-indulgence and misrepresentation, the men whose denunciations would have echoed through Whitehall had they found such evidence elsewhere in the public sector reached for the whitewash. The commission "concluded that there was no evidence of impropriety in the use of public money, and that the expenditure had been in accordance with the existing rules on such expenditure". Sir John could carry on, albeit chastened by the requirement to stick to civil service expense limits and have his travel plans approved by his audit committee beforehand.
Whether the committee's sympathy for Bourn was related to later revelations that its two senior members, Leigh and Williams, both employ close relatives on parliamentary salaries can only be speculated on.
Bourn to roam
THE EXTENT of Bourn's gallivanting could be measured in the time it kept him out of the office. In the three years the Eye looked at, he was on his travels for 173 days, an average of 58 days a year. Discounting weekends, he was absent for 45 working days - or more than 20 percent of the working year, even though international work was at most 5 percent of the national auditor's business. At the same time Sir John had variously performed the extra jobs of auditor general for Wales, adviser to the prime minister on potential breaches of the ministerial code, and chairman of the Professional Oversight Board for the country's accountants (which, it later emerged, was considered a two-day-a-week job), leaving
The Wyndham hotel in the Bahamas where the Bourns had to endure a long weekend in 80°F temperatures while waiting to meet the islands' auditor general
him somewhat distracted from his day job scrutinising British public spending. But nobody bothered. Why not?
Bourn got away with it for so long for a number of reasons. One was that he failed to declare the perks he was receiving in the NAO's accounts, which would have given a clue as to what was going on. This, the whole purpose of disclosure in published accounts, was an odd point to escape the country's most senior auditor.
Another reason was the absence of any restrictions on Bourn's conduct. He could exploit his statutory "complete discretion in the discharge of his functions" to make up his own rules and nobody was going to question him. And by retaining absolute control over hiring and firing, Bourn surrounded himself with acolytes who dared not challenge their imposing boss. (A common career route for an NAO board member involved a stint as