Top civil servants face Lamont bills scrutiny

TOP civil servants are likely to be called before the Public Accounts Committee next week over their decision to pay pounds 4,700 to Norman Lamont's lawyers for handling media inquiries after his London home was let to a 'sex therapist'.

The hearings could include Sir Robin Butler, head of the Home Civil Service, Sir Terence Burns, Permanent Secretary at the Treasury, and his predecessor, Sir Peter Middleton, after the Comptroller and Auditor General recommended new rules covering public assistance to ministers over private matters.

The lack of proper guidance, Sir John Bourn told MPs in a report last night, means there are 'dangers in this situation for both ministers and civil servants'. Any similar payments in future should be specifically recorded - not as in Mr Lamont's case hidden in a sub- head of pounds 53m.

Sir John's report does not directly criticise the Chancellor for taking the money - and Robert Sheldon, the committee's chairman, said last night it was 'unlikely' Mr Lamont would be called. But Sir John criticises the records that were kept, and says there need to be 'clear principles and procedures established, with appropriate accountability'. It was 'unsatisfactory' that much of the existing rules were not relevant to Mr Lamont's case.

Gordon Brown, the shadow Chancellor, said Mr Lamont 'should return the cash he should never have received from public funds' and that the report exposed 'the cover-up under which no one was ever supposed to know about the money the Treasury paid the Chancellor'. New rules were needed 'to close these loopholes and abuses'.

Sir John's report shows that Sir Peter Middleton originally proposed paying far more of Mr Lamont's pounds 23,000 fees in dealing with the press and evicting his tenant. The Treasury's Principal Finance Officer 'expressed reservations about the scope of the payment' and recommended that the taxpayer should not meet costs for an expedited hearing and part of the eviction costs.

Sir Terence Burns, who had taken over as Permanent Secretary, then consulted Sir Robin Butler, and only the pounds 4,700 cost of Peter Carter-Ruck's law firm handling press inquiries was approved. Sir John records that Conservative Central Office then 'agreed to arrange payment' of the remaining pounds 18,000.

Mr Sheldon said questions about 'the ethos' of the civil service and future reporting remained to be answered. The committee will decide on Monday which witnesses to call and reach its own conclusions on whether all those involved acted properly.

The Treasury last night expressed satisfaction that Sir John had found no breach of the rules, but his report says that the case 'raised questions of judgement, not the application of agreed and directly applicable rules'. He also notes that there is no record that a detailed check was made of the reasonableness of the fees.

Special payments have to be noted if they exceed pounds 100,000, Sir John said, 'although there is provision for noting cases below this level where there are doubts about the propriety of the payments', and departments are 'urged to err on the side of notation rather than omission'. The Treasury did not consider there was any question of impropriety, and Sir John notes: 'There is no provision of government accounting which would suggest that this view was mistaken.'

The report notes six other cases in the past decade where ministers received help with legal fees, or it was considered, but they all involved defamation or libel.