Leading Article: Something rotten in the state

YESTERDAY'S momentous Public Accounts Committee report into standards of public service does not just detail another scandal in a government department. It is much more significant than that. This is a warning that the British state - once among the cleanest in the world - is fast losing that pre-eminence. It is an authoritative signal that if the Government does not nurture the old decencies of public service, it could soon face serious problems of corruption. The committee identifies examples of fraud, waste and dubious conduct in various parts of public administration. The catalogue of failure shows how millions of pounds of taxpayers' money have been spent without prudent controls or democratic accountability.

Poor accounting at the Foreign Office; disastrous, badly monitored NHS computer systems; incorrect payments made to those running youth training programmes; improper use of funds for ex-gratia payments and official cars: the list is a chronicle of slack government.

The Public Accounts Committee is a non-partisan body with members from all parties and a Tory majority. That such a committee has protested so vehemently is a measure of the seriousness of the situation. It is particularly worrying that neglect of financial probity has marked the tenure of a government that prides itself on its efficiency and elimination of waste.

The Conservative years have been characterised by efforts to improve public services through greater delegation of responsibilities, streamlining and a more entrepreneurial approach to work. Much of this has been laudable, shaking up the old Whitehall inertia. But the reformers have failed to ensure that those delegated to use public money spend it properly. There is no lack of regulations: the rules are simply being ignored.

As ministers press on with 'the long march to the irreducible core of the state' - to quote Stephen Dorrell, Financial Secretary to the Treasury - they should reflect on the wisdom of their plans. Government is now delivered by 30 core departments, more than 90 agencies, hundreds of quangos and thousands of outside contracts. This fragmented public service is a dramatic change from the unified system pioneered by Northcote, Trevelyan and Gladstone, with its meritocratic, career civil service.

Their system of administration successfully destroyed the nepotism and incompetence that characterised government until the middle of the last century. These giants of public service must be spinning in their graves at the shoddiness detailed in the report.

The backbone of their system was a powerful public service ethic. But the Public Accounts Committee has shown that this ideal is threatened in the new world of services delivered by outsiders. Ministers must recognise that the greater efficiency offered by their reforms should not be at the expense of the honesty that prevailed in public service for more than a century before they came to power.