Accusations of cronyism and clientelism don’t seem to be going away for Labour. Tulip Siddiq’s recent resignation over an anti-corruption investigation in Bangladesh is just the latest incident. Joseph Ward and Bradley Ward argue that there are structural issues that explain the regularity with which such cases plague governments, and that only deep structural reforms over funding and transparency can help prevent them in the future.
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At the height of the party-gate scandal, we warned that the clientelism and cronyism that marked the episode was unlikely to “be consigned to the dustbin of history on Johnson’s departure”. This was because of two extant patterns in UK government discussed in our research: a centralisation of power around the Prime Minister and the pervasion of private interests in the delivery of public services. These two structural features of UK governance had contributed to a worrying slide towards sleaze, as the Labour Party described it when in opposition, which can be observed from at least the John Major premiership onwards, if not further back.
An important factor in clientelism and cronyism is the funding model for political parties.
From this perspective, it is unsurprising that Starmer’s Government became embroiled in similar allegations of cronyism during the first 3 months of his Government. “Donorgate”, as it has been termed, was only the latest chapter in an all-too-familiar story in UK politics. Headlines have included the cash-for-questions affair in the mid-1990s, Tony’s Cronies during the Blair premiership, the revolving door between David Cameron and financier Lex Greensill which outlasted multiple governments and culminated in the Covid contracts scandal, and finally, Johnson’s attempted overhaul of the parliamentary Committee on Standards to protect his political ally Owen Paterson and his repeated errors of judgement during party-gate. It is of little surprise that the National Audit Office have recently warned that the UK is “at risk of becoming perceived as more corrupt than it was before the pandemic”.
Who funds political parties?
In the most donorgate scandal, a slew of staffers from the pro-Starmer Labour Together, a powerful thinktank that has been described as a Super PAC due to its vital role in gathering donations for the Labour Party, have been appointed in impartial civil service roles using a time-limited exceptions process, which allows ministerial departments to bypass the principle of selection on merit and open competition. Starmer has also been accused of hypocrisy for giving Labour donor Lord Alli – who is now under investigation by a parliamentary watchdog – unrestricted access to 10 Downing Street after he furnished Starmer and Deputy Prime Minister Angela Rayner with tens of thousands of pounds worth of gifts. This is far from an exhaustive list, with other senior members of Government including Health Secretary Wes Streeting, Science Secretary Peter Kyle and Education Secretary Bridget Phillipson also facing accusations of cronyism.
Public funding of UK political parties is considerably more restricted than most European counterparts and is mostly limited to administration costs. With little public funding and a collapse in party membership fees since Corbyn’s resignation, Starmer’s Labour have turned to private donations from wealthy backers (whose donations are not restricted) to plug the gap. They have been extraordinarily successful in this pursuit, raising £9.8 million in donations during the 2024 election campaign – more than all other parties combined. This is the latest spike in a striking rise in party financing since 2001, which has been disproportionately driven by “mega-donors”, who now dwarf the trade unions as the Labour Party’s main source of funding.
Power over decision-making but a lack of capacity to deliver
As our recent article highlights, a second factor in the persistence of cronyism is inefficiency at the heart of government. The executive in the UK is well-known to wield considerable decision-making power whilst simultaneously lacking capacity to implement policy in a highly, and ever increasingly diffused and underperforming system. The Starmer government began with a focus on rebuilding trust with the civil service following its strained relationship with previous Conservative administrations. However, the Government is reportedly growing frustrated with what it perceives as an inability to match the pace of its agenda. Recently, the prime minister went so far as to criticize what he describes as a civil service culture “comfortable in the tepid bath of managed decline.”
The Government’s use of the exceptions process to parachute in political activists and former candidates from Labour Together into non-political civil service roles goes a step further than previous governments.
Our view is that this enduring governance problem, which we term “power without capacity”, can go some way towards explaining the clientelism and cronyism at the centre of government. Maintenance of a centralised executive gives senior members of government significant leeway to extend their network of advisors across Whitehall. The growing influence of special advisers is now well documented, with the public profile and reported influence of the now resigned Sue Gray and her replacement Morgan McSweeney perhaps only equalled by Dominic Cummings and before him Jonathan Powell. Furthermore, the Government’s use of the exceptions process to parachute in political activists and former candidates from Labour Together into non-political civil service roles goes a step further than previous governments. There may well be some good reasons to recruit outside expertise, but it is vital that such appointments are strictly regulated to avoid the controversies that have plagued the early months of the Starmer government.
Combined with inefficiency in the wider policymaking system and a longstanding lack of capacity, it is of little surprise that governments use the levers available to them to recruit outside expertise and curry the favour of private actors. Personal appointments, often with the right intentions, are now common on advisory boards (inc. Non-Exec Directors), ministerial roles and the civil service, and there is growing pressure from many quarters for the civil service to be more open to outside appointees. While outside appointments that follow a diligent process can lead to better outcomes, there is a much higher risk of clientelism and cronyism, as we are increasingly witnessing in UK politics, in lieu of stronger mechanisms of accountability and transparency.
What can be done?
Keir Starmer was right to emphasise the importance of “fixing the foundations of this country” shortly after becoming Prime Minister. Important legislation requiring MPs and senior civil servants to more extensively disclose personal communications, meetings and gifts has been passed in the aftermath of the Owen Paterson scandal. The current Labour government has also moved swiftly to tighten the rules surrounding second jobs.
Given the continued centrality of political parties to the political system, an urgent review of their funding model is long overdue.
However, further reform is required to root-out the sources of cronyism in UK politics. If the civil service is to recruit more outside expertise, as many experts argue it should, then a review of the process for screening them should be made, as the government is reportedly considering. For example, ensuring greater clarity and transparency in the operation of the Civil Service Commission would help to ensure there is a strong business case for exceptional appointments. Furthermore, given the continued centrality of political parties to the political system, an urgent review of their funding model is long overdue. Parties looking to occupy a centre that holds extensive political power, but remains dependent on the private sector for policy delivery, marks out a clear target for wealthy individuals looking to buy influence. Finally, the capacity of parliament to scrutinise personal appointments made by prime ministers – such as the appointment of David Cameron as Foreign Secretary or the Minister for Investment recently appointed in the Department for Business – should be strengthened if the government is serious about closing the revolving door in UK politics.
Although these would be steps in the right direction, still more transformative measures to democratise decision-making and strengthen accountability are needed if the UK is to improve policy delivery and curtail cronyism. If the core executive continues to wield considerable decision-making power over ministerial and advisory appointments, while simultaneously lacking the capacity to deliver effective policy responses to the multiple problems the UK currently faces, it will retain the freedom and incentive to make personal appointments that may not serve the public interest, despite their best intentions.
All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.
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