Jeremy Heywood, Britain’s most influential senior civil servant for two decades before his death in 2018, has been placed firmly in the frame during hearings into the Greensill lobbying scandal, as the guiding hand who opened doors in Whitehall for the collapsed finance company’s chief executive.
MPs heard on Tuesday that Heywood’s “influential” regard for Lex Greensill and the businessman’s supply chain finance proposals had helped the wealthy financier avoid more robust scrutiny as he moved through government.
The allegations were made by Bill Crothers, the former government purchasing chief who went on to become a Greensill board member, as he gave evidence to a parliamentary inquiry into the company’s lobbying efforts.
Crothers was drawn into the scandal earlier this year, when it emerged that he had been a paid adviser for Greensill for three months while still collecting his salary as the government’s chief commercial officer. The revelation about “double hatting” – holding roles in government and the private sector simultaneously – have led to inquiries by the cabinet secretary, Simon Case, and parliament’s public administration and constitutional affairs committee.
In his first public comments on the scandal, Crothers gave evidence to the committee on Tuesday, claiming Heywood had helped approve his move to Greensill.
Following his appointment as Tony Blair’s private secretary in 1999, Heywood rose to become Britain’s most powerful mandarin, with key roles in the Cabinet Office and as head of the civil service. Heywood’s memorial service was attended by four prime ministers.
The civil service chief met Greensill’s founder, Lex Greensill, in the mid 2000s while on a break from government. He had taken a senior post at the US bank Morgan Stanley, where the Australian entrepreneur was working at the time. After four years in the City, Heywood returned to Downing Street determined to bring expertise from the private sector into government. It was while serving under David Cameron that he began to introduce Greensill to key figures in Whitehall.
Greensill, which recruited Cameron as an adviser in 2018, went into administration in March after a complex arrangement with insurers and investors at Credit Suisse fell apart due to concerns over its management and exposure to risky clients. It later emerged that the firm, which offered advances on company invoices, had deployed Cameron to lobby Whitehall officials and gain access to the government’s emergency Covid loan scheme last year. The revelations have sparked a wide-ranging lobbying scandal that has led to at least 11 parliamentary and regulatory investigations.
Crothers told MPs that Heywood introduced him to Greensill, and “strongly recommended” that the financier be appointed as one of the Cabinet’s new crown representatives – the corporate experts meant to help the government liaise with the private sector and identify ways to save money.
Those endorsements in 2014 meant the appointment was not subjected to the usual checks and recruitment process, Crothers claimed. At the time of his elevation to the role of crown representative, Greensill was already working as an adviser in 10 Downing Street, a role to which he was also recruited by Heywood.
“He was already an adviser at No 10, and he had a strong endorsement by Jeremy Heywood, who was obviously held in high regard … And so there’s no reason to say no,” Crothers said.
Crothers, who founded the Crown Commercial Service, and helped manage £40bn worth of purchases for ministries and government agencies, said Heywood, along with John Manzoni, who was chief executive of the civil service until April 2020, crafted a plan to help him “transition” out of the civil service back into the private sector.
In September 2015, three months before leaving government, Crothers took on a role as an adviser at Greensill, where he went on become a board member and amass a shareholding worth £8m.
Crothers says he was “transparent” and followed the rules in “spirit and in form”.
When he asked for Heywood’s advice on the matter, Crothers said the mandarin was “extremely positive”.
“If you ask the cabinet secretary about taking a board position, and he tells you that he’s a man of the highest integrity. I mean, that is very influential of course,” Crothers said.
The committee also heard evidence from Francis Maude, a Conservative peer who served as former Cabinet Office minister under Cameron. Maude said it was “surprising” that Greensill was able to gain an advisory role in No 10 in the first place, given “how hard it usually is to bring in people with genuine expertise”.
Maude said he could not recall authorising Greensill’s appointment, but said he believes he deferred to Heywood’s judgement and support for Greensill’s supply chain finance vision. “Thinking back, I can see how I agreed to [a] temporary three month thing to test it out … I respected Jeremy Haywood a lot.”
Ian Watmore, who served as permanent cabinet secretary from 2011 to 2012, also told MPs on Tuesday that it was Heywood who pushed the government to review how supply chain finance could be used in government.
However, “it became increasingly clear that there wasn’t anything in it for us in terms of helping us to do what we were trying to do, which is save the government money”, Maude said. For the team trying to slash costs following the financial crisis, “it was a distraction from their main job’, he added.
• This article was amended on 9 June 2021. John Manzoni was chief executive of the civil service and permanent secretary to the Cabinet Office until April 2020, not the “cabinet secretary” as an earlier version said.