A Public Accounts Committee (PAC) report has condemned the use of “off-payroll” civil servants by government departments and the BBC. Key issues are corporate governance and taxation but this also exposes lack of accountability in the civil service.

The PAC has found that some 2,400 permanent government employees are paid off-payroll, this included the Chief Executive of the Student Loans Company. Surprisingly HM Treasury, Cabinet Office and HM Revenue & Customs all failed to properly challenge his appointment which the committee considers gave the appearance of endorsing the use of off-payroll tax arrangements.

There is no exact measure as to how prevalent the use of “inappropriate” off-payroll arrangements is beyond central government, and the PAC has declined to guess. However, the BBC has identified 25,000 off-payroll contracts, including 13,000 contracts for 'talent'. As accountants and job agencies will vouch this is probably the tip of an iceberg which has not considered the use of contractors by the MOD and NHS.

The PAC also found that HMRC has virtually given up on IR35; investigating a mere 23 cases in 2010/11. HMRC is set to risk review the cases identified by the PAC.

Other than tax the conclusions appear to be that the government has not got a plan on how it should tackle the underlying issue - the public sector is dependent on interim staff as there is a lack of specialist and professional skills within government. The report does not mention one major problem which those who try to work with government departments  often find; the culture which requires the constant changing of jobs. With the average time spent in some posts being less than two years a lack of specialism seems unsurprising and does not encourage accountability as the recent fiasco involving the West Coast train line also revealed.

The PAC adds that it “has twice recommended in recent years that government should plan its long term skills needs, identify core skills gaps and develop the capabilities to meet the skill requirements. The Cabinet Office should demonstrate how the Civil Service Reform Plan will address the issues and the key skills gaps that remain prevalent in government.”