Exclusive: Top nuclear official loses contract as Whitehall panics over tax avoidance

Office for Nuclear Regulation:First victim of Whitehall cull

The man in charge of  running nuclear regulation has had his contract terminated in the wake of panic across Whitehall following  the disclosure that Ed Lester, chief executive of the Student Loans Company, avoided having tax and national insurance deducted by being paid through a personal service company.

Paul Brown, interim chief operating officer of the newly formed Office for Nuclear Regulation,has been told that his contract will not be renewed next month provoking  extraordinary anger among professional organisations representing freelances.They fear the whole situation is getting out of hand and that there could be a witch hunt in Whitehall against anyone who has a personal company.

The full story is published on the investigative news website http://www.exaronews.com .But the essence of the dispute is that Whitehall panic – generated by the decision of Danny Alexander, Chief Secretary to the Treasury,checking 4000 senior civil servants pay arrangements could lead to the wrong people being asked to go.

The difference between Ed Lester’s arrangement, now moved to PAYE for his £182,000 post, and Paul Brown’s post, is that Ed Lester seemed to have only one job and was getting paid holidays and a £28,000 pension contribution,normally associated with a full-time post.

Paul Brown’s company,Operations Improvements Ltd, seems to be a tailor-made vehicle to offer his services for a string of jobs including previous posts at the Health and Safety Executive and the Forensic Science Service. His Linked-In site also shows he does mentoring and emergency work as a director.

The irony of all this is that Ed Lester who has had to accept a PAYE arrangement has kept his job while Mr Brown seems to have become the first senior man in Whitehall to lose his.

PCG, the organisation which represents some 20,000 freelance contractors and professionals, also has a WordPress blog where Chris Bryce,chairman of PCG, outlines the arguments for  not treating everyone the same.The blog is at http://www.insidepcg.wordpress.com  for those who want to read it.

Paul Brown is barred by his existing contract from speaking about this, but friends tell me he is furious about the decision.

Last night (Friday) it became clear that a second senior official, Jon Seddon, the finance director of the nuclear agency, had also had his contract terminated.

6 thoughts on “Exclusive: Top nuclear official loses contract as Whitehall panics over tax avoidance

  1. David, It’s clear you appreciate there’s a world of difference between ‘disguised employees’ and genuine interim managers operating through limited companies. I think that important point may be in danger of getting missed/lost in other media reports. Here’s our take on this in a new blog post (link below). Happy to talk about this if you need further information. All the best, Nick



    • I can see your point. Not only are journalists missing the difference but what is more alarming is that politicians don’t seem to understand this either. Given that the arrangements at the Student Loan Company for Mr Lester were signed off by ministers and have now proved to be wrong – the poltical reaction seems to be to run round and find any other superficially similar arrangement and immediately order it to stop. One wonders if the Office for Nuclear Regulation posts were approved by the same ministers who are now forcing people to leave.


    • In his post Mr Diprose refers to ‘a few senior public sector executives’, who are generally employed for ‘a short period of time measured in months’. In fact the practice of hiring ‘interim’ consultants in local government would appear to be increasingly widespread, for example in Barnet and Harrow, for long term placements in the posts of Section 151 chief finance officers.


      • Obviously can’t comment about Barnet and Harrow as I don’t know the specific situation, but here’s what we think an interim is: someone objective, suitably over-qualified and expert who operates at speed, is accountable, effective and committed. They lower the risk of failure, offer a clear return on investment by agreeing and meeting set objectives, while transferring skills and knowledge to permanent staff in a pre-set timescale, usually measured in months. Typical assignments include crisis, turnaround or change management, gap-filling during a search for a permanent post-holder, sudden departure cover, change management, MBOs, IPOs and M&A, and general project management.

        If there’s no clear exit point, you’re right to question what’s going on!


  2. Barnet has more than half a dozen ‘interim’ senior officers paid via their own companies, and I believe that this may be the case in many other local authorities. I’m sorry to say that I do not recognise any of the admirable qualities you list – over qualified, operating at speed, accountable, effective or committed, as being typical of the administration here, but in that perhaps we are unusual. I would imagine that the fault lies, as you suggest, in the lack of any time limitation, and this proves the point that interims, on particularly high salaries, are being used – in local government anyway – in conditions that benefit the post holder rather than the tax payer paying their wages.


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