Crown Agents Tribunal

The Tribunal of Inquiry into the Crown Agents' Affairs was established in 1978 under the Tribunals of Inquiry (Evidence) Act 1921 to investigate serious financial mismanagement by the Crown Agents, a UK government agency originally responsible for managing procurement and financial services for British colonies. By the late 1960s and early 1970s, the Crown Agents had ventured into speculative investments and property dealings on their own account, incurring substantial financial losses.

The inquiry, chaired by Sir David Powell Croom-Johnson, focused on the decision-making processes that allowed such speculative activities, the scale of the losses incurred, and the adequacy of supervision by government departments and the Bank of England. The Crown Agents were found to have taken on a range of high-risk investments, including property speculation and dealings in secondary banking markets, without sufficient expertise or accountability. This resulted in losses estimated at around £200 million, which had to be covered by public funds.

Key findings of the inquiry highlighted significant governance failures within the Crown Agents. These included inadequate internal controls, poor risk management, and a lack of clear oversight from government bodies. The tribunal criticized the Crown Agents’ leadership for operating beyond their mandate and for failing to adhere to sound financial practices. It also found that government departments, such as the Overseas Development Administration (ODA), had not exercised effective supervision, allowing the Crown Agents to act with excessive autonomy.

The inquiry’s report, published in 1982, included 44 recommendations aimed at improving governance and accountability. Key recommendations included restructuring the Crown Agents to limit their independence in high-risk financial activities, implementing stricter internal controls, and strengthening oversight by government departments. These recommendations were later reflected in the Crown Agents Act 1979, which redefined the agency’s role and placed it under tighter government control.

The Tribunal of Inquiry into the Crown Agents’ Affairs served as a cautionary tale of the dangers of inadequate oversight in public institutions. Its findings underscored the importance of clear governance structures, accountability mechanisms, and adherence to financial best practices. The reforms that followed helped restore public confidence in the Crown Agents and set a precedent for handling similar governance failures in the future. The inquiry took four years to complete, marking a significant moment in public administration reform.

It was itself predated by the Fay chaired committee of inquiry, which recommended the setting up of the tribunal.