23 December 2010

Christmas is a time of giving. Whether reflecting age old customs, religious rites or marketing pressures,  we mark the year end with parties and gifts for family and friends.  There tends to be more partying than gift giving within work places, but gift giving by suppliers to their client businesses has become widespread.  The rationale is clear – to maintain relationships with customers and show appreciation for their custom.  The motivation is commercial  – it isn’t personal. The costs are deductible expenses; rarely are they personal and paid from after-tax income. Gifts and hospitality are commonly given to decision makers – those with the discretion to decide where purchases will be made.

And that is why State servants must be careful in their readiness to accept goodies distributed during the festive season. Principles about the acceptability gifts and hospitality do not change because it is Christmas. Guidance from the Office of the Auditor General has continuing applicability. We should discourage gifts of more than nominal value. But more importantly, we must remain alert to the commercial motivation behind giving, recognise the unavoidable sense of obligation that beneficiaries of gifts experience, and ensure that we follow our agency policies for transparency. Gifts need to be declared and openly registered.

This may be the last year when British businesses distribute Christmas largess. When the Bribery Act  comes into force next year, giving anything of substantive value could be considered an unlawful inducement. Comments by a Price Waterhouse Coopers spokesperson about the legal implications has been widely reported. From 1 April businesses will need to have a “corruption sniff test”  and ensure that gifting is not a reward for an “improper performance of a relevant function”.