Matthew Norman: Nothing succeeds like lack of success

With the Gold Cup off at Cheltenham this afternoon, thoughts turn to the central importance of the form guide. Has the animal been tried over course and distance before, we ask ourselves, and is it a trier or a makeweight? Most crucially, how did it perform last time out?

What goes for jumping horses goes also for the thoroughbreds of Whitehall, so in seeking to pre-empt Sir Hayden Phillips's newly published and hilariously inconclusive "interim assessment" on the funding of political parties, it was always worth a glance at his own recent form over course and distance.

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Two years ago, this semi-retired and extremely civil servant - a man so smooth, by all accounts, that you could lay him headlong and use him as a snooker table - produced a report on improving the honours system. Then permanent secretary at the Department of Constitutional Affairs, he opened this document with a letter to Cabinet Secretary Sir Andrew Turnbull, stressing the need to "encourage a more open and independent system".

Doubtless Sir Hayden (or plain "Hayden" as, by nimble way of underlining his own independence from the Whitehall machine, he signed that letter) meant well. But even Sir Humphrey Appleby at his most creatively euphemistic would struggle to persuade anyone that Sir Hayden's report was a tremendous success.

A year after its publication, Yates of the Yard bent his knees and offered his first, cheery "Evenin' all" in Downing Street's direction. If the system had become more open, this was because it had been blown wide open by donors such as Dr Chai Patel, singing like scandalised canaries about not being properly rewarded for their altruism towards Labour.

For Sir Hayden's report had, alas, been wilfully, magisterially and absolutely ignored by a Downing Steet bunker, which thanked him for his services before sending Lord "Squealer" Levy back on court to reprise his legendary doubles partnership with the Prime Minister. You may recall the "Old Tennis One-Two", the classic grift whereby Squealer would tell the sucker, or "mark", that the PM might pop along for a game, and Mr Blair would duly arrive for a set or two.

The minute he'd left, his little lordship would cash in on the mark's beatific joy at being patronised by the great world leader by tapping him up for a large cheque, possibly or possibly not hinting - that, members of the jury, may one day be a matter entirely for you - that the receipt would eventually arrive in the form of an ermine robe.

We might also touch here on the desperate dash to the then-Labour chairman Ian McCartney's hospital bedside to get him to sign off party accounts by Ruth Turner and a colleague, pointing out that the only open thing about this was the heart surgery that had left Mr McCartney hovering between life and death, but that would be unnecessary. The fact that the tennis court grift had survived Sir Hayden's 2004 report adequately hints at the impact it had on Number 10.

Nothing succeeds in Whitehall like lack of success, so naturally Sir Hayden's failure to have any improving effect on the honours system was rewarded with a request from Mr Blair to consider the incestuous issue of political funding. Here's a chap, the thinking presumably went, who has just spent 12 months doing what the silkiest of mandarins do best, which is producing long and tedious documents everyone can merrily ignore. So let's sign him up to spend another 12 months pussyfooting around the issue in velvet slippers, secure in the knowledge that he won't try to impose any unpleasant conclusions.

And would you believe it, he hasn't. Yesterday's interim assessment could be précised in the sentence: "Erm, buggered if I know what to do next." Sir Hayden has evidently hit the phones and worked the smoke-free rooms of Westminster hard to broker a deal, but for slightly differing reasons neither the Tories nor Labour will make the necessary concessions.

Labour won't brook the idea of restricting individual donations to £50,000 because this will limit its trade union backing. The Tories, although keen on such a cap, won't countenance attempts to restrict the sort of blitz-spending in marginals that forms a key plank of their electoral strategy.

So when Sir Hayden gloomily reports that imposing limits on political campaigns and caps on individual donations remain "obstacles" to agreement on party funding, we turn to the "O" section of our Mandarin-English dictionary to find that, in this context, "obstacles" translates to "Jesus, what I have got myself involved in this time?".

However, only when we find the Prime Minister welcoming the report, saying, "It shows very clearly that there is now the basis for a new agreement blah blah blah", do we realise what a hopeless waste of time all this has been, and suspect what an unsatisfactory compromise will emerge when Sir Hayden has passed another few months coaxing and cajoling him and David Cameron into a deal.

The obvious question here, it strikes me, is why these leaders still have any influence whatever over how their parties are funded. Whatever prosecutions result from Mr Yates's investigation (if any), we all know exactly what Mr Blair was up to.

It seems a peculiar distortion of natural justice, even by British standards, that those whose misdemeanours have compelled a system to be changed are allowed the final say on how it changes. You might as well go to HMP Belmarsh and invite a pair of serial killers to exercise power of veto over new sentencing policy.

Without wishing to flog a dead equine metaphor, Sir Hayden looks tired, under pressure and unlikely to get the trip. If so, who can blame him? Jumping obstacles in dodgy ground is gruelling for even the gamest runners, but it must be particularly wearying for a man who has spent 40 years cooing, "Oh, absolutely right, minister" to find himself engaged in a form of conflict, however mannerly, with the incumbent Prime Minister and odds-on next PM-but-one.

Perhaps this is the time to pull himself up and admit defeat, publicly confessing that a Whitehall fossil like himself is the very last creature on earth capable of imposing a just solution to such a conundrum on those he has spent a lifetime serving. If he continues with the cosy chats, and eventually rubber-stamps some grubby compromise, he will surely be rewarded with a peerage, which would at least put a pleasingly holistic lid on the matter.

But no one outside Westminster, and very few within, will have any appetite in the ensuing fudge, and Sir Hayden will return to retirement, having played his part in the betrayal of the precepts of openness and independence to which he was so passionately committed back in 2004.

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