It's a shame the law wasn't around when the DWP were funding PACE.
That seems to be not relevant.
A few moments search implies that the official reason given for DWPs involvement was the fact that
https://en.wikipedia.org/wiki/Mansel_Aylward was Chief Medical Adviser, Medical Director and Chief Scientist of the DWP at the time.
https://www.ncbi.nlm.nih.gov/pubmed?term="Aylward M"[Author]
Neglecting anything else, at this time, it was 'reasonable' for the chief scientist to put funds towards a study that purported to be able to help with therapies of the sick, in order to get them off benefits.
Also
In 1918 Haldane's committee produced the "Haldane Report". The report suggested that research required by government departments could be separated into that required by specific departments and that which was more general. It recommended that departments should oversee the specific research but the general research should be under the control of autonomous
Research Councils, which would be free from political and administrative pressures that might discourage research in certain areas.
It could be reasonably argued that it's solidly within the remit of the DWP to fund research into getting people back to work - something that is not specifically a medical issue.
And in fact, a properly run PACE trial could have answered very simply the questions around APT and CBT. The real question is - was there any input from other than the researchers in the weakening of the PACE trial and its poor implementation as it went on.
I see absolutely no reason to suspect this - all you need is scientists skirting the boundaries of being too obviously biased in order to further their careers and shoddy peer review.
Peer review has problems - in general many peer reviewers do not carefully inspect every part of the document and they do not communicate to the other reviewers which bits they have not looked at. This can mean that relatively subtle effects (for example inappropriate statistical treatment of scales with nonlinear results) are completely overlooked, where as a rational peer review would at least ensure that someone has looked at every part of the paper, not just skimmed parts they did not understand.
It is interesting to note:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2359054/pdf/bmj00562-0061b.pdf
A letter to the BMJ from him on CFS in 1996.
(bad prognosis indicated by)
A managment regimen overemphasising the importance of complete rest or advocating a rapid return to pre-illness levels of activity
The letter is mixed, though shows even at this stage, thoughts around somatisation are in there.