Needless to say, there are sadly exceptions in the public sector. Government policy on nepotism applies to official appointments - not to ministerial appointments. Ministers can, and do hire friends to head inquiries, appoint their mates to the House of Lords and can personally intervene in the choices of heads of QUANGOs and so on.
It's a shame. I strongly believe that the country would be better governed if the cabinet were more than just a bunch of Dave Cameron's mates from school.