The Audit Committee Meets

Update

The BBC's latest report on the pensions opt-out can be found here. Significantly it says at the very end of the piece that the WAO is not aware of any councils other than Carmarthenshire and Pembrokeshire operating such a scheme.

_______________________________

As headlines go, that has got to be one which trainee journalists would be told never to use, but we live in strange times in Carmarthenshire, and audit reports are rapidly becoming more interesting than sex in these parts. Well, perhaps not.

Cneifiwr was unfortunately unable to attend, and sadly the council's filming pilot does not yet extend to committee meetings, so what follows has had to be pieced together.

The primary business before the committee was to review the report of the Appointed Auditor, Mr Anthony Barrett, who also happens to be the Assistant Auditor General for Wales. Mr Barrett it was who triggered the collapse of the house of cards in Caerphilly when he produced a report which concluded that pay rises for the chief executive and 20 other senior managers were unlawful.

Events in Caerphilly have taken another turn today (see Western Mail report here), with Mr Barrett concluding that one-off payments totalling a reported £218,000 to compensate senior council officers for the loss of car user allowances were also unlawful. More on this another time, but back to Carmarthen.

Overall the auditor's report praised the county council for its financial management, but there were two serious bones of contention in the form of the chief executive's libel indemnity and what we can now call the pensions scandal.

All of this was a little too nit-picky for the vice chair, Cllr Giles Morgan (Ind), who proceeded to give a demonstration of why Carmarthenshire County Council has got itself into such a mess with a speech showering the council's officers with praise. The Three Wise Monkeys are alive and well in this part of the world, and one of them represents Swiss Valley ward.

Fortunately there were some councillors willing to probe and ask awkward questions, with Cllr Alun Lenny (Plaid) making a particularly strong showing despite being a substitute member.

The council's Head of Law, Mrs Linda Rees Jones, was on hand to try to steer the council's ship of state around the jagged rocks, and she intervened in proceedings at several points. As far as the libel indemnity was concerned, this was a legal question and not one for discussion by the audit committee, seemed to be the gist.

The upshot of this part of the meeting was that there is currently a legal stand-off between the council's lawyers and the WAO, and matters will be left to take their course.

As far as the pensions scandal is concerned, there will be a full investigation of just what happened, and in particular who initiated the process which led to the chief executive (and most likely one other senior officer) receiving the employer's pension contribution as part of their salary.

Sir David Rowell Lewis, the recently appointed external member of the committee, played a key part in a discussion on the sign-off of the council's accounts. Mrs Rees Jones was all for getting the committee to sign off the accounts on behalf of the council, whereas Sir David wanted to know whether all council members had been involved in approving the two items of expenditure which the auditor deemed to be unlawful.

This being Carmarthenshire, the answer was obviously not, so he suggested that the wording on the report should be changed to "the Executive Board on behalf of the Council".

The neat little amendment places responsibility fairly and squarely with the people who actually approved the pensions tax dodge and the libel indemnity.

For the first time in Carmarthenshire delegation of powers turned out to be a double-edged sword. Or as Stanley Baldwin had it, "Power without responsibility - the prerogative of the harlot throughout the ages."

__________________________________

In a separate move, Rhodri Glyn Thomas AM has called on the Local Government Minister to make a statement on the pensions scandal. The full text of the Plaid press release can be found below:

Local Assembly Member and Plaid Cymru’s Local Government Spokesperson Rhodri Glyn Thomas AM has today (27/09/13) tabled an urgent question to the Local Government Minister calling on her to make a statement on what he calls a “pensions scandal” in west Wales.

The action by Rhodri Glyn Thomas comes after the Wales Audit Office refused to sign off Pembrokeshire Council’s accounts over payments made to senior council officials. The WAO has also confirmed that Carmarthenshire Council carries out a similar practice which it considers to be “unlawful”. The payments enable the councils’ highest-paid staff to leave the Local Government Pensions Scheme, receiving a cash equivalent of the employer's pension contribution, for tax reasons.

During a meeting of Carmarthenshire Council’s Audit Committee today, WAO has referred also to an “unlawful” expenditure in which the council’s chief executive was indemnified by the council for his libel counter-claim against a county resident.

The Carmarthen East and Dinefwr AM has previously taken action on senior pay in local government.  In June this year, he successfully forced the Welsh government into a u-turn to bring about independent assessment of senior council officers’ salaries as part of the government’s Local Democracy Bill.

Mr. Thomas commented:

“This is the latest in a long line of scandals around senior pay. We are in an age of austerity and local government workers, who keep our vital services functioning, need to be reassured that those at the top are not getting special treatment.

“The idea that you can opt out of the pensions scheme and get payments instead, is of dubious legality. Further, it undermines the wider scheme. It says to the workers that the highest paid officials are not going to be paying their contributions in and contributing to the pensions pot.

“The Wales Audit Office considers the actions of both Pembrokeshire and Carmarthenshire Councils to be unlawful.  The Welsh Government needs to make a statement on whether it agrees with these damaging pensions opt-outs, and whether it believes they are legal. We need to know if this practice is happening in other public services.”

Constituency colleague, Jonathan Edwards MP added:

“In the case of Carmarthenshire council the opinion of the Appointed Auditor is very clear – he considers two expenditures relating to the Chief Executive to be unlawful.

“Carmarthenshire residents need answers.  What advice was sought about the legality of these two expenditures?  How much did that advice cost county taxpayers?  Who took the decision to approve the Chief Executive’s new pension arrangements?  Who is accountable for these decisions?

“As the teams of lawyers from both the Audit Office and the council go back and forth debating the legality of the actions, how much more will this cost county taxpayers?

“It seems as if it’s another day and yet another question mark hanging over county hall. 

“Carmarthenshire needs a political reboot and an end to what I consider to be too cosy a relationship between the ruling Labour and Independent Executive and the council’s senior management. 

“The residents of Carmarthenshire deserve nothing less than a full investigation into how almost £40,000 of public money has been spent unlawfully.”