Tuesday 26 June 2012

Auditors, ombudsmen and councillors

Over the last few years quite a few residents of Carmarthenshire have decided to take their concerns about Carmarthenshire County Council to the Wales Audit Office, and all have found that their hopes of persuading the authority to take action have ended in disappointment.

Several years ago the Carmarthen Journal told readers that an investigation of the council's planning department by the Audit Office was about to be undertaken, and the office received quite a few letters from citizens outlining their grievances as a result.

The auditor replied to Cneifiwr's complaints about the handling of a major planning application with a brief letter written on what looked like recycled lavatory paper (top marks for economy). The letter said in a tone which mixed surprise with exasperation that the Audit Office had received a significant number of unsolicited letters complaining about aspects of the council's planning function, apparently in the belief that an investigation was about to be undertaken.

This was not the case, it added. The auditor was merely contemplating whether an investigation was warranted, and needless to say the conclusion was that despite the unsolicited letters from various victims and aggrieved citizens,  no action needed to be taken.

Interestingly, as Caebrwyn has discovered, the Public Services Ombudsman for Wales has taken a rather different view.

More recently, a couple of people felt moved to write to the WAO to question the council's decision to pump almost £1.5 million into the Towy Community Church's 10 pin bowling alley at a time when it was making cuts to all sorts of other services, including libraries, school music schemes, support for the Welsh language, museums, road maintenance, etc.

The responses came, it turned out, from the appointed auditor for Carmarthenshire rather than the WAO itself, and carried with them the unmistakable whiff of County Hall where a ghost writer appeared to have been at work.

The auditor told the residents that the Council has "the power to do anything which it considers is likely to achieve the promotion or the economic well-being, the social well-being and the environmental well-being of its area", wording taken from the Local Government Act 2000.

Further, all decisions had been correctly made at the appropriate level, and the grants awarded by the council "will have met" the prescribed requirements for each scheme, they were told.

The "will have met" bit is interesting because it suggests that the auditor was either assuming that this was the case or had been told by the council's officers that that was so.

In other words, the auditor took the council's word that everything was OK and above board.

What about the council's duty to ensure that public funds were not being wasted? Well, the disposal of an asset which had been "independently valued" at £750,000 (although the book value was £835,000) fell within the threshold of the General Disposal Consent of £2 million which meant that the Council was able to avoid the legal requirement that it disposes of any land at best consideration. So it was OK to use £835,000 of public money to give to a small church (strictly speaking it is a 99-year lease at a peppercorn rent, but the council treated it as a disposal) because in the council's view it is likely to achieve the promotion or the economic, etc. well-being of its area.

Ironically at about the time the councillors voted to approve the latest funding package for the church, the council was also finalising its budget proposals and a huge swathe of cuts to all sorts of services.

Whenever the council is challenged about hikes in charges in leisure centres, the closure of libraries, public lavatories, cuts in funding for Mentrau Iaith, etc., it always responds by telling us that it has no statutory duty to provide any of these services.

Of course it has no statutory duty to ensure that Carmarthen has a 10 pin bowling alley either.

Next up was Caebrwyn who had previously been assured that the auditor would be monitoring the costs of the libel case between her and the Chief Executive.

You can read about the response she received here, but it was made clear to her that the appointed auditor was not subject to the Freedom of Information Act, and that any information he divulged would be at his discretion.

The whole point of having external auditors of local government is surely (a) that they are independent, and (b) that they perform their duties in a transparent and open way in order to assure local people that their councils are both acting within the law and using public money efficiently and effectively.

The locally appointed auditor system certainly fails the second of those two tests, and there is reason to wonder in the case of some locally appointed auditors just how independent they really are from the local authorities they are supposed to be monitoring.

Just as the Towy Church project rests on that catch-all clause from the Local Government Act 2000 (promoting the economic well-being, etc.), so the Caebrwyn libel case appears to rest on an equivalent clause from the Local Government Act 1972 which says that,

a local authority shall have power to do any thing (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions.

The implication here is that Caebrwyn's blog is somehow preventing the council from discharging its functions, although as the decision by the Executive Board was subject to a public interest exemption, we can only speculate as to how her blogposts are jamming up the wheels of local government.

The libel case itself has been grinding slowly along for over 6 months now, and it will be almost another 6 months before the case goes to court. Obviously, the lawyers' meters are ticking away, and costs at this early stage are already known to be in excess of £60,000 before anything much has happened. By the time the case has been heard and any damages awarded, the sums involved could well be astronomical.

A timely illustration of what this could mean comes from a recent libel trial involving a student who sued two national newspapers for making false claims about his participation in demonstrations against education spending cuts. The trial ran for just 5 days, and the judge issued an order for the two newspapers to make an interim payment of £450,000 to meet the claimant's baseline legal costs. The final figure is likely to be higher and excludes damages awarded to the claimant, Luke Cooper. A summary can be found here.

The council will be insured in the case of its defence of Caebrwyn's claim, but it is almost certainly not covered for the costs incurred in its counter-claim. If the council loses, those costs will come directly from public funds, and an interesting question in this regard will be how the council's costs are apportioned, especially since the same counsel is conducting both the defence and the counter-claim. We can be sure that the council's insurers will be keeping an eagle eye on their exposure.

The question is whether the external auditor is paying as much attention to the taxpayers' exposure as the insurers are to their likely share, and what if anything he might do to protect us.

Nothing that the auditor has done in recent years can give us much comfort on either score, and as Caebrwyn has discovered, the auditor does not have to tell us anything because he is beyond the reach of the Freedom of Information Act.

The case law on which the County Council is basing its counter-claim relates to a libel case involving Bedford Borough Council and a Conservative Party election agent. There the district auditor decided to intervene after the libel case had been settled to object to the use of public funds in pursuit of a libel claim, and that extremely belated response by the auditor played a significant part in the judge's decision to dismiss the auditor's claims.

Will Carmarthenshire's appointed auditor learn from the Bedford case and intervene while time is on his side? Will he warn the Council against pursuing its counterclaim and the risk of a huge financial hit? Will he seek to impose any limits on the Council?

Well, we can but live in hope.

There is a draft Audit Office (Wales) Bill waiting to go before the Welsh Assembly which might just tackle this mess by making the WAO directly responsible for local government, but by the time that hits the statute books, the dust will have settled on the libel case.

Perhaps the biggest lesson is that all of these desperate appeals to ombudsmen and auditors would not be necessary if our elected councillors found the courage to say no a little more often and remembered that every pound given to the Llanelli Scarlets, Towy Community Church, the chief executive's libel fund and all of the other worthy causes means a pound less for our existing museums, leisure centres, school music programmes, support for the Welsh language in the community, etc.


Nospin said...

you of course are right, until the councillors of this council grow some and stand up to the executive nothing will change.

What disturbs me is that a CC is above all law and other bodies, WAG (local goc min), Welsh Auditors, this can't be right. Under these circumstances unless you have conscientious and competent councillors you are open to a take over by "professionals", WHERE ARE THE DEMOCRATIC CONTROLS??.

Anonymous said...

A question would be, what if the Chief Executive is successful in his libel claims? Would the financial award go back into the Council's account or in his personal bank account?

Cneifiwr said...

Actually, that is a very good question. The answer is that we don't know because the meeting which decided to fund the case was held in secret.

As with all official meetings, the agenda was published in advance, and the libel case was not listed among the items for discussion, even though proceedings were initiated 2 months before.

Anonymous said...

Not only was the meeting held in secret, according to the published minutes Mark James didn't declare a financial interest and remained in the meeting whilst this decision was made.

Anonymous said...

good question as to where any financial award would go if Mr James is successful in his claim. If he was awarded damages and it went to him personally then he shouldn't have used taxpayers money to bring the claim - and if it went into council coffers then they would be guilty of circumventing the rule that a governing body cannot sue for libel. This is clearly a very complex case.

Anonymous said...

"Future of Local Public Audit - Department for Communities and Local Government Consultation - Audit Commission Summary Response 2011"
This report is interesting, as it is really about the Audit Commission justifying their existence (and their employees' jobs). It goes on a bit, but most relevant to this particular post are the following statements:-
"We also help public bodies manage the financial challenges they face by providing authoritative, unbiased, evidence-based analysis and advice"
"Independent external audit is an essential part of accountability for the stewardship and use of public money, underpinning confidence in the conduct of public business".
Oh really?
What a shame these assertions don't correspond with the observation and experience of so many, including those referred to in this post.

johnsouthwales said...

My own experience with the ombudsman came about in 2008 regarding certain situations surrounding grantwork and another work during 2007 plus some involvement regarding a county councillor.

It did come to some surprise that it was mentioned that a meeting took place with residents, and even more suprising this mentioning was copied into a letter to me (even though I was not party to this meeting). And what was even more alarming, another resident was not granted this mentioning as deserved.

A 79 year old pensioner with angina and other ailments, was having bathroom work done at the home, and horrors of horrors, the work was botched. All the brand new tiles had to be stripped down and thrown away, £700 was lost. Trading standards were contacted and they mentioned something I was unsure of, and I requested clarification of what the officer said to me on a number of occasions, but there was no response. Why?

Ever wonder why rogue traders exist?
Basically, If someone takes a trader to small claims court, they have got to supply evidence from an independent source. Any solicitor will tell you this report is crucial. Without it, there is no case. Numerous photographs and a letter from the trader admitting his work was not up to standard. It is no good getting another builder in offering evidence because that doesn’t eliminate the conflict of interest, so a report was required from a surveyor, and they do not come cheap. And the cost of the report was not covered in a claim. It was have cost a further £700 to take the trader to court to claim £700. anyone see what could happen here?
in the event of being awarded, there is no guarantee that money will be paid back. A trader could plead poverty and offer to pay £20 a month for the next 3 years, and payments stop after the first month. In other words £700 would have been spent to claim back £700 and still no bathroom. And if in the case of the trader not paying, another £700 would have to be spent to redo the bathroom he botched. In all over £2100 would have to be spent.

What trading standards said was that I could use the estimates supplied by other traders later to act as a report. I queried this as it offered some hope but needed to be checked out. The problem was the word could, as if it was summising a faint possibility. Personally I was not interested in words such as could, maybe or if. Either a yes or a no was the only acceptable term.
Eventually trading standards advised me to contact the small claims court in Llanelli for information to my question. Why were they diverting me to them? Plus the number they suppied was not a telephone number, but a fax number.
When I rang the court, they were wondering why I was phoning them, and mentioned two things to me. trading standards should not have given that advice and secondly they are not legally trained to answer my question.
A letter was sent to trading standards manager and one question remained unanswered. Trading standards visited the trader late 2007 and in feb 2008, the trader caused further damage at another lady’s house amounting to thousands of pounds.

A complaint went into Carmarthenshire county council, and I asked what are you going to investigate? The reply was all of it.

john said...

grantwork, carmartenshire care and repair. who are they? care and repair cymru as in their literature are an umbrella body. so who are they? who do you actually go to if there was a concern?... look it up.

in 2007, work was carried out again at the same pensioners home, and it was of no satisfaction plus they didn't do the other work that was on the schedule.
a cc emplyee even had the nerve to say to accept the defective work. i could not believe what i was hearing. somehow a 79 year old pensioner signed for something that she may not have known what the form was. as i remeber, care and repair said it was just a form to say the grant officer had called around.

the complaint went into care and repair, and the reply was that they are not going to take up on the complaint.

the contractor agreed that the work was to be redone and when the time came, no work took place. there was a mention of repaying all the grant money.

the work is fit for the skip. so just how much public money has been wasted?

so, how is care and repair structured? the chair of carms care and repair is a certain male. the corrspondence email address is a ccc address. a council officer.
when i was supplying him with the details, he was basically sending it back to care and repair... and ended up going around in circles.

ombudsman response - it was not their remit to investigate

Cneifiwr said...

John - thank you for the comments you sent yesterday. I have published two of them above. Please could I ask you to keep comments as brief as possible. The software makes it difficult to read very long comments. Ever thought about starting a blog of your own?

johnsouthwales said...

apologies for the length. thanks for publishing the trading standards situation but sad to see the outcome is not published as well as that was the whole point of the excercise and revelation for other readers to make their own conclusions. it was obvious the council did not investigate thoroughly

johnsouthwales said...

when the council complaint was not investigated and tafter the ombudsman was contacted, here is the ombusman's findings - i understand you consider the responses insufficient.i am however unable to agree that this is the case. carms cc letter refers to a full review..and that
you had been offered correct advice.

so how come after investigating a question posed to trading standards anager remained unanswered. plus the council said there is no record of me being in contact with a particular person, as i had to remind him so, as a new reply came stating apparently i was in contact after all.

if they had investigated throroughly they would have known i spoke to in the first place