Unlawful

Update 21.35

The media have been quick to pick up on this story, or rather parts of the media. The BBC and the South Wales Guardian deserve special praise. Tomos Livingstone gave a very thorough and accurate account on the news bulletin on Radio Cymru this evening.

The Carmarthen Journal has so far remained silent.


Update 16.50

Plaid Cymru has just issued the following statement:

"Commenting on today’s revelations that the appointed auditor of Carmarthenshire County Council’s accounts has considered two financial transactions of the authority to be “unlawful”, local Assembly Member and Plaid Cymru’s Shadow Minister for Local Government, Rhodri Glyn Thomas has issued a statement.

Rhodri Glyn Thomas AM said:

“Carmarthenshire residents will quite rightly be deeply concerned by the findings of the appointed auditor in that he considers two financial transactions by the County Council to be unlawful.

“For over three years Jonathan Edwards MP and I have raised our concern that taxpayers’ money was being used to indemnify the costs of the Chief Executive’s legal action.

“As a result, Carmarthenshire County Council’s Chief Executive has been the subject of questions to the First Minister of Wales and the UK Secretary of State for Local Government.

“The report’s findings in respect of two unlawful transactions justify the efforts that both Jonathan Edwards and I, as elected representatives, have put into this matter.  The conclusion of the auditor in respect of the indemnity vindicates our position over the last three years.

“The report is exceptionally damaging for the reputation of Carmarthenshire and I am firmly of the opinion that officials and elected members of the council’s Executive must be held accountable for their actions.”

_________________________________________

“

Sometimes in Wales it doesn't just rain....it pours.

The Appointed Auditor brought into look at Carmarthenshire County Council's Annual Statement of Accounts has highlighted two matters which in his opinion were unlawful:

Emphasis of matter – unlawful transactions 

I draw attention to the matters disclosed in note 6.50 to the accounts in relation to (i) remuneration totalling £16,353 paid to the Chief Executive in lieu of employer pension contributions; and (ii) £23,217 of expenditure incurred in granting an indemnity to the Chief Executive to bring a libel counter-claim against a claimant. These transactions are considered to be unlawful. Our opinion is not qualified in respect of these matters. 

The first of these payments relates to an arrangement which appears to be identical to a similar scheme operating in Pembrokeshire (see previous post), enabling the Chief Executive to opt out of the Dyfed Pension Fund and have employer's contributions paid to him directly, in what is no doubt a highly tax-efficient way.

The second payment relates to the probably unique constitutional amendment which enables council officers to apply to the council for funding to bring libel actions, contrary to the Welsh Government's rules which allow only for funding to defend libel actions.

Not included in the auditor's review is the very interesting arrangement which allows the Chief Executive of Carmarthenshire County Council to pay himself in advance for the work carried out in his capacity as Returning Officer. As we saw last year, Mr James paid himself an advance of £20,000 or thereabouts before nominations for the 2012 council elections had even closed.

When questioned, the council admitted that it was not sure exactly when the payment had been made, and also seemed confused about how much money was actually involved. 

It will come as no surprise to learn that the council run by Mr James disputes the auditor's findings.

A meeting of the council's audit committee is scheduled for this coming Friday, and should for once be an unmissable event.

One of the interesting questions in the coming weeks and months will be the role played by the council's Executive Board and senior councillors who approved all of these various special arrangements, albeit with the advice and guidance of senior officers.

Will heads roll, and if so how many?

Postscript

It is probably worth clarifying that the auditor referred to above is not the same as the Wales Audit Office which is currently also looking into the legality of the indemnity and in particular the legality of the way in which the indemnity was awarded (behind closed doors in secret, with no declarations of interest and in the presence of Mr James as part of a meeting of the Executive Board, but without being advertised on the agenda).

The WAO has been investigating what are believed to be three separate complaints about this for more than 6 months, and is due to report back soon.

It will be interesting to see if any of this makes it into the pages of the Carmarthen Journal. If not, Private Eye will probably have something to say in its Rotten Boroughs column.