Wednesday 25 September 2013


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 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?


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.


Jac o' the North, said...

I too would have welcomed a statement on Returning Officer payment because this seems such a grey area. Does ayone know the rules? Are there rules?

Cneifiwr said...

There is a code of conduct, but it has nothing to say about this - not surprising I suspect, because it is unlikely that anyone else would have thought of doing it.

Returning officers seem to be a grey area because they are paid out of different pots for different elections - the Home Office, the council, and I think, the Welsh Assembly.

Anonymous said...

The Carmarthen Journal have a duty to report such information and to keep the public informed about what's going on, in an unbiased manner. If there is no reference to this information in next week's Journal, the paying public need an explanation as to why this is not being done.

Anonymous said...

How many more audits/investigations are needed before WAG step in?


Coastal-Regional-Project Managers- Group-Meeting-11th-July-2012

"WEFO have received a complaint that match funded staff in one area are undertaking ineligible activity."


WEFO Investigation

"Following a report submitted by Nadine we could be investigated by both the PIV and EFAT teams"

Anonymous said...

Is Friday's Council audit committee meeting open to the public Cneifiwr?

Anonymous said...

Heaven knows what rules survived the Blair/Brown years but payment in advance of a service being provided was always a big no-no according to the rules laid down in the bible Government Accounting.

Anonymous said...

This will be interesting. the story is on the BBC news website.

if it can make the BBC Wales news I wonder is the Carmarthen Journal is so full of alternative stories that it can ignore the story.

We shall see next week !!

Anonymous said...

My understanding is if someone makes a complaint to the fuzz and requests an external police force investigates (The Chief Executive of Carmarthenshire County Council is also Chairman of the Carmarthenshire Community Safety Partnership and works very closely with Dyfed Powys Police Force) and it will trigger a domino effect that'll bring the whole place down like a house of cards!

Cneifiwr said...

Anon @18.39 - yes, the meeting is open to the public. There will be some frantic behind the scenes activity before that kicks off.

Anonymous said...

Our opinion is not qualified in respect of these matters - Would it be possible for somebody to explain what this means please.

Is it there external auditers so cant really comment along those lines where as The Welsh Office didnt get back to them as it was legal...

Anonymous said...

Unfortunately "Teflon Mark" has form for wriggling out of these things by blaming others. I wonder if it won't be him but the lovely Meryl who carries responsibility as Leader of Council at the time? Who was he to say "no" to his "boss"?

Anonymous said...

This will be an interesting exercise in leadership. Will elected representatives try to restore the Council's reputation by taking a stand and seek suspension(s) whilst the unlawful matters are investigated further? Or will we see the usual closing of ranks, bluster and nose-thumbing at anyone who dares to criticise Carms CC. Bets anyone?

Anonymous said...

Was it Anthony Barrett's report that led to the suspension and arrest of the Chief executive and his deputy in Caerphilly Council?

Anonymous said...

Did not Mark James say in the high court libel case that he could not remember whether he was present in the meeting when he was given the money to counter-sue?

Anonymous said...

They can only close ranks for so long. I think the cat has just used up it's ninth life!

Anonymous said...

Better late than never, I suppose!

Anonymous said...

anon 00.19 - indeed it was.

The Carmarthen Journal has reluctantly published an article;
Hmmm...there's something about the title...

There is also an article in today's Western Mail but so far it's not online.

Anonymous said...

@anon 25-9-13 20:19
"Unqualified Audit Opinion - this type of report is issued by an auditor when the financial statements presented are free of material misstatements and are represented fairly in accordance with the Generally Accepted Accounting Principles (GAAP), which in other words means that the company's financial condition, position, and operations are fairly presented in the financial statements."'s_report#Qualified_Opinion_report

Anonymous said...

This BBC article from June say that the final costs of the counterclaim against Mrs Thompson were £41,000...

Anonymous said...

Here we go again with their toxic blame shifting! A few weeks ago temporary employees were blamed for CCC's long history of problems with grant compliance. Now in light of recent findings by the appointed auditor from the WAO, a CCC spokesman has the audacity to blame the WAO, a third party, a judge and an independent legal advisor for decisions made by Cllrs which the CEO accepted despite concerns raised by the public, AM, MP etc.

Cneifiwr said...

Anon @13.15 You are spot on. Why was Jacqui Thompson ordered to pay costs of £41,000 in respect of Mr James's counterclaim, but the auditor puts a figure of £23k on it. This is only one of a number of oddities to have come out.

Anonymous said...

How does this affect the appeal ?

Will there be more costs that the people of Carmarthen will have to pay - albeit unlawfully ?

Anonymous said...

The Carmarthen Journal article states that a Council spokesman said that there was no additional costs to the taxpayer with regards to the pension issue, yet the Council admits to seeking expert legal advice about both issues. Expert legal advice does not come cheap and therefore it seems it would have cost the taxpayer!

Anonymous said...

Good point Anon 17:15! How much more legal advice has the taxpayer forked out to line the pockets of fat cats?

Anonymous said...

Judging by the number of comments about this post, this whole issue is causing a big stir!

Anonymous said...

How much has Carmarthenshire Council spent on experts, consultants and legal fees for checking whether the indemnity and pensions changes were lawful? There's a few bucks there, I'm sure.

Also, whilst his new pension arrangements may not cost Carmarthenshire ratepayers a penny more, it sure as hell costs the Exchequer.

How ironic - Leader of the Labour party, Ed Miliband, has spent the past week talking about closing tax loopholes whilst his Labour colleagues in Carmarthenshire allow the most highly-paid chief executive in Wales to change his tax arrangements. Genius.