Tuesday 1 October 2013

Because they're worth it

Following a meeting of Pembrokeshire's Corporate Governance Committee where the ruling Independent group used its majority to sign off the council's accounts for last year despite a unanimous opposition, the leader of the Labour group on the council has called for an extraordinary meeting of the council to suspend the chief executive, Bryn Parry Jones, pending the outcome of investigations into the pensions scandal (see Jacob Williams).

Anyone expecting the Labour leader in Carmarthenshire to follow the lead taken by his party colleague, Paul Miller, will probably be disappointed because logic would dictate that Kevin Madge would also have to suspend himself since he was deputy leader of the council at the time the scheme was approved.

The BBC's latest report on the Carmarthenshire and Pembrokeshire pensions scandal tells us that lawyers representing the Wales Audit Office and another legal team representing the two councils jointly will meet later this week to discuss the issue.

We know from what Pembrokeshire's councillors were told at a meeting of the Corporate Governance Committee on 30 September that the two councils jointly commissioned independent legal advice in August of this year.

Whether there was any cross-border collaboration before that remains unclear, but as Jacob Williams pointed out in a previous post, the two neighbouring authorities have effectively created a tax haven for top earning public sector employees in South West Wales.

There is also growing evidence to suggest that the public, press and councillors have been misled on a number of important points.
  • A key condition of the scheme in Pembrokeshire was that the council would not incur any additional costs as a result. Councillors were told yesterday that the council had not sought independent legal advice before implementing the scheme. In Carmarthenshire the council has gone on record that it commissioned both independent financial and legal advice before it approved the dodge.
  • The lawyers' taxi meters are still running because we can take it for granted that the posse of council legal representatives heading off to meet the WAO will include specialist external advisers.
  • Unless both councils capitulate very soon, and nothing in their track records suggests they will, the legal bills will go on and on rising, as taxpayers in Carmarthenshire know only too well from all of the other "won't cost the council a penny" schemes.
In its statement to the press, Carmarthenshire County Council spun the line that this pension arrangement is commonplace. "We believe that there are numerous other employers including local authorities, universities and housing associations who have adopted the same practice".

Of the 22 local authorities in Wales, only two have implemented the scheme.

Here's Carmarthenshire's Ministry of Spin again,

"The situation has been brought about by changes in tax rules which make it difficult for people earning above a certain level to remain in the occupational pension scheme."

So why is it that employees in the other 20 local authorities have stayed in their local government pension schemes?

The council's statement goes on to say the policy "could apply to any member of staff so affected and is not restricted to or designed for any individual member of staff".

Did you hear that, all you teachers, bin men and dinner ladies? Provided you are earning more than, say, £160,000 a year, you can join in too! At least Pembrokeshire County Council was honest enough to say that it only applied to a handful of senior officers.

Together Pembrokeshire and Carmarthenshire employ more than 15,000 people, but we know so far of only three people who have taken up the scheme, with a possible fourth in the form of Carmarthenshire's Director of Regeneration, Mr Dave Gilbert OBE, whose employer pension contributions are also recorded as NIL.

In one other respect Pembrokeshire has been a little more transparent than its neighbour. We know that the special tax arrangements were signed off by a meeting of the council's Senior Staff Committee in September 2011, albeit behind closed doors in the chief executive's private office without any declarations of interest, and without publicising a notice advising would-be public observers that the discussion would most likely be subject to a public interest exemption.

Searches of the online records of meetings in Carmarthenshire have so far failed to turn up any reference to the implementation of the scheme, although the council's press office has gone on record to say that "the Chief Executive was not present in the meeting in which this decision was reached and did not offer any advice to the councillors making the decision."

Perhaps Carmarthenshire's Executive Board approved the scheme under cover of one the other items it was discussing at around this time. These included invasive non-native plants and the (top secret) proposed transfer of public toilets to community councils.

The only record which comes close is a minute from a meeting of Carmarthenshire's Executive Board held on 20 June 2011 under the chairmanship of Meryl Gravell.

The Executive Board was shocked to read a press release issued by the Welsh Local Government Association that there were to be hefty rises in employee contributions towards local government pension schemes from April 2012.

The Chief Executive said he felt these increases were unnecessary as he pondered the plight of members of the Dyfed Pension Fund, forgetting to mention that he was almost certainly contemplating an opt-out by then.

1 comment:

Anonymous said...

If these tax arrangements were kosha then why has the Society of Local Authority Chief Executives and Senior Managers (SOLACE) not come out in Bryn Parry-Jones and Mark James' defence?