31 December 2002

All mighty

A couple of weeks ago I wrote that County Council Leader Maurice Hughes now has the sole power to elect local authority representatives to the boards of school governors.
A reader has pointed out that this is only a partial account of His Leadership's powers and referred me to the minutes of the Cabinet meeting of 27 May 2002 when the Leader was given absolute control over all the authority's appointments to outside bodies.
My correspondent also directs me to the Cabinet minutes of 2 December 2002 where it is reported that the Leader had appointed himself and his Cabinet colleagues Roy Folland and Bill Hitchings to the Local Health Group; the influential body which will take over responsibility for GPs and other primary care services in Pembrokeshire on 1 April 2003.
The reason for the presence of County Councillors on these new bodies is to "bring them closer to the people" and "make them more inclusive and accountable to stakeholders" and whatever other fashionable politico-speak you can think of.
Quite how this is achieved by appointing Messrs Hughes, Folland and Hitchings is not altogether clear.
I would venture a guess that, if the people of Pembrokeshire were given the opportunity to elect representatives to the Local Health Group, these three wouldn't feature in the first hundred.
After all, does anyone know what are their policies on health?
What we do know about them is that Hughes, as Leader of the Council, and Folland and Hitchings, as recent Chairmen of Social Services, presided over the deteriorating situation that led to a highly critical auditor's report on that department.
Interestingly, Hitchings has previous form, as Chairman of Dyfed County Council Social Services Department, when the District Audit Service hauled it over the coals back in the early 90s.
One of the criticisms in the most recent report was the "lack of political leadership" by um, er, the three political leaders who now represent us on the Local Health Group.

 

Constitutional monstrosity

 

Recently, I toddled along to the Kremlin On Cleddau to attend the County Council's pre-Christmas meeting.
Since the introduction of the Cabinet system and the abolition of democracy, Council meetings have ceased to provide the high level of entertainment for which they were once justly famous.
How I longed for a good old-fashioned row, or a debate, even.
Things started promisingly with the Lib Dems spoiling for a fight over the recent meeting of the Corporate Governance Committee (CGC) where three notices of motion submitted by Cllrs Bill Philpin and Joyce Watson, proposing amendments to the constitution, had been discussed.
Lib Dem leader John Allen complained that the wording of the notices of motion that appeared on the agenda for the CGC differed from those originally submitted.
"That matter was dealt with at CGC", Chief Executive Bryn Parry-Jones told him curtly, "and it is not an issue that can be taken from the floor [of the Council Chamber]".
"Then, how do we get these matters discussed"? asked Cllr Philpin.
The answer was: you didn't, as the Chairman Leslie Raymond gave the order to "move on" while Cllr Philpin protested that it was "most unsatisfactory".
Concluding the discussion, His Leadership, Cllr Maurice Hughes, said "It's a pity members don't read the constitution then we wouldn't have this problem".
Well, Old Grumpy has spent many hours reading this document and I must say it is so poorly drafted that I am still not sure as to its effect.
Article 4.02, for instance, states that: "Only the [Full] Council will exercise the following functions (a) adopting and changing the constitution".
But, at Section 3 B2, under the heading "Corporate Governance Committee" it says that the committee "… will exercise the following functions: 2. To monitor and review the Council's constitution".
That seems highly ambiguous to me.
The way it works in practice is that a member seeking to change the constitution submits a notice of motion to the Full Council.
This notice of motion is then automatically remitted to meeting of the CGC for consideration.
At that meeting, at which the proposer of the motion has no right to speak, the committee are presented with a report from the Head of Support Services on the merits of the proposed amendment.
If the CGC decides against accepting the amendment then the motion falls and that is the end of the matter.
At this point I should say that the CGC consists of 12 members; eight from the ruling Independent Political (sic) Group and four from the minority parties.
The eight Independents are made up of The Leader and three of his Cabinet colleagues, and the four Chairmen of the Scrutiny Committees.
What is interesting about this omnipotent octet is that they all owe their positions, and their lucrative special responsibility allowances, to the patronage of the Leader - the equivalent to the Government's payroll vote, in fact.
So, if the Leader doesn't favour the amendment, it has zero chance of success.
But what is truly amazing is that the CGC appears to have the power to reject a proposed amendment without further reference to the Council.
That has the surprising result that a proposed amendment to the constitution will not be adopted, even though it may have the support of a majority of Full Council, unless it first finds favour with Maurice Hughes and his cronies.
I cannot believe that, when it passed this legislation, the Welsh Assembly intended to give birth to a constitutional monstrosity in which the members of a small, power-hungry clique would be able to veto changes aimed at curbing their own power.

 

Wishful thinking?

One of my golden rules is never to make predictions, particularly about the future.
Like all rules this one is designed to be broken.
So I have been looking back at my past prognostications to see how I got on.
I notice that this time last year I was confidently predicting that 2002 would be the year I would get to wear the coveted England Grand Slam sweater.
Unfortunately, France put paid to that ambition.
Indeed, on closer inspection, I notice that I have been prophesying an England clean sweep for the past five years at least.
For no better reason than that the law of averages would appear to be on my side, I again presage English dominance in the coming campaign.
And a World Cup jumper for Sundays.

 

Best laid schemes...

Kirkaldy-born Adam Smith is famous as the father of the law of unintended consequences, or, as his fellow Scot Robbie Burns was to later put it: "The best laid schemes of mice and men gang aft agley".
As Smith observed, an economic system is made up of dozens, if not hundreds, of connected parts, and that a change in one factor is likely to have unforeseen, and often unpleasant, effects elsewhere.
This led one economist to liken the economy to a balloon - you squeeze it in one place and it expands in another.
To give a simple example: lowering interest rates in an attempt to boost business may trigger an unsustainable bubble in house prices.
This is why, despite the use of sophisticated computer models, even the second most famous son of Kirkaldy, Gordon Brown, finds it devilishly difficult to keep the economy on an even keel.
The trade union Amicus, concerned at the closure of final salary pension schemes, is suggesting that legislation should be introduced to compel all employers to pay a flat rate 10% of a worker's wages into a pension fund.
As old Adam would have pointed out, this would be self-defeating because it would depress the very company profits and share prices on which the pension funds depend for their financial health.
Indeed, the current crisis in occupational pensions is due, almost entirely, to falling share prices and dwindling profits.
As one of Smith's disciples Professor Milton Friedman is fond of saying: "There's no such thing as a free lunch."

 

Pension's liability

Speaking of pensions, Old Grumpy has been studying the County Council's accounts for 2001/2002.
The accounts record that, as of 31 March 2002, the authority's pension fund had assets of £147.6 million; liabilities of £136.6 million; and a surplus of £12 million.
Actually, according to my arithmetic, the surplus is £11 million, but what's the odd million between friends?
According to the accounts 65.3% of the assets (£100 million, near enough) is invested in equities (stocks and shares).
Given that the stock market has been in freefall since last March, it will be interesting to see where the pension scheme stands when the council comes to set its budget early in the New Year.
As the mathematicians among you will already have calculated, a 20% fall in the value of the equity portfolio (£20 million) will leave the fund £9 million in the red.
And Old Grumpy notices another small difficulty: the assumed 8% rate of return on these equities.
The historical dividend on stocks and shares is 2-3%, so this assumed 8% return must, presumably, include a factor for capital growth.
But, as we all know, capital growth in equities has been in negative territory all year.
So, not only have the fund's assets been severely depleted by the falling stock market, but its income must also be much less than anticipated.
It will be interesting to see what effect, if any, all this has on our Council Tax bills.

 

No reply

Much to my disappointment, no Christmas card arrived from His Leadership, Maurice Hughes (see Lying low)
Ever ready to think the best of our elected representatives, I am assuming it is lost in the post.
Also lost, of course, is his note containing the answers to my emailed questions about the business relationship between the authority's economic development consultant Dr Michael Ryan and Cllr Hughes Cabinet colleague, Cllr Brian Hall.
I will email him again.
If any reader would like to give him a reminder that we live in a democracy, and that elected politicians are accountable to the electorate, his email address is: leader@pembrokeshire.gov.uk

Once bitten

Old Grumpy can understand the reluctance of the MCC to allow the urn containing "The Ashes" to be transferred to Australia.
Just look what happened to the last lot of fragile old crocks we sent down-under.

And a happy New year to one and all.

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