12 October 2004

 

 

I am getting the impression that some of the new members of the County Council are beginning to wonder what they are for.
No doubt, amid the euphoria of election night; after the votes were counted and they found they had more than anyone else, they imagined they would be playing a central role in running the County Council.
That idea was probably reinforced when they turned up for the induction seminar to be told that "you the politicians" make the policy and "we as officers" put it into effect.
Now, more than four months later, the scales are falling from their eyes as they realise that they are mere spear-carriers whose role it is to put their hands up as and when appropriate to rubber stamp whatever the Chief Officers Management Board (COMB) has put in front of them.
This is particularly so in respect of the members of the rather oddly named Independent Political Group - the political wing of COMB, as someone once so accurately described it - who are called together a day or so before meetings of Council so that they can be indoctrinated into the "party" line.
As it happens, Old Grumpy has a copy of an Audit Commission paper entitled: "We can't go on meeting like this - the changing role of local authority members", which might help my fellow councillors to understand what they are supposed to be for.
The Audit Commission divide the elected members' role into three areas: politician, representative and board member.
As politicians, members are supposed to "... develop their vision of the direction the local community should take...".
In their role as representatives, members are supposed to make sure that the the authority provides value for money and to "... take the crucial decisions on the balance between services and levels of taxation."
Also, as representatives, members will "often be called upon to assist ... as advisors and advocates for their constituents."
And thirdly, as Board Member (or bored member, as one of my friends put it)) "They share collective responsibility for the local authority organisation and activities similar to those of company directors ..." including, presumably, the duty to ensure that the authority, its members and staff, always act within the law.
Though, as the Audit Commission recognises, there is a good deal of overlap between these three roles, it seems to me that this is a fair summary of what being an elected member should be about.
However, we do not live in a perfect world and, as the Commission points out, too often "...leading members are so closely involved with the organisation ... that they abandon their representative roles and become apologists for, rather than controllers of, whatever the organisation does."
Unfortunately, that is the situation that prevails inside Pembrokeshire County Council where far too many members, including, I regret to say, some of the opposition, have come to regard themselves as representing the authority rather than the people who elected them.

 

Hard times

 

It is quite amusing to watch the politicians tiptoeing around the so-called pensions time bomb.
Luckily for them it is not likely to go off anytime soon so they can all pretend to know how to defuse it.
However, the issue involves some fairly basic arithmetic that even our modern maestros of spin will find it hard to avoid in the long term.
According to Adair Turner's report published today we need to save an extra £57 billion each year
The possible solutions being canvassed include: compulsory saving ; larger contributions from employers; higher taxes; and, whisper it softly, increasing the retirement age.
Forced saving sounds attractive until you consider that the main driver of economic growth is consumer spending.
As you can't save and spend the same pound.
What saving more actually involves is making yourself significantly poorer while you're working in order to make yourself significantly better off when you retire.
A classic zero sum game.
Larger contributions from employers sounds fine until you consider that this would depress profits and, by extension, companies' ability to pay dividends to shareholders; the largest of which are pension funds.
And if companies' dividend payments fall so do their share prices with devastating effects on pension fund asset values.
And if you take more tax out of wage packets it leaves less spare cash for saving.
If ever there was an issue that justified John Maynard Keynes' description of economics as "the dismal science" this is it.
The simple truth is that, over the long term, the population of the UK: pensioners, workers and the rest, can only consume what the national economy produces.
How the GNP cake is divided up is a matter for political debate but no amount of talking will make the cake bigger.
The only way to increase the size of the cake is produce more through putting more people to work, raising the productivity of those in employment, or a combination of the two.
Otherwise we will have to make do with thinner slices.
One section of the community whose cake rations seem immune from these problems are those in the public sector who can look forward to gold-plated, index-linked, final salary pensions.
However, it cannot be long before those living in reduced circumstances on private pensions start to wonder why they should be paying large amounts of tax to fund a system from which they themselves are excluded.
Pembrokeshire County Council is involved in two pension schemes: the Teachers' Pension Scheme which is a pay-as-you-go scheme and the Dyfed Scheme which covers all other employees and which is, as far as we know, fully-funded.
Pay-as-you-go schemes are a better guide to the underlying trends than their fully-funded cousins because there is little or no time lag before deficits show themselves.
Last year's County Council accounts reveal some interesting information on the Teachers' Scheme, the cost of which rose by £1.9m from £2.8m to £4.75m an increase of almost 70%.
This increase was fully funded by the Welsh Assembly which is probably why it went largely unremarked.
Had the extra money been raised through the Council Tax it would have cost a band D property some £40 extra.
Across Wales' 22 Unitary Authorities, of which Pembrokeshire is on of the smallest, the total cost must have been in the region of £50m.
Which is, of course, £50m the Assembly didn't have to spend on something else.
If these sort of increases persist, the pips will eventually begin to squeak.


Windfall

A couple of weeks ago I received a completely unexpected letter from the Pearl asking me to get in touch with them about my pension plan.
This is not quite in the same league as hearing from solicitors that a long-forgotten great aunt has passed away in Australia leaving you, her only surviving relative, half of Queensland and a cellar full of Old Masters, but it is, as they say, better than a kick in the goolies.
It appears, I took out this pension in March 1972 and, probably because I couldn't afford to keep up the payments, put it into cold storage in March 1974
Since then, thanks to the wonders of compound interest, the fund has accumulated £2,662 which the Pearl tells me will buy an annuity for life of £198.01 per year.
Alternatively, I can take a lump sum of £524.25 together with an annual payment for life of £161.15.
The £191, I calculate, will, give or take a few pence, will finance a lifetime weekly bottle of £3.99 Chilean merlot.
If I take the lump sum, I will be forced to drink the £2.99 with enough left over for two bottles for Bank Holidays and birthdays.
How much simpler life was before we had to make all these difficult choices.


Enduring mystery

It isn't often that I laugh out loud at a joke in a newspaper, especially if it's one I've heard before.
This one involved the super model Jordan who is reputed to have told her boyfriend: "Look darling! I've finished my jigsaw, and it only took three weeks."
"What's so special about that?" her boyfriend asked.
"Well", she replied, "it says two-four years on the box."


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