24 September 2002

Second chance


Strange things happen in the Democratic Republic of Pembska.
Back in February, in anticipation of future legislation, the County Council resolved to adopt a new allowances scheme which provided, among other things, that members would be paid their travelling expenses on an annualised basis; thereby relieving them of the onerous duty to fill in claim forms.
Unfortunately, when the Welsh Assembly eventually approved the regulations, such annualised schemes were outlawed.
That put the Director of Finance in an awkward position.
Under Common Law principles (Attorney General v De Winton), a case which, incidentally, established that officers of a local authority owe a fiduciary duty to the electorate as a whole and not to the council or the individual members, the Director is bound to disobey any illegal resolution of the Council.
That old Common Law rule has now been given statutory force by Section 114 of the Local Government Finance Act 1988.
So, the the Director of Finance had a legal duty to refuse to make any further payments under the unlawful scheme approved in February.
However, what is not altogether clear is whether, as actually happened, the Director has the authority to substitute a scheme of his own.
It is arguable, I would suggest, that the proper course of action would have been to call an extraordinary meeting of the Council to regularise the situation at the earliest opportunity by approving an alternative [legal] scheme.
Be that as it may, the Director, in his letter to the members, has promised to bring a new scheme before the council on October 31.
That will, at least, gives the members the opportunity to reconsider their deeply unpopular decision to give themselves an 80% pay rise on top of the 80% pay rise they awarded themselves just over a year earlier.


Monkey business

I promise that this is the last piece I will write about the Birmingham University report on councillors' allowances - at least until I see the details of the revised scheme that the Director of Finance is due to present to the County Council on October 31.
You may remember that the main thrust of the Birmingham report was that local government needs a better class of members drawn from a wider cross section of society.
Based on the principle that "if you pay peanuts you get monkeys", the study recommended large increases in members' allowances as a method of attracting more able candidates.
If that is the case, the logic of doling out extra peanuts, to the present inhabitants of the zoo, two years ahead of the next election is difficult to comprehend.
The Birmingham report refers to a string of previous studies and commissions: Maud (1964) Robinson (1976) Widdicombe (1985) Barron (1990) Rao (1992) Cadwallader (1995) and Boyne (1999) all of which proceeded on the assumption that increasing councillors' remuneration would lead to a improvement in the calibre of those putting themselves forward for election.
From my vantage point in the public gallery, I find scant evidence to support this hypothesis, though one cannot discount the possibility that without payment they might be even worse.
The mind boggles!

Boys from the black stuff

We seem to be living in the age of the whitewash, where institutions are more concerned with protecting their own interests than those of the people they are supposed to serve.
Only this week, we have heard that the police are investigating an alleged cover-up by the Catholic Church over a paedophile priest and the outright denial (now rapidly unravelling) by the Standards and Curriculum Authority of any interference in the grading of 'A' level results.
Previously, we have had Peter Mandelson's dealings with Geoffrey Robinson and the Hinduja brothers: Stephen Byers and Martin Sixsmith and the, as yet, unresolved matter of Tony Blair, Black Rod and the Queen Mother's funeral.
In all these cases the pattern is the same.
First comes the denial accompanied by claims that the whole thing has "been got up by the media". Then the newshounds sniff out further incriminating information and, with luck, the evidence becomes so overwhelming that they put their hands up and go.
We are fortunate, indeed, to have such a tenacious national press.
Regrettably, at local level, things are much more easily swept under the carpet.
Last week I was rooting around in the shed when I came across a dusty old file labelled "Preseli Fraud".
Whenever I read this file, with its well-documented examples of false accounting, fraud and theft on almost every page, and contemplate the fact that nobody was ever prosecuted, I pinch myself to make sure I'm not dreaming.
This, you may remember, was what came to be known as "the tarmac scandal" because hundreds of tons of the black stuff were involved.
A typical case reported by the auditors was Maes-Y-Cnwce, Newport where "An invoice had been received from the contractor in January 1993 and paid in the sum of £6,624 excluding VAT for tarmacking the road at the above site. A subsequent report had suggested that no works had been completed on the site and this has been confirmed by the contractor who has stated that the works were completed elsewhere, though he has been unable to tell the Investigation Team where."
The contractor's amnesia over Maes-Y-Cnwce contrasts with another phantom job, at Cilgerran, where an invoice for £2,209 was submitted, though, on the contractor's own admission, "no such works were ever carried out".
In that case the contractor identified the true destination of the tarmac as St Dogmaels Community Council car park - a piece of land that the council didn't even own.
Given that the firm involved is one of the largest contractors in the county, it seems rather strange to Old Grumpy that £6,624 worth of tarmac could leave the quarry without anyone knowing where it had gone.
My own theory is that this bout of forgetfulness was brought on by the fact that, had the recipient been identified, the truth of what had been going on would have been laid bare and the balloon would have gone up - big-time.
The failure to reveal the true nature of the Maes-Y-Cnwce transaction allowed the fiction to be maintained that, as all the false invoices about which details were known, involved public facilities - village hall and chapel car parks and the like - nobody had benefited personally and, therefore, no crime had been committed.
That ignores the fact that the Theft Act makes no mention of personal gain - after all if someone takes your TV and throws it into Milford Docks there is no personal gain though nobody would deny it had been stolen.
The anatomy of a typical case - and there were dozens of them - involved an officer of the council instructing a contractor to do some unauthorised work often on land that the council didn't own.
The contractor would then be compensated either by means of a fictitious invoice or the inflation of an invoice for a genuine job.
To give a completely hypothetical example: new chairs are required for the village hall so the council officer is approached.
He tells the furniture supplier to provide the chairs and to invoice the tarmac contractor.
The tarmac contractor pays for the chairs and then recoups the expenditure by falsifying an invoice, which the council officer then approves for payment.
The Investigation Team's reports in my possession are strangely silent about who it was who made the initial approach to the council officer.
A clue is to be found in one of the several resolutions passed by Preseli Pembrokeshire District Council in response to this affair.
It reads: "Elected members should not attempt to require officers to carry out works except through the machinery of the appropriate Committee or sub-committee."
Or, in plain terms, members should not collude with officers in the theft of taxpayers' money.
This influence peddling by members for electoral advantage means that certain of them are virtually unshiftable and is the reason why the Welsh Assembly is proposing that those old boys (and girls) with ten or more years service should be offered £15,000 to hang up their boots.
In any case it is not altogether clear that nobody benefited personally. In the Invetigation Team's report under the heading: "Private works for council employees", is the following: "During the investigation into the overpayment on the Scarrowscant Sewer scheme it had come to the attention of the Internal Investigation team that at around the same time the contractor had been undertaking private works for the then Officer A.
The contractor was interviewed regarding the works though he was unable to provide any details of any invoice raised in respect of the works.
Instead the contractor advised the Investigation Team that the Council official had paid £5,000 for the works completed, in cash, which had been accounted for and banked after the commencement of the Internal Investigation [more than a year after the Scarrowscant Sewage scheme was completed].
The former Officer A was not interviewed as he was no longer employed by the authority [having taken early retirement on health grounds] when the Investigation Team became aware of these facts.
There is no evidence to suggest that this highly peculiar arrangement between a senior council official and the contractor was fraudulent."
Unless, that is, you look at the previous page where it is recorded that as a result of "incorrect invoices submitted by the contractor, and an arithmetical error made by Council Officials", there had been an overpayment on the scheme of £4,225."
What a coincidence!
Or maybe not!
As the report by the Investigation team says:
"All of the contractors who have been interviewed by the Internal Investigation Team have agreed that they have falsified invoices to hide the costs of other works.
They have all stated that the instructions for the falsification came from either Officer A or Officer B.
No documentary evidence has been produced to support these allegations [because the instructions were given verbally, presumably], although Officer B has verbally confirmed his involvement in the falsification of invoices from firms B, D and E.
However he has denied any knowledge of the falsification of invoices from firm C.
The conclusion of the Investigation Team is that the falsification of invoices with the collusion of officers in the Central and Northern Divisions was systematic in order to hide the true nature of the works carried out and paid for on their instructions."

By next week I hope to post the full text of the Investigation Team's reports on the Web.


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