North East Assembly
Newcastle Upon Tyne
26th November 2004
There are a number of issues which are still causing concern:
the relationship between ANEC and NEA, and also the funding and liabilities of these organisations.
I am sure the public will take a very close interest at any attempt to attach any potential cost liability of an unelected assembly to the North East taxpayer, especially after rejecting the proposals for an elected assembly so emphatically.
You will be aware that across the country, and also in the North East, that many local authorities are now preparing to withdraw (and also withdraw funding) from these unelected bodies (assemblies / chambers) as they are now perceived to be nothing more than 'talking shops.'
The emphatic no vote in the North East has highlighted the existence of these organisations.
Plus, major decisions that are being made with regard to planning and housing are being done without democratic accountability.
We are receiving many calls and letters from members of the public who feel that they have been the victims of a political con trick.
However, there are some obvious and very serious implications financially and legally should the NEA/ANEC start to lose its funding, or even attempt to continue in its present form.
Therefore, I would appreciate clarification on the points below and I am sure that in the interests of transparency, especially because of the potential compromise legally of members and local authorities, there will be nothing short of full disclosure. We are quite prepared to challenge the legitimacy of the continuance of these organisations legally, but I am sure that this will not be necessary.
1.Can you confirm that the contracts with the 32 permanent members of staff (is this figure correct?) are all in the name of ANEC as the employer?
2. Is ANEC the accountable body and registered as an employers association under S122 of the TU and Labour Relations (Consolidation) Act 1992 ? If not, who is?
3. Can you clarify what legal advice was taken by ANEC or its members prior to creating such a large number of permanent staff especially as both ANEC and NEA are 'unincorporated associations.' Has the question of personal liability of the members been highlighted and legal advice sought?
4. Can you please forward copies, or make available, this legal advice? ( To clarify the legal position I have provided a link to the necessary section of the Freedom of Information Act 2000 here )
5.Can you confirm whether there are any lease agreements and contracts in the name of NEA or are they all in the name of ANEC?
If so, could you please provide copies or arrange an appointment for us or our legal representative to inspect them?
If not, whose name are they held?
6.Can you please supply me with current copies of both the Constitution and Rules of Procedure for both the Association of North East Councils and the North East Assembly?
7. Can you please advise me whether the members of the said organisations will be covered in any future action by legal representatives of ANEC and NEA, their local authorities (or social partner member) or their own legal representatives?
8. In previous correspondence you referred to an insurance policy and you made an offer to 'indemnify' local authorities from any potential liability arising from any action taken against the NEA or ANEC. Please can you please now provide a copy of this insurance policy and clarify whether the policy is held in the name of one or both of the unincorporated associations? If it was a personal indemnity from you as the Director can you tell me where the funds will be accessed to underwrite any potential financial liability?
I am copying this to the Chief Executive of Sunderland City Council, Ged Fitzgerald, David Jennings, District Auditor and also Sunderland Council's members of both bodies.
There are also a number of other interested and associated parties who have been copied in to this communication.
I am sure that you will personally make it available to the members and employees of both ANEC and NEA in order to make them aware of a potential compromise to their personal situations.
North East No Campaign
12 Frederick Street
Tel. 0191 565 7143
cc. Ged Fitzgerald, Chief Executive, Sunderland City Council
cc. Councillor Bob Symonds, Leader,Sunderland City Council, NEA and ANEC member.
cc. Councillor Bryan Charlton, Deputy Leader,Sunderland City Council, NEA and ANEC member.
cc. Councillor Dave Allen, Sunderland City Council, ANEC member.
cc. Councillor Anne Hall, Sunderland City Council, ANEC member.
cc. Councillor Paul Watson, Sunderland City Council, ANEC member.
cc. Hilary Knox, Assistant Director, NEA
cc. Councillor Peter Wood, Leader of the Opposition, Sunderland City Council.
cc. Ian Scotter, Regional Assemblies Division
cc. Christopher Booker, Sunday Telegraph
cc. Ross Smith / Zoe Hughes, Newcastle Journal
cc. Tony Kearney, Northern Echo
cc. Jeremy Wicking, Sunderland Echo
cc. Mike Thatcher, Public Finance Magazine
cc. Peter Hetherington, The Guardian
cc. David Jennings, District Auditor
cc. Tilbrook's Solicitors
cc.Bernard Jenkin, Shadow regions Minister.
bcc. numerous including North East Council Leaders, Chief Executives and councillors.
NOTES and INFORMATION:
Freedom of Information Act 2000
Trade Union and Labour Relations (Consolidation) Act 1992 section 122
The Unincorporated Association
An unincorporated association is a group of people who have come together to a shared aim and has no distinct legal identity. They are known as the Management Committee.
Once a centre has formalised, its leases, contracts etc. will have to be in the name of one or more of these individuals. These individuals are known as trustees, and the trustees of an unincorporated centre are likely to be personally liable to third parties for the centre’s debts.
This structure is used by newly formed groups as it is cheap and quick to set up and it is flexible. It can also be appropriate for centres who have limited liabilities - i.e. they do not employ staff, do not own buildings and do not administer large grants.
The governing document of an unincorporated association is known as a constitution. Use the checklist in this briefing as a guide to what should be included in a Constitution. Source: Advice UK
F. Wherever possible, regulators should advocate the use of corporate structures for newly formed PSOs in preference to non-corporate structures. Existing non-corporate PSOs should consider obtaining a corporate structure for the greater protection of their appointees.
Appointees in non-corporate PSOs (trusts and unincorporated associations) run greater risks of personal liability than their counterparts in corporate PSOs. The Committee has noted the work of the National Council of Voluntary Organisations (NCVO), the Charity Law Association and Liverpool University in developing and promoting a new corporate structure specifically designed for PSOs. Pending the completion of this work, the Committee recommends that existing corporate structures (in particular, the company limited by guarantee structure) should be used by PSOs, wherever possible.
Conclusions involving further study by others
G. PSOs which are not permitted to purchase personal liability insurance from the PSO's funds should review the position with their regulators. PSOs and regulators should ensure that the reasons for the prohibition on such insurance remain valid.
Most PSOs can purchase personal liability insurance from the PSO's funds as a form of protection for appointees. The exceptions are local authority schools, grant maintained schools and non-departmental public bodies. The Committee does not advocate that appointees should be entitled to personal liability insurance as of right. In every case the risks being insured against must be weighed against the costs of such insurance. But insurance does provide a valuable means of reassurance to appointees, and many PSOs are now able to purchase it (including registered charities, following the Charity Commission's relaxation of its rules on the matter). A review of a prohibition where it exists is therefore warranted. Source:Public Standards
Unincorporated associations do not have a separate legal entity, so all the members of such an organisation would have unlimited liability for its actions. It is also more difficult for an unincorporated association to hold land. In addition, from the perspective of the local community, an unincorporated association does not have the same aspect of legitimacy as a company limited by shares or guarantee. Source: URC Sharing Best Practice
From: Barber, Stephen
Sent: Tuesday, November 23, 2004 9:57 AM
Subject: RE: North East Assembly
In response to your e-mail of 10 November;
(1) I expect to have the audited accounts for the Association and Assembly for 2003/04 within the next few weeks. I'll send you a copy of them as soon as they are to hand. As you know, the Association and the Assembly share a joint budget. I've put in the post to you a list of the local authority subscriptions for the current year.
(2) Members of the Assembly and of the Association have taken the decision to defer moving towards establishing new companies until June 2005.
(3) Staff are employed by the Association of North East Councils who have the usual responsibilities as employer. Staff have permanent contracts of employment. It would not be appropriate to reveal individual salaries which are personal to the person concerned. The total salary bill can be read from the accounts. The Assembly and Association websites have details of the staff.
(4) Local authorities make a single subscription payment in respect of both bodies. Each is an unincorporated association with its own Rules of Procedure, set of Members and business plan etc. All staff in the Guildhall work for both bodies.
(5) I've sent you a copy of a note setting out Members allowances relating to attendance at Assembly meetings. The Assembly website includes details of Members.
Sent: 22 November 2004 16:08To: Barber, Stephen
Subject: North East Assembly
Just to refresh you with the questions. I am sure you haven't forgotten, but obviously there is a sense of urgency now and there are some very serious concerns growing amongst the local authorities and councillors, not just in the North East but across the country.
cc. Hilary Knox
North East Assembly
Newcastle Upon Tyne
10th November 2004
I hope you don't mind us turning our attentions now on the unelected North East Assembly so quickly even before the embers of Prescott's bonfire have cooled, but you know how impatient we are.
May I start by saying, and I know that you know that I mean this, that this is not personal, and it is unfortunate that it is you and the unelected North East Assembly that is about to come under intense scrutiny.
We will not rest until the Assembly is disbanded and we have been contacted by thousands of people across the region who are incensed to say the least, at being deceived. They realise that they have been conned and that they are still paying for an Assembly that they never asked for, and thought they had rejected. To argue that they rejected an elected version to be content with an unelected form will unfortunately fan the flames of their anger even higher.
So, we can begin the process of assisting with transparency I would be grateful if you could answer the following questions:
1. Can you please forward details (either electronically or hard copy) of the latest accounts for the North East Assembly, and the most recent subscriptions paid by the local authorities?
2. Can you please confirm that the Assembly is still pursuing incorporation? If so, under what Limited Company title?
3. Can you please provide a full list of all employees, their job description and salary and the nature of their contract (whether temporary or permanent) and the who is responsible for potential redundancy and pension arrangements?
4. Some authorities still seem to think that they are only supporting ANEC and not funding the NEA. Can you please clarify the situation and detail the relationship, administrative and financial, between ANEC and NEA for the record?
5. Can you please provide full contact details of all assembly members and the expenses remuneration package they receive for attendance?
Obviously there will be more as this whole affair comes under close scrutiny, but I am sure this will suffice for the time being.
I look forward to your response.
12 Frederick Street
Tel. 0191 565 7143
cc. Hilary Knox, Assistant Director
Friday, November 26, 2004
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