The Ship is Sinking...Is there a Steward on Board?

Sunday Telegraph
December 26th 2004
Christopher Booker's Notebook

The year that Prescott saw his dream become a nightmare
With the possible exception of David Blunkett, no minister suffered a greater personal humiliation in 2004 than John Prescott, with the overwhelming rejection of his plan for an elected regional assembly in the North-East.

It was intended to be the forerunner of similar assemblies in seven other English regions, thus completing the greatest project of Mr Prescott's career: his personal crusade to complete the "Balkanisation" of the United Kingdom by dividing it into 12 "Euro-regions", each with its own elected parliament.

Generally missed in the wake of Mr Prescott's defeat, however, is the extraordinary shambles that has been left behind, which now threatens to blow up into a political scandal. When he set up his eight unelected regional assemblies in 1999, the legal standing of these bodies was remarkably inconsistent and unclear. Their members were nominated by local authorities or local organisations, such as trade unions. The money to pay for their offices and hundreds of employees was given on an ad hoc basis by local councils and central government, with the idea that this would in due course be regularised by elected assemblies.

The collapse of Mr Prescott's dream has raised a hefty question mark over this chaotic system. Who is legally responsible for employing all those officials, paying their salaries and providing for their pensions? Many of the local authorities that have helped to foot the bill of £30 million a year are becoming restive.

Yorkshire East Riding council has already pulled out of the Yorkshire and Humberside Assembly, saying that it is no more than a "money-wasting talking shop". The leader of Medway council in Kent wants his council to withdraw support from the South-East assembly. Other councils in the South-West and the North-West may follow suit. This will leave several hundred employees – many of them in Brussels, where each assembly has its own office – dependent for their salaries and pensions on bodies that are either limited companies or have no legal status.

Neil Herron, the tireless director of Neara (the North-East Against a Regional Assembly), has established that several of these bodies are "unincorporated associations", which are strongly advised under statute not to incur financial obligations because their members are "likely to be personally liable" for the association's debts. In some instances, the councillors or "stakeholders" nominated to these bodies may find they are personally liable for contracts and pension rights worth tens of millions of pounds.

In November, Mr Herron raised these potentially embarrassing points with Stephen Barber, the director of the North-East Assembly – itself an unincorporated association. Mr Barber's response was that the assembly had deferred considering its legal status until next summer.
For the sake of the assembly's employees, it might be desirable to move these issues to the top of the agenda – before Mr Prescott finds himself at the centre of another nasty political mess.