Will this be the downfall of the assemblies?

Funding Complaint to Council will create national chain reaction

Below is a copy of the complaint lodged today with Sunderland Council.

Please feel free to use it in your local authority area and bring the issues raised to the attention of all your councillors who are assembly members.

12 Frederick Street
Sunderland
SR1 1NA
28th February 2005

Bob Rayner
Monitoring Officer
Sunderland City Council
Sunderland Civic Centre
Sunderland
SR2 7DN

Dear Mr Rayner,

As you are aware, I have raised the issue of the legality of the funding arrangements of ANEC/NEA in the past, which led to censure by the District Auditor for breaches of Section 19 of Local Authority Guidelines on Publicity.

It was decided to refrain from a further challenge of the Association of North East Councils / North East Assembly funding issue and certain questions, which remained unanswered, until the referendum had been held and enough time had elapsed from the Government to consider its position following the overwhelming and emphatic defeat.

It appears however, that the regional agenda is to continue regardless of the decision. It also appears that the North East Local Authorities are not taking heed of the result and the rejection by the electorate of a regional assembly.

It is disingenuous to think that the rejection of an ‘elected’ version was in any way favour or support for the ‘unelected’ version.

My concern, and that of many others, is therefore drawn back to what appear to be some very serious misuses of public money. From discussions with the District Auditor and the Senior Policy Advisor at the Standards Board of England and Wales, I understand that I first need to raise the matters with you for investigation.

However, because of the seriousness of the allegations and the implications for other local authorities, I will also be copying in a number of other interested parties in on this correspondence. I also believe that the matter is so serious that it may warrant a Police investigation with a view to prosecutions.

Therefore, I hope that you will treat and investigate the matter thoroughly and with the view that this is simply the beginning of a process that will also be replicated in other authority areas and with other regional assemblies across the country.

There are a number of questions that I wish answered before moving on to the complaint, and the answers will have an obvious bearing on the next stages of the complaint and investigation procedures by outside bodies:

1. Can you confirm that Sunderland Council is aware that both ANEC & NEA are ‘unincorporated associations’ and thereby have no legal personality?

2. Can you please provide details of all the amounts paid by Sunderland Council to ANEC and NEA since their inception?

3. Can you please provide details of all the Sunderland Council’s representatives of ANEC and NEA over the period this money was paid and whether they were present at council meetings when this payment, the ‘voluntary subscription,’ was agreed in the budget?

4. Can you confirm that at all times the Members’ Interest Book had up to date details of membership of ANEC and NEA? If not, can you advise as to when and where the breaches were noted and the date they were corrected?

5. Had the members indicated that they had a pecuniary or prejudicial interest in ANEC or NEA? If not, had you, as the Monitoring Officer, advised them otherwise?

6. Were they ever advised by yourself as Monitoring Officer, or yourself as City Solicitor, or any other official of the Local Authority that membership of an ‘unincorporated association’ whose members are ‘jointly and severally’ liable may have personal financial consequences?

7. Stephen Barber, Director of ANEC/NEA has advised that he informed all members of both organisations of their potential personal liability. Were you aware of this? If so, did you immediately check with all of Sunderland’s members of ANEC / NEA that they required to take independent legal advice?

8. Stephen Barber, Director of ANEC/NEA also advised Sunderland City Council that there was a 'insurance indemnity' in place to cover any potential future litigation / legal challenges to ANEC/NEA’s status and activities.
I have correspondence indicating that you had sight of this.
Can you please provide a copy of this advice / indemnity under the Freedom of Information Act 2000 along with all correspondence, including e-mails, between your Department and Sunderland Council’s Assembly and ANEC members, and your department and Stephen Barber and the North East Assembly and ANEC executive?

9. ANEC or NEA are not recognised as an employer under Section 122 of the Trade Union & Labour Relations (Consolidation) Act 1992.
— Are you aware of this?
— Did you advise Sunderland Council’s ANEC/NEA members of this?
— Did you advise them that as they were the ‘legal personality’ of ANEC, and as such they could face a potential personal liability for those contracts and pensions / redundancies should there ever be a shortfall in the funding stream?
— Following the previous censure by the District Auditor after the behaviour of the Assembly / ANEC, did you conduct any investigations into the behaviour of the Assembly / ANEC and did you monitor its activities and check out its legal status, or did you simply rely on the reassurances of its Director, Stephen Barber? If so, under the Freedom of Information Act 2000 can you please provide copies of these investigations?
— Are you aware of any North East Local Authority underwriting the ANEC / NEA’s contacts of employment for their permanent members of staff? If so, which authority?

10. Can you please provide a copy of the Strategy promoting the well being of the City of Sunderland and details of the consultations, which were undertaken detailing how the decision was arrived at that membership of ANEC / NEA would be beneficial to the City?
(i) What is the form that the ‘consultation process’ takes?
(ii) Has the strategy been altered since the misuse of public money and the censure by the District Auditor?
(iii) Has the strategy been altered since the referendum, in order to assess whether public are happy to continue paying money to a ‘regional’ body that they thought they had rejected in the referendum? If not, why not?

11. Can you please provide details, under the Data Protection Act 1998, of all communications (including telephone, e-mail, letter) between your department and myself, and where there has been reference to myself between; your department and the Chief Executive, your department and the Press Office, your department and Trading Standards, your department and Transport and Engineering, your department and the ANEC & NEA, your department and any other City of Sunderland Department and any outside agencies including ODPM & GONE. I would also like copies of all information and communications held individually by these departments.


THE COMPLAINT

The complaint which I will initially ask you to respond to, which will require further investigation by outside bodies, dependent on your response is as follows:-

I wish to make a formal complaint, which I will be copying initially to David Jennings, District Auditor and Michelle Witton, Senior Policy Advisor at the Standards Board of England and Wales, because of the potential ‘knock-on’ implications for other local authority councillors and possible legal action.

The complaint is as follows:-

1. I believe that there have been breaches of Section 137 and 143 of the Local Government Act 1972 and Section 2 of the Local Government Act 2000.

The ANEC / NEA cannot be seen to be acting always in the interests of all of the local authority areas in the region, and often decisions or strategies will be to the detriment of Sunderland.

Therefore if ANEC / NEA is beneficial to another area which compromises Sunderland then Sections 137 / 143 and Section 2 cannot hold true.

Can you clarify if this is the case?

Can you detail your monitoring procedure intended to prevent such breaches?

If the promotion or improvement of economic, social or environmental well-being of the local authority area can be potentially compromised then the payment of the ‘voluntary subscriptions’ cannot be authorised.

The recent conflict in Durham County and Districts clearly highlighting this with DCC Leader Ken Manton expressing opposition to the North East Assembly’s Regional Spatial Strategy which favours Tyneside & the Tees Valley.

2. Relates to the Code of Conduct of councillors.
From Part 2.8 (1) of The Local Authorities (Model Code of Conduct) (England) Order 2001,
“A member must regard himself as having a personal interest in any matter if the matter relates to an interest in respect of which notification must be given in paragraph 14 and 15 below, or if a decision upon it might reasonably be regarded as affecting to a greater extent than other council tax payers, ratepayers or inhabitants of the authority’s area, the well-being or financial position of himself, a relative or a friend …”

It therefore appears that Sunderland Council’s Members of ANEC and NEA have recorded in the Members’ Interest Book the fact that they are only ‘members’ of the organisations (you will be confirming whether they have all done this…question 4 above). They appear not to have registered a ‘pecuniary’ or ‘prejudicial’ interest.
Can you confirm this?

The members’ financial interest arises because as ‘unincorporated association’ it is the members of NEA & ANEC who are ‘jointly and severally’ liable.

Therefore, if, as it appears, ANEC is not registered as an employer under the Trade Union and Labour Relations (Consolidation) Act 1992 then it is the members of ANEC who have the legal responsibility for contracts entered into by that body.
The liability of the contracts of employment amounts to many hundreds of thousands of pounds.

Therefore, if Local Authorities ceased to pay ‘voluntary subscriptions’ or there was a change of government whereby these bodies were abolished (or both) the liabilities of the members would become immediate and apparent.

Therefore, for the members of ANEC & NEA, sitting as councillors and approving Sunderland’s budget and voluntary subscriptions there is a serious breach of Local Government Act 1972 Section 94 (1) as well as breaches of the Members Code of Conduct.

Section 94 (1) states,
“Subject to the provisions of section 97 below, if a member of a local authority has any pecuniary interest, direct or indirect, in any contract, proposed contract or other matter, and is present at a meeting of the local authority at which the contract or other matter is the subject of consideration, he shall at the meeting and as soon as practicable after its commencement disclose the fact and shall not take part in the consideration or discussion of the contract or other matter or vote on any question with respect to it.”

(The disability could not be removed by Section 97 (5) of the same Act because the ‘influence’ of the leader and deputy leader of the ruling group could hardly be classed as ‘insignificant').

Therefore, under Section 94 (2) of the Local Government Act 1972 it appears that an offence has been committed.

I wish you also to refer the matter to the Director of Public Prosecutions for investigation.

I trust that you will treat this complaint with the seriousness that it merits and I will receive a full and thorough response addressing all of the points raised in order for the complaint to be taken to the next stage of proceedings.

Yours sincerely,

Neil Herron