Hidden cost of Prescott's regional folly

The Sunday Telegraph, Christopher Booker
06th March 2005

Since last November's referendum in the North-East, which delivered a resounding four-to-one vote against a regional assembly, John Prescott's scheme to divide England under eight regional governments has crumbled further into chaos. The survival of the eight unelected assemblies that he hoped would be retrospectively legitimised by referendums, and which are part-funded by local authorities, is now looking increasingly shaky.

Last week, 70 per cent of the elected councillors on the South-East Regional Assembly voted for its abolition. In Cornwall, the county council is considering withdrawing its support from the South-West assembly. Lancashire county council has already withdrawn from the North-West assembly, with Cheshire set to follow.

One reason for this disintegration is the growing panic among council nominees on these assemblies that, because of the dubious status of most of these bodies as "unincorporated associations", councillors may be personally liable in law for their assembly's financial obligations, including the contractual and pension rights of hundreds of employees.

In Yorkshire and Humberside, it has emerged that all the assembly's financial obligations are being underwritten by Wakefield council. This startling fact may well alarm local ratepayers, who were never informed of this peculiar arrangement.

Meanwhile the sharp-eyed Neil Herron, who led the "No" campaign in the North-East, has just formally brought it to the attention of his local council, Sunderland, that the councillors who sit on the North-East Assembly seem to be in serious breach of various statutory provisions. For a start, since the councillors are personally liable for the Assembly's financial obligations, this gives them a personal and pecuniary interest in its decisions, which in law disqualifies them from participating in those decisions.

Furthermore, under the Local Government Acts, it is illegal for councils to give money to bodies which may be acting against their interests. Since the North-East assembly recently voted for a regional planning strategy which some participating councils strongly oppose, for them to fund a body against their ratepayers' interests appears to be breaking the law.

Prior to lodging a complaint with the district auditor, Mr Herron has fired off a set of searching questions to Sunderland's chief legal officer, to which he has been promised "a substantive reply". But at least Bob Gibson, the leader of the North-East assembly is no stranger to the problems of failing to declare a "pecuniary interest". In 1997, he was fined £800 and found guilty on four charges of failing to declare his interest when, as Mayor of Stockton, he had chaired meetings which voted on proposals affecting the future of the company he worked for.