Police may have to clean up Prescott's Ass'

Christopher Booker
Sunday Telegraph
17th July 2005

Prescott's regional scheme is well and truly hoist on its own petard

An extraordinary impasse has arisen in the North-East, following the referendum last November in which voters threw out John Prescott's plan for an elected regional assembly by an overwhelming margin of four-to-one. Last week the unelected North-East Assembly, made up of councillors and representatives of local bodies, announced that it was to set itself up as a limited company under a new name. The reason publicly given for this by the Assembly's chairman, Alex Watson, was that they wished "to engage with the public better than we have done".

What Mr Watson did not reveal was the real reason for this new policy. It is now more than a year since Neil Herron, the leader of the campaign against an elected North-East Assembly, uncovered the embarrassing fact that, since the unelected assembly was an unincorporated body, its members were personally responsible for all its financial obligations, including the contracts and pension rights of its employees. Between them they had thus unwittingly taken on liabilities amounting to millions of pounds.

Initially the assembly tried to deny this, but Mr Herron's point was subsequently confirmed by lawyers, including those for North Tyneside council. Since this unfortunate fact came to light, the assembly has been seeking to set itself up as a limited company, in the hope of relieving its members of this burden of personal liability. But when they tried to set up the North-East Assembly as a company, they found that Mr Herron had got there first. He had already registered that name.
Worse was to come, because Mr Herron then pointed out that, under the 1985 Companies Act, for them to set up such a company would not absolve them of their existing obligations. And then Mr Herron produced his trump card. Since the councillors who were members had voted for their councils to provide the assembly with funds, they were in breach of the 1972 Local Government Act, because they had voted to give public money to a body in which they themselves had a financial interest.

So it appears that the councillors on the North-East Assembly have not only taken on a personal liability from which it is impossible for them to extricate themselves, but Mr Herron is now asking the police to investigate evidence that they also have been acting in clear breach of the law. Since it appears that similar breaches of the law have taken place in other English regions, he is also making available a set of searching questions (via here)for voters to put to their own councils.

When Mr Prescott sought to impose by stealth his scheme for elected regional governments, he could hardly have foreseen the tangled web in which it would end up being ensnared.