By Richard Johnstone | 30 January 2014
The Wales Audit Office has today said both Carmarthenshire County Council and Pembrokeshire Council acted unlawfully in allowing senior officers to opt-out of the Local Government Pension Scheme.
Publishing public interest reports today, Anthony Barrett, the appointed auditor for both authorities and assistant auditor general, said the pension opt-outs were against the law on a number of grounds.
Carmarthenshire allowed officers to opt-out of the LGPS and be paid a ‘supplement’ equivalent to their pension contributions so they could make their own retirement arrangements.
Pembrokeshire also allowed senior officers to receive payments equivalent to the employers’ pension contributions if they opted-out of the LGPS.
Barrett said that in both cases, the councils did not have the power to remunerate staff to mitigate the effect of pensions legislation. In addition, they failed to have due regard to the public sector equality duty, and the decisions amounted to indirect discrimination.
The public interest reports issued under section 22 of the Public Audit (Wales) Act 2004 also stated that in Carmarthenshire, a senior officer who had a disqualifying personal and pecuniary interest participated in the decision-making process. In Pembrokeshire, more than one officer with such an interest did so.
Barrett also issued a separate public interest report against Carmarthenshire’s decision to grant an indemnity to the chief executive to bring a libel counterclaim against an individual.
Last month, Carmarthenshire rescinded its decision to offer a pay supplement in lieu of pension contributions and announced that no further payments would be made to the chief executive from January 2014. More than £27,000 had been paid since 2012.
‘Carmarthenshire Council has acted unlawfully on two fundamental issues, both of which the public need to be fully aware of,’ Barrett said.
‘The authority has taken decisions and used taxpayers’ money in areas that they do not have the legal powers to do so. I welcome the fact that the council has rescinded its decision over the pensions issue, it now needs to do the same in relation to the libel indemnity granted to the chief executive.
‘It is also of vital importance that the council addresses procedural weaknesses in its decision making, as highlighted in my two reports today, so that it exercises its discretion and authority properly on such important matters.’
A Carmarthenshire Council spokeswoman said: ‘The Wales Audit Office reports have been received and will be carefully considered by the council in due course. It would not be appropriate to comment further until such time.’
In Pembrokeshire, it is expected payments worth £51,011 will have been made to the chief executive and one other senior officer by the end of March.
Barrett said the authority urgently needed to stop any further payments.
‘The public should be able to expect the highest standards of decision making at local authorities and the council must now address the procedural weaknesses I have identified in my report. It needs to demonstrate to its electorate that it is operating in accordance with the law and in line with good governance principles.’
Responding to the auditor’s concerns, Pembrokeshire’s deputy leader Rob Lewis said: ‘This report deals with a number of complicated issues.
‘While I note the auditor’s views in relation to the decision taken, I am pleased he has concluded the council could take a lawful decision once a number of procedural matters have been addressed.’
