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When the subject of the pensions and libel indemnity scandals finally cropped up in last week's meeting of Carmarthenshire County Council, Deputy Leader Pam Palmer (Independent) and Giles Morgan (Independent) were quick to go on the offensive. The auditor had given the council an excellent bill of health; the report was wonderful, and everything was squeaky clean apart from a couple of trivial blemishes. Councillors should rush back to their voters and tell them what a wonderful job the council and its officers were doing. Pam declared that she was certainly going to be doing that.

Voters in Abergwili may soon be in for a rude awakening, because it seems that there are other bodies hidden away in the jungle of the council's accounts which the WAO may have missed first time round, although there is reason to believe that the auditors did catch a whiff of something odd a couple of months back when they wrote a damning report on the council's grant application procedures (see previous post here).

The report came before the full council last month, and a clearly carefully synchronized display of indignation was put on for the benefit of those of us not entrusted with running the show. Giles Morgan and the usual suspects were on the attack again.

The substance of the counter-offensive was that the WAO was petty and nit picking. Worse still, the interference from these busybodies was costing the council a fortune. Carmarthenshire had a great record of applying for and winning grants.

The last point is true enough. The problem is not winning grants, but what happens to the money.

Time for another rummage through the COASTAL woodpile.

COASTAL started optimistically, and was even refreshingly transparent. Reports and business plans were published until, as we have seen,  it emerged halfway through that the scheme had been an epic failure and had zero chance of getting anywhere near the targets which had secured it all that lovely EU loot.

In October 2011 a firm of consultants (Wavehill) was called in to review the project, and their findings made for very depressing reading. Not only had the targets been missed by a mile, but Wavehill warned that the EU might well call time on the project.

At that point things go very quiet, with the exception of Carmarthenshire's PR machine which started to do what it does best. Glossy newsletters were published showing that Carmarthenshire at least had met and/or exceeded selected and unverifiable targets, and the campaign culminated this month with the release of a slickly produced film showing what a wonderful job it had done.

One of the Carmarthenshire newsletters published in July 2012 claimed that 89% of those taking part had had a positive outcome, although no definition of positive outcome was provided.

Shortly after that the COASTAL group met again. The minutes of the meeting can be found here, and the smell of fear and panic is evident.

The Welsh European Funding Office (WEFO) was investigating, and WEFO wanted to know how COASTAL was going to achieve its goals with just £1.5 million left in the kitty. WEFO had also come up with a definition of what might constitute a "positive outcome" (this was nearly 3 months after Carmarthenshire boasted a success rate of 89%).

Reading through the minutes, it is clear that WEFO was bending over backwards to be fair and lenient. In-house courses which were not accredited would be classed as positive outcomes, for example. In plain terms, that means that participants could attend courses without any formal assessment by an external body to ascertain whether they had actually learned anything.

A little bit further down, and we read,


During the WEFO investigation into the complaint that ESF funded staff were undertaking statutory duties, the main form of evidence that we could supply were staff timesheets. The timesheets were all backed up by colour coded entries on the outlook calendar.

What this means is that suspicions had been raised that at least some of the participating authorities had been misusing EU funds to pay staff to perform statutory jobs, and although the minutes do not state this, Carmarthenshire in particular was under the spotlight. Statutory duties are not eligible for ESF funding, and statutory duties, for anyone not familiar with the jargon, are job functions which councils are obliged by law to provide in areas such as children's services and social care.

In a nutshell, what was being alleged was that the council had redirected money intended to help mainly vulnerable people to find jobs into creating council jobs.

It seems that what happened next was that WEFO representatives accepted COASTAL's assurances that everything was in order, the timesheets were all correctly colour-coded, and life went on.

Thanks to the dogged persistence of a member of the public, however, the complaint about the misuse of EU funds has not gone away, and the matter has now been escalated to a senior level within the Welsh Government, with the WAO's own findings giving the investigation additional impetus.

Although the council has steadfastly denied redirecting ESF funds to pay for statutory posts, documentary evidence in the public domain seems to suggest otherwise.

Carmarthenshire County Council's Annual Report on Effectiveness of Social Services 2010-11, for example, states, "We have more than doubled our number of personal advisers through securing European funding."

Personal advisers are council staff with statutory duties responsible for young people leaving care.

The sums of money involved are huge, and an interesting question for the investigation will be who knew what, and whether there was an attempt to cover things up when WEFO first investigated last year.