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With apologies to readers for this blizzard of claims and counterclaims, but here is the latest from the council itself and a succinct reply from Plaid Cymru.

First up the Ministry of Spin.

Update 5 February 1pm

Thanks to Anon for spotting that the press release has now been moved into the archive. Confusingly the only press statement currently showing in the Media section of the website preceded the statement which has gone into archive. Oh well.

The archived statement also contains links to the two QCs' reports, about which more in due course.

Update 5 February

Mysteriouser and mysteriouser. The council press release announcing that Mrs Linda Rees Jones would be producing killer evidence to show that the council was right all along, has now vanished from the council's website. The statement which promoted Mr Adam Speker, James's barrister in the libel trial, to QC and  promised that the advice provided by genius Timothy Kerr QC in November 2013 would be published for all to see has gone, leaving just a funny smell and some lingering smoke.



The response of Carmarthenshire County Council to the auditor's reports, the calls for the suspension or dismissal of senior officers and the resignation of Kevin Madge and others has been, when stripped of the hysteria, that we should not judge too soon and that the council has evidence that will show the auditor was wrong.

Two documents have now been circulated to the councillors which set out the advice the council received on the ground-breaking indemnity amendment to its constitution in 2008, and another dated 27 November 2013 produced by Timothy Kerr QC on the legality of the indemnity in the Jacqui Thompson case.

Mr Kerr, it will be remembered, was also the QC who advised the council on the pensions pay "supplement" and whose chambers profile says that his clients love him and consider him to be a genius.

The conclusion of Mr Kerr's report is that the council was acting lawfully when it indemnified Mr James's counterclaim. What this cost is not yet known, but it will not have come cheap.

The reports have been distributed by Mrs Linda Rees Jones who says that councillors should compare them carefully with the contents of the auditor's report.

No doubt councillors will, but they may be puzzled about the timing of Mr Kerr's advice. One of the auditor's concerns was that the council went ahead with the indemnity without taking specific advice. When he became aware of this, he commissioned his own legal opinion and presented it to the council in September 2013.

Mr Barrett's advice was unequivocal - the indemnity was unlawful. That appears to have been the trigger which sent the council scurrying off to Mr Kerr whose report comes to the opposite conclusion. The problem with all that is that the council only sought legal opinion as recommended by the auditor 22 months after agreeing the indemnity.

Confused? Well, the bottom line is that the council is throwing down the gauntlet to the Wales Audit Office and preparing for yet more litigation and exorbitant legal fees, all to satisfy the demands of Mr James.

Mr Barrett on Public Interest Reports

After the hysterical tone of last night's press release from County Hall, here is the appointed auditor explaining in rather calmer tones why he sometimes (actually rarely) issues public interest reports.

Readers may recall that this is by no means the first time the council has had a run-in with an external body. One of the authority's bêtes noires was the Ombudsman for Public Services who frequently clashed swords with Mr James and Co. The BBC, the Western Mail and local newspapers have also all fallen foul of the Kremlin on the Towy at some point, not to mention the growing list of whistleblowers and members of the public who have had the misfortune to become entangled.

The council has responded to Jonathan Edwards' decision to request a police investigation of the matters covered in last week's WAO public interest reports with an explosive statement of its own. So bitter is the statement that it cannot even bring itself to name Jonathan, who is referred to rather childishly as "an MP".

The full text is shown below.

The first point which springs to mind is that the appointed auditor carried out a very lengthy and detailed investigation into the libel indemnity and pensions pay "supplement". We know that the council refused to disclose legal advice it had commissioned to the auditor - an extraordinary state of affairs in itself. We also know that the auditor gave the council advice and time to sort things out.

Now the council appears to be saying that the auditor's reports are misleading or even wrong, and that it has documentary evidence which will prove that.

It is hard to escape the conclusion that the council is accusing the Wales Audit Office of acting in bad faith.

The council should now publish any evidence which was either withheld from the auditor or ignored by him immediately, rather than play for time and drag things out for another month. It has all of this information at its fingertips, and there is no excuse for any more delays.

Statement on behalf of Carmarthenshire County Council’s Executive Board:
 There is a saying in this country that has been upheld over many years and that is – innocent until proven guilty.

However, this sentiment appears to have been lost on an MP who penned a letter, copied to the press, which finds two Carmarthenshire County Council senior officers guilty of varying charges without making any pretence of fairness or balance.

We understand he has asked two police forces to look into this matter prior to council even having the opportunity to look at all the information and debate these issues. This is premature at best, or political opportunism at its worst.

The letter contains libellous and factually inaccurate statements, which is ironic because if the officers concerned issued information of this nature they would be pilloried for doing so.

It appears the MP feels he has licence to publish any information regardless of checking all the facts which is extremely unfair on the individuals concerned.

Both officers robustly deny they have acted in any way other than a professional and proper manner and are confident that this will be supported by the evidence when the matters go before full council.

As an executive board they have our full support and we are sure that they will be vindicated, it would be wise if opposition politicians waited to see the full evidence before making judgement.

Update 17.39

The BBC and the South Wales Guardian are reporting that the council will hold an extraordinary meeting of the full council on 27 February to discuss the two reports from the appointed auditor.

This is just within the one month deadline set by the auditor and, unless there are further developments, it will allow Kevin Madge and the ruling Labour-Independent coalition to wave through their budget.

Kevin Madge, who has been promising full disclosure of what he says are the facts since November, says that councillors will be shown advice from QCs and other documents relating to the scandals.

The opposition Plaid group is meeting now to discuss motions of no confidence in Kevin Madge, Pam Palmer and Meryl Gravell as well as the chief executive and the acting Head of Law, Linda Rees Jones. Also on the agenda is a call for an extraordinary meeting of the council. It is unlikely that they will be satisfied with the offer of a meeting at the end of the month.


Despite the rapidly escalating crisis, the council's Executive Board met this morning to finalise a draft budget to go before councillors on 12 February.

Both the chief executive, Mark James, and the acting Head of Law, Linda Rees Jones, were present, with no sign that Kevin Madge is even thinking about suspending them.

Key points decided were that council tax support for the elderly will continue for another year after the last minute receipt of £236,000 from the Welsh Government.

The "Extra Care" development in Llanelli will go ahead with a very questionable £7 million back-of-the-envelope funding package which will necessitate the closure of the St Paul's residential care home.

Proposals to introduce charges for school transport for over 16s were dropped, as were proposals to chop lollipop patrols, close a disabled children's respite care centre and introduce parking charges for blue badge holders. The county's youth service and the libraries get a one year reprieve. Plans to cut the flood defence programme have also been put on hold for the time being (at least until it stops raining).

Forty plus other cuts outlined in the recent budget consultation are due to go ahead.

Council tax will rise by 4.7%.

Update 12.55

Dyfed Powys Police have confirmed that they are liaising with the Crown Prosecution Service and a second police force following the Jonathan Edwards' intervention.

Jonathan Edwards, MP for Carmarthen East and Dinefwr, has written to the Chief Constable of Dyfed Powys Police to ask for an investigation of the circumstances surrounding the unlawful decisions and payments made "contrary to law" to the council's chief executive, Mark James, to determine whether there has been gross misconduct of public office.

The Plaid press release (full text below) says that the decisions involved over £55,000 of unlawful expenditure.

The true figure could be significantly higher. Not only is litigation still ongoing under the indemnity, but Jacqui Thompson was ordered by the court to pay some £40,000 in costs in respect of the counterclaim which was underpinned by the unlawful indemnity. The discrepancy between the amount she was ordered to pay and the expenditure identified by the auditor has so far not been explained.

In addition, the pension payments exclude the as yet unknown cost of the specialist financial and legal advice which the council commissioned before paying Mr James his "salary supplement".

It is understood that Jonathan has asked for any police investigation to be handled by a different force because of the close links which exist between the county council and Dyfed Powys Police.



Plaid Cymru Member of Parliament, Jonathan Edwards, has requested the Police investigate Carmarthenshire County Council’s Chief Executive, Mark James and Head of Administration and Law, Linda Rees Jones for possible Misconduct in Public Office following highly damaging public interest reports from the Wales Audit Office which conclude the Council had acted unlawfully in two key matters.

Wales Audit Office reports published last week (Thursday 30th January) investigated the decision of the Council’s Executive Board to indemnify the chief executive’s legal costs to launch a libel counter-claim against a critical county blogger, and the decision of the Executive Board to enable its Chief to avoid tax he would have been due to pay after a change in the law relating to pension contributions for high earners.

Instead of paying employer contributions to the Local Government Pension Scheme, “pay supplements” worth £28,750 were credited directly to Mr James on top of his salary.

On the libel indemnity, the Auditor concludes the local authority did not have the power to agree the indemnity - costs of which currently stand at £26,426 - and that the report given to members of the authority’s Executive Board to make a decision was not representative of the Counsel received. “The cautious and reserved terms in which Counsel expressed his opinion to the Council are not reflected in the report to the Executive Board. Instead, the report represents his advice in unequivocal terms – that the indemnity can be granted but only in exceptional circumstances, although these were not defined”, the Auditor said.

The Auditor further stated that the Chief Executive took part in the decision-making process “whilst having a disqualifying financial interest in the outcome of the decision.”

The report, written by the authority’s Head of Administration and Law, Linda Rees Jones, has been branded a “sexed-up dossier” by Welsh Assembly Member Rhodri Glyn Thomas.

In an astonishing revelation, the Wales Audit Office has since disclosed that the council did not seek legal advice specifically on the indemnity as it was advised to by the Auditor, but instead relied on general legal advice it had sought four years prior to taking the decision.

This revelation, MP Jonathan Edwards says, raises serious questions as to whether elected members were deliberately misled by the senior officers to ensure the indemnity was approved. Mr Edwards stated the Auditor’s new comments suggest misconduct of public office has taken place in that public officers have “wilfully misconducted themselves to such a degree as to amount to an abuse of the public’s trust in them without reasonable excuse of justification other than to ensure the indemnity was granted.”



Outlining his reasons for contacting the police, Jonathan Edwards MP said:



“The unlawful indemnity and unlawful pension arrangements have seen over £55,000 of public money spent for the benefit of the Chief Executive.

“The reports are extremely damaging.  In my mind the findings justify dismissal of senior council officers and should make the council’s elected leadership stand down from their roles. 
“But even more worrying is the disclosure of the appointed Auditor that the council did not seek specific legal advice on the lawfulness of granting the indemnity. 

“The documentation presented to the Executive board when deciding to approve the indemnity was a report created by council officers. It was not based on specific legal advice which the council was advised to obtain, nor was it representative of even the general legal advice obtained four years earlier.

“I have to question on what evidence exactly the documentation was based to justify a blank cheque of potentially tens of thousands of pounds for the cause of the Chief Executive and whether any criminal activity took place in the process.

“This astonishing revelation from the audit office leads me to no other conclusion than misconduct of public office has taken place. By producing what appears to be a grossly unqualified report, and taking part in the decision-making process, my reading of the legislation suggests these public officers have wilfully misconducted themselves to such a degree as to amount to an abuse of the public’s trust in them without reasonable excuse of justification other than to ensure the indemnity was granted to benefit the Chief Executive.

"Furthermore, given that officers drew up the report without any specific legal advice, questions need to be asked as to whether the officers were aware that their actions might be judged to be unlawful but decided to press ahead despite the risk of the grave consequences. 

“This is a deeply regrettable situation to have been put in. When I entered politics I never thought I would have to report civil servants to the Police - this is the darkest day of my career. However, where such serious activities have taken place, I believe it is my duty as a Member of Parliament to stand up for the taxpayers I represent.

"I have contacted both Dyfed Powys and South Wales Police forces to request an investigation into the whole affair in order for the police to satisfy itself that no such misconduct has taken place.

"The Labour-run Council seems intent on challenging the independent Audit Office reports, and the Auditor's recommendation to rescind the indemnity looks set to be rejected. With the Council leadership digging their heels in and court action seemingly inevitable, my duty as an elected member must be to protect Carmarthenshire tax payers from footing the bill for further expensive legal costs."

As we prepare for another turbulent week, it is worth taking a few moments to reflect on the events of the last few days and look at some of the other council stories which have got lost in the storm.

According to County Hall insiders one senior figure in the ruling administration reckons that it's all just headlines which will be forgotten in a few days. They could not be more wrong.

Councillors, the Plaid office in Ammanford, the blogs and the press have noticed a big change in the public mood. There is real anger and disgust at what has gone on, and things are no different in Pembrokeshire.

Perhaps this is part of a wider shift in public opinion across Wales. Yesterday saw a large demonstration against council cuts, particularly as they effect post-16 Welsh medium education, in Merthyr Tydfil. In Ceredigion a Cymdeithas yr Iaith protest against the Welsh Government's cuts and broken promises attracted around 50 people in Cardigan yesterday, including young families and pensioners, despite appalling weather conditions.

In Carmarthenshire events unfolded thick and fast on Thursday and Friday, and at times it was difficult to keep up. One of the things which is likely to turn out to be very significant is a statement put out by Mr Anthony Barrett in response to the council's extraordinary press release on the affair.

In its statement the council sought in classic Carmarthenshire fashion to insinuate that the Wales Audit Office was either incompetent or lacking in integrity because it had "appeared to change its mind" over the libel indemnity. That, it turns out, was utterly untrue.

In summary the auditor had advised the council to get legal opinion on the legality of the indemnity before going ahead.

That advice was either ignored or rejected, and the trial went ahead including Mr James's unlawful counterclaim. Kevin Madge's claims at an Executive Board meeting on 6 January that the council had tried to settle the case before it reached court now look very hollow.

When the auditor became aware that the council had ignored his recommendation, he obtained his own specialist advice and provided a copy to the council in September 2013.


Questions which need to be answered include:

• Who saw the auditor's advice in September 2013? Were Kevin Madge and other senior councillors made aware of it?
• Who was involved in the 30 January press release? Mark James, almost certainly, but what part did Kevin Madge have to play in it?
• It is also extremely likely that Kevin Madge and most likely other senior councillors saw the auditor's "consideration reports" back in early November. Those reports gave the council a chance to back down, but it did not. Given that Kevin Madge knew what the reports published on 30 January would say, why did he continue to defend the actions of the chief executive and others to the hilt?

What happens next?

All the indications are that the chief executive, Kevin Madge and the rest will try to ride out the storm. The most obvious tool will be delaying tactics.

The opposition will try to call an extraordinary meeting of the full council. The next full meeting of the council is scheduled to take place on 12 February, and as things stand that will be taken up with approving a draft budget for 2013/14. Opposition councillors have made it clear that consideration of the budget should be postponed because of the breach of trust which has occurred. The Plaid group has also been arguing strongly for a complete revision of the budget proposals put together by senior officers, proposals which are being backed as usual by Kevin Madge, Pam Palmer and the rest.

The constitution, which has been repeatedly tinkered with in recent years, says that councillors, the monitoring officer or the chair of council may ask the chief executive for an extraordinary meeting. There is nothing to say that he must agree to the request.

The monitoring officer just happens to be Linda Rees Jones, the acting Head of Law, who is also heavily implicated in the scandals, while the Chair of Council (Terry Davies, Lab) is no more likely to call an EGM than turkeys would vote for Christmas.

It is quite possible that opposition councillors will find that any request for an EGM is either rejected or put off for as long as possible, with Kevin Madge and the chief executive arguing that it is essential that the budget is dealt with first. There have already been suggestions that the auditor's reports should wait until the scheduled meeting of the full council on 7 March, which is also outside the one month time limit set by the auditor.

Kevin Madge: "Cuts of Biblical Proportions" as the gravy train rolls on

While all this is going on, evidence continues to emerge of the council's warped spending priorities.

A recent freedom of information request showed that the council spent £120,000 on rent, fees and hospitality at Parc y Scarlets in 2012-13. That is a backdoor subsidy, and also completely unnecessary because the council has plenty of venues of its own where corporate junkets could be held for a fraction of the cost.

The £120,000 comes on top of the refinancing package and the Marstons car park deal which gave the club the best part of £1 million in additional aid in 2012-13 alone.

Another report shows that the council spent a staggering £2.8 million on external consultants in 2012-13. A large chunk of this was for technical consultancy, but not all of it. One of the difficulties, the report notes, is deciding what actually constitutes consultancy. Not included, it seems, were modest fees paid to Rev Matt Bownds of Carmarthen's Living Word Church (notable members of the flock include Mr James) for providing soft skills training courses.

The list goes on and on, and includes other such essential items as Towy Community Church's bowling alley and the relocation of hundreds of council staff from council owned premises to rented office space in the Eastgate development.

Then there is the huge amount spent on legal fees. Much of it is incurred in child protection cases and the like, but significant sums have been spent on unnecessary legal advice and court actions (and not just against Jacqui Thompson).

For well over a year now Kevin Madge has been warning of massive cuts to spending coming down the track. You would think that the Labour-Independent coalition would have tried to rein in wasteful spending and ensure that every penny the council could get was clawed in from deals such as the Scarlets-Marstons car park sale.

When you look at the list of proposed spending cuts, many of them involve relatively small sums but will have devastating consequences. Quite a few of the 51 proposals included in the recent consultation would result in savings that are dwarfed by money being spent on consultants, lawyers, Parc y Scarlets, the proposed new outsourced "extra care facility" in Llanelli, the council's press and PR operations, etc., etc.

Closing a respite care home for disabled children would save £200,000 per year. Weigh that against the fees paid to external consultants. Cutting spending on the Mentrau Iaith and other language services still further would save just £60,000. The council spends more on fighting the chief executive's legal battles and posh cars.

Perhaps if less had been lavished on Parc y Scarlets, the future of playing fields, bowling greens and cricket pitches used by ordinary people would not now be in doubt.

No wonder the Auditor General for Wales recently issued another report which looks at the challenges facing local authorities. The introductory blurb reads as follows:

"[The report] explores the effectiveness of their financial planning, their approach to financial decision making and the actions they are taking to minimise the impact of significant budget cuts. It also considers the extent to which councils understand the impact of their actions".

The report highlights quite a few examples of what it considers to be good practice by councils around Wales. Carmarthenshire, which likes to boast that it is the best run local authority in the country, is nowhere to be seen.