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30th January 2014

Pembrokeshire and Carmarthenshire councils acted unlawfully over payments

The appointed auditor for Wales has criticised Pembrokeshire and Carmarthenshire councils over unlawful payments to chief executives in two separate reports published today (January 30).

Anthony Barrett's reports show that Pembrokeshire's Bryn Parry Jones and Carmarthenshire's Mark James had been given the go-ahead to opt out of the Local Government Pension Scheme (LGPS) to avoid potential tax payments following a change in the law on pensions relief for high earners.

  • They were given cash payments in lieu of pension contributions so they could make private pension arrangements. The report states that this was unlawful.

Mr Barrett's report on Pembrokeshire Council also reveals senior officers were also given the option to opt out of the LGPS. It states: "The decision to allow certain senior officers at Pembrokeshire Council to receive payments equivalent to the employers’ pension contributions if they opt out of the Local Government Pension Scheme (LGPS) - to avoid potential tax liabilities - was ‘unlawful’."

  • Carmarthenshire Council was also criticised on a separate issue. The report says that chief executive Mark James was also unlawfully given an indemnity for a libel counterclaim.

The auditor concludes that, "the council does not have the legal powers to make such payments and there were inadequacies in the processes adopted by the Council when making the decision."

Read more on this story

Wales Audit Office: Pensions opt-outs at Pembrokeshire Council 'unlawful'

Wales Audit Office: Carmarthenshire Council's pension and libel payments 'unlawful'

BBC news: Pembrokeshire and Carmarthenshire made unlawful payments, says watchdog

WalesOnline: Councils acted unlawfully over tax avoidance payments to executives



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