Financial rules were not followed for costly review

Treasury Minister Eddie Teare MHK

Treasury Minister Eddie Teare MHK

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Ministers defended a decision to spend £775,000 on a consultants’ review without going to Tynwald first and without going through the appropriate financial procedures.

Giving evidence to the Public Accounts Committee, Treasury Minister Eddie Teare conceded it may have been advisable to inform Tynwald about the scale and the cost of the project.

The PAC is investigating the decision to spend £775,000 on consultants to review the National Insurance Fund and the wider benefits system.

Consultants for the second phase of the project were appointed following a decision by the Council of Ministers in September last year, without it going to competitive tender or a waiver being issued by Treasury under financial rules.

In a highly charged public sitting, the Treasury Minister and Minister for Policy and Reform Chris Robertshaw were grilled by backbencher Alfred Cannan who they have accused of prejudging the issue and have called for him to stand down as PAC chairman.

Mr Cannan, who says he has no intention of resigning, has accused CoMin of pursuing ‘the politics of panic’ and ‘failing to prioritise policies’ after it announced all options need to be considered to prevent the collapse by the year 2050 of the NI Fund – which pays for state retirement pensions, the Manx pension supplement and part-funds other welfare benefits.

At last week’s PAC hearing, he asked Mr Teare: ‘With hindsight, do you think it would have been advisable to have gone to Tynwald to inform Tynwald of the scale and costs?’

‘Arguably yes,’ replied the Minister.

He was giving evidence alongside chief financial officer Malcolm Couch who told the committee that Treasury had the vires or power to withdraw money from the NI Fund and it was not correct to say that Tynwald approval was needed first.

Mr Cannan asked whether the spending of £775,000 had been included in the Budget. Mr Teare replied: ‘It wasn’t in the Budget but in my opinion it wasn’t required to be because we had the vires. We thought we had gone through the proper processes.’

Vice chairman Brenda Cannell said the committee was mystified why an ‘FD8 waiver’ had not been issued for the second phase of the project, allowing it to bypass the competitive tender process.

Mr Couch admitted it could be argued that the strict terms of the financial regulations had not been adhered to but as CoMin had already made the decision to proceed, Treasury could not give a retrospective waiver.

Mrs Cannell said this was not in accordance with financial regulations. ‘So you’re saying CoMin are all powerful and they could over-ride the law?’ she asked.

Mr Teare replied: ‘We were satisfied we had the vires to do it. We were working with CoMin on this project. We were both there at the meeting of Council.’

‘So you can ignore the law?’ Mrs Cannell pressed.

‘I didn’t say we ignored the law. I said I was satisfied the correct procedures were taken,’ the Minister insisted.

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