I am standing for the position of Labour Party Treasurer because I believe the party’s finances need radical improvement in three essential areas:
- Democracy requires meaningful member participation, which requires, in turn, good communication of financial information and the opportunity to engage as equals – a core tenet of socialism.
- Good governance requires clear structures and processes for financial decision making and accountability throughout the Party.
- Socialism means that workers – and not the bosses – control the means of production. This being so, how much more should the Labour Party’s finances be controlled by its members?
My first experience of discussing party finances came at the 2017 party conference.
Part of my preparation as a CLP delegate was to read through the annual report and the financial statements and to prepare questions (in my professional sphere as a finance director in the NHS, I was used to reading balance sheets).
When the time came for the presentation of the financial statements, there was a request for any questions with the impression that the business would move swiftly on.
I was invited to the platform and asked my questions. Some of my questions were for more information about the figures provided in the accounts – I’m not the only one to have noted that the accounts provide the bare minimum to satisfy the Electoral Commission, and little enlightenment for members.
It almost seemed that no questions about the accounts would ever be expected.
So, who is it, I thought, that decides how the money is spent? To whom are they accountable? Based on the performance at conference, it was clear to me that the accountability to members was perfunctory at best.
Fast forward to 2020, and a decision made in July 2020 to pay out what is reported to have been a c£0.6m settlement to former party staff members in response to their High Court libel action. This was despite legal advice, apparently, that the Party would win the case.
Following queries from local members (I’m CLP secretary in Bristol North West), I wrote to the General Secretary to ask who made this decision to use the party’s funds, and to request the party’s schedule of delegation (which should set out how the NEC has delegated decision making powers regarding spending and other items).
I’ve had a holding response, and I’ll share the actual reply when I receive it.
Governance is to an organisation what foundations are to a wonderful building – without good governance, the building will, sooner or later, collapse.
I really want to see what the party’s governance arrangements are: what committees there are that report to the NEC, and what delegated authority these committees and individuals have to commit party money.
In the instance of the pay off to former staffers:
- Who considered the legal advice?
- Who made a recommendation to pay them off?
- Who agreed to commit £0.6m of party funds to do so?
- Who carried out a risk assessment of the likely impact of ‘caving in’ at this stage?
As an ordinary Party member, I don’t know the answers to any of these questions, and, as an equal, I think I should – and so should all of us
I want to know who approves the annual budget and how this is monitored. I’ve just found out through ‘Labour Funding Scandal’ that there a Business Board that has two CLP reps on it, and that they see financial reports. But some NEC members say that the Business Board minutes are “worthless”, and that NEC members don’t see the financial figures.
This isn’t acceptable – it seems as if nobody knows and nobody is accountable.
As an example of this, the Labour Party made a loss in 2018 of £0.66m. Was this planned? Was is forecast? If it wasn’t, then who is accountable? None of us ordinary members know the answers, and we should.
Similarly, on looking at the 2018 Party balance sheet, I can see that the party has c£12m net reserves. I’d like to know whether these reserves are earmarked for anything – a well-run organisation with clear objective should have plans as to how its reserves are intended to be used.
Allocation of member subs
Another issue regarding the budget is the allocation of member subscription fees between running costs (of Labour HQ) and CLPs.
In 2019, the party had £16.9m from membership subscriptions, of which £3m went to CLPs. If we are a grassroots, democratic organisation, engaging and working with our local communities, who decided that the money should be allocated in this way?
Don’t we believe that a well -resourced grassroots organisation is what democratic socialism is about?
Where can we have the discussion about all this? This is a good place to start.
Esther Giles, Bristol North West