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.

Massive payout

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

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37 Comments

    1. Ester Giles is Correct. In business a company’s accounts are required to be audited and filed with The Registrar of Companies. CEOs and Directors who fail to ensure this procedure is complied with to the satisfaction of The Registrar may find themselves censured which would show in a Search of the Company’s which, anybody is entitled to make, at no charge, or for a small fee. Surely political parties of any size must be responsible, just a few years ago Labour Party revenues were extremely healthy due to the sheer size of membership subscription alone. Due diligence must be done and Seen to be done.

  1. Excellent questions…I hope we get the answers and that where greater accountability is required, it will be put in place.

  2. The payment of this huge amount of money which has set a precedent for another 40 odd cases including the ex- General Secretary Lord Iain McNicol, certainly needs investigation. Are we members being taken for a ride?

  3. absolutely. I was at that party conference and remember the consternation on the stage as to why members were asking questions of the financial statement and not just waving it through

    Gone on too long – we need answers

  4. Brilliant insightful comments Esther, well said. The lack of transparency and democracy around use of funds is shocking in Labour, this needs to change. Wasting money on court costs and opening the door to further costs is missuse of party funds. Equally, not giving proportionate money to CLPs and sending millions to party HQ creates a “top down” elite culture of over paid officials.

    All of this was in members feedback in the Democracy Review. So what has happened to these worthwhile recomendations of good democractic practice and governance? Apparently disregarded in the clamour for “optics” for Keir and his left bashing for the cameras, at great cost to the party on many levels.

    This needs to change!

  5. If we continue to play the Capitalist game then we should structure, and govern ourselves like a corporate entity.
    It actually beggars belief that a muti- million pound, mass membership organisation (like the Labour Party) is run along the lines of a small private WMC, without the governance that such must have.
    – Effectively the members are Shareholders.
    – There should be a professional method of controlling income and expenditure.
    – The books should be AUDITED AND SIGNED OFF by truly independant, proffesional auditor.
    – Financial information should be provided to all members (balance sheet as a minimum) ANNUALLY in advance of an AGM. And there should be a proper report by the Treasurer given at Conference each year.

    There is more….

  6. For David Evans, could you please answer the four questions posed by Esther Giles:

    In the instance of the circa £0.6m 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?

    Thank you.

  7. At last! A voice for proper accountability. I hope you have the tenacity to stick out the obfuscation you will face. Best wishes!

  8. An eye opener. I’d never realised the party’s funds were so badly managed.
    It sounds like the system was set up with the specific intention to hide embezzlement and corruption.

  9. Thank you Esther. Very important points made. I wish you success. You certainly speak fOr me.

  10. Excellent piece, we need clarity on this, who made the decision on the legality of the case against those involved and having done so who decided on the amount.
    What was Starmers input to all this.

  11. This is a massive eye opener. I had no idea that the LP finances were run in such a random and secretive manner. There is definitely a need for more grass roots involvement in the allocation of resources. There must be more openness too. I really want to know who’s been pulling the purse strings, and I want the person/persons to be held to account.

  12. I have raised the issue of funding (or lack off) to CLP’s over the years,expecting Secretaries and Membership Secretaries and other Core Officers to do these time absorbing jobs without proper remunerations.No decent employers would behave in this way.

  13. Esther
    Absolutely spot on. You will have my support in unravelling this opaque mess. You can make a real difference with your professional skill, you’ll have my vote. Good luck.
    Best regards
    Graham Peck

  14. Why are you doing this through a faction, Grass Roots and not the official Team Labour website? There may be a need for refiem but you shd be pressing your case through proper party channels not a faction. We have had enough of this kind of thing. This seems to be a veiled ‘ get Starmer’ ploy yet again. So no I will not be voting for you.

  15. All this is very interesting, new to me. And somewhat shocking. But I’m not surprised in light of recent events. Thank you Esther.

  16. Jack Dromey, now MP, but then a Unite Official, was Labour Party Treasurer. I seem to recall financial decisionsbeing made that he wasnt aware of.

  17. Great post, Esther! Looks like there’s a lot of overdue work to be done to secure transparency and democratic accountability. I think we need you to take on and see through the job!

  18. At last, someone that actually has some knowledge of finance! You are badly needed!!!!

  19. Thank you, comrades, for your comments. I will respond in detail tomorrow
    Solidarity
    Esther

  20. Thank you all for your comments, comrades. It’s good to know that so many people want to see the changes I’ve described, and have taken the time to say so.
    When I wrote this blog, I thought I was writing something with which it would be impossible to disagree. Who doesn’t want good governance? Who doesn’t want people making decisions to be accountable? Who doesn’t want Labour to be democratic? Aren’t all of these things obvious for a democratic socialist party?
    And yet, I’m really uneasy with the opacity of the Party’s finances. For me, it’s indicative of a more general problem with decision making. And I’d like us to address this governance problem in all areas, not just in the finance arena.
    One respondent has said that I’m being factional- presumably in drawing attention to the pay-out relating to the BBC Panorama programme. I would challenge you: in what way is it factional to challenge decision making processes; to ask the questions that I have asked? Because democracy is about power. In a truly democratic organisation, all members are equal. Those who resist democracy resist equality. They want to keep their power and they don’t want equality.

  21. I agree the members should be better informed as to how money is allocated and what it is spent on. I received a letter today thanking me for remaining in the party and informing me that subs have increased for the coming year. So someone has decided to increased our membership subs but we still don’t get to see how the money is used? Not my idea of democracy or socialism.

  22. Hear, hear. Keep asking those awkward questions, Esther. And good luck in your bid for Treasurer. Seems to me, you will be a good pair of hands.

  23. Good luck Esther we certainly need someone like you in the position of Treasurer. I totally agree we need more transparency in the Labour Party
    As a member, I often feel our views are ignored
    Good luck Esther

  24. Totally 100% agree with you Esther and the majority of comments above. We absolutely need honest accountability and for it to be clearly documented. There is no room for secrets in a socialist democracy. Good luck, you definitely have my vote.

  25. Labour is antedeluvian in financial and Membership outlook, possibly because of its lack of financial or other accountability. That was what McDonnell and Corbyn planned to change.. except so many outright lies were – and still are – promoted against Corbyn, that it is no surprise that he stepped down, if only to gain a space to breathe. However, before he did, the Democracy Review and other Delegate decision-making changes within Party Conferences, did alter the balance a bit.. that currently being at risk from the controlling right wing of the Party. A tight rein on the finances to prevent future massive giveaways, would certainly be a step forward. As would a fairer distribution of finance – and fair treatment of Membership rights – across the CLPs.

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