Carmarthenshire Council attacks Wales Audit Office over findings

Mark James won a libel action against blogger Jacqui Thompson last year

A council has criticised a spending watchdog in an escalating row over a pledge to cover costs in a libel case.

A Wales Audit Office (WAO) report found that Carmarthenshire council's decision to pay the court costs of its chief executive in the case was unlawful.

The council has now published correspondence which it claims shows the WAO was satisfied the authority was "within its rights".

The WAO responded by saying it stood by its report.

The watchdog said the matter should be resolved "in the council chamber or the courts", adding the council had not published all the correspondence.

In a report last week, assistant auditor general Anthony Barrett said council chief executive Mark James was unlawfully given an indemnity against potential libel costs.

He said the authority "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".

It concerned Mr James's libel action against Jacqui Thompson, a blogger who was arrested after filming a council meeting on her mobile phone.

He won the case and Ms Thompson was ordered to pay costs of £23,217.

Carmarthenshire has paid out more than £26,000 in external legal costs since 2012 under the decision.

Mr Barrett added: "The libel counterclaim is still ongoing and it is unclear what the final external legal costs to the council will be."

Responding to the report last week, the council said it remained convinced it had acted correctly, and claimed the audit office had not objected to the policy when first consulted on it.

But on Thursday a statement on Carmarthenshire's website went further.

It said: "For almost two years the Wales Audit Office gave the council every indication that it was quite satisfied that the authority was within its rights to indemnify a council officer to bring a counterclaim in response to being sued for libel and was fully aware of the legal advice that the council had received supporting its action.

"In fact, some six months after the indemnity was granted, the auditors - responding to questions raised by a local resident - repeatedly confirmed that they were satisfied that the council was acting within their powers.

Legal advice

"We feel the only way to prove this is to publish the correspondence between ourselves and the auditors so that everyone can see for themselves what has taken place."

The council also published legal advice it had received.

In its response to the criticism, the WAO said: "The appointed auditor stands by the conclusions set out in his public interest reports, published last week.

"The proper place for this matter to be resolved is in the council chamber or the courts.

"We await Carmarthenshire council's meeting on 27 February and the council's subsequent decision on the reports."

The WAO also stated "the council has not made available all the correspondence between us".

The deputy leader of the Plaid Cymru opposition group on the council, Tyssul Evans, said: "As things stand, the council leadership has yet to provide the magic bullet which vindicates the astonishing position it is taking in contesting the findings of the independent audit office."