The finance debate

One of the key debates, at least as far as the platform was concerned was the debate on whether to freeze the subscriptions again. The CEC had made their task harder by deciding to reduce the branch capitation payments. Until earlier this year, branches by rule, retained 10% of the membership fees paid by their members. The CEC implemented a 25% cut to these payments.

They proposed a special report confirming their actions and amending the rule to permit this to occur. The initial agenda had 19 motions critical either of the adjustment, or of the way it had been done and one in favour; it had seven motions calling for alternative subscription fee structures. By the time of the debate, the only survivors were the motion supporting the CEC, one removing regional committee discretion, one postponing it to later in the year and one criticising the way in which the CEC had behaved.

The debate took most of Wednesday afternoon. In the GMB, the senior full timer, and the only full timer with a whole union mandate is called the General Secretary & Treasurer. Gary Smith, for it is he, introduced the Finance report and then moved the Accounts. In moving the accounts, he made the following statement,

… we lost our way,  … there was far too much focus and spending on things like politics. There was little control over credit card expenditure and a culture based on licence and entitlement and a waste was allowed to sit; there was a lack of transparency and honesty in the challenges we face in our legal services and when questions were raised people were shot down

Gary Smith at GMB22

After moving the financial report, Gary also moved the CEC paper on subs and the rule change. There’s more in that speech but highlights we should remember include his threat to present Congress with an emergency motion to increase fees if the CEC position was rejected. He provided examples where branches were claiming more than 10% and spending it all on honouraria; also a new building was commissioned for Northern region while its membership was declining.  Hidden in this speech and the accounts is the unquantified risk of more payments to Unionline.

Having moved the accounts and report, there was a dreary bunch of speeches supporting the CEC position, reinforcing their calamitous view that the only choice we had was to reduce the commission or increase the fees and highlighting some bad behaviour at branch level, but never at head office. Andy Newman repeated, at length, the fundamentally right-wing argument that the GS mandate, from his election was more important than Congress … and he claims to be a left winger. He also eulogised the wisdom of regional secretaries in supporting activity; he’s obviously not read Monaghan on the historic use of such powers. While I had concluded the paper needed to be passed, many of these self-satisfied speeches and partial truths made me question if I was right.

After the procession of the regions, the debate on the final four motions started. Motion 26 supported the reduction in commission. M27 called for the elimination of regional committee discretion. Motion 33 which called out the rapid implementation and called for branches to receive the withheld Q1 payments was moved very effectively. This was followed by Motion 41, a stronger rebuke for introducing the reduction without permission from Congress. In moving Motion 41, Kevin Flanagan (NW&I, Manchester Central) introduced himself as last time delegate, last time speaker, he argued that the stagnant branch reserves could not have been built up without knowledge of both senior officers in the Union and the NAU. He argued that the implementation without Congress mandate was drawing on the Putin way of reading the rule book.

Gary Smith in his summing up let the cat out of the bag, while brutally rebuking Kevin for his Putin gibe he qualified the choice as only existing if the CEC planned a balanced budget for 2022 and that from this financial year, the Union was £2.5m adrift, which sounds like the Unionline costs to me.

While writing these notes it became clear to me that understanding the costs of ‘letting the past GS go’ might help and if the two Regional Secretary posts that have been retrenched involved an enhanced redundancy payments and of course, the always hidden pay-offs involved in complaints remediation as exposed in the Monaghan Report (see §106) . Another issue of note is that the one big increase in expenditure in 2021 was on strike pay, where we spent ~£6¾ m up from ~£2m, of which 50% was on the British Gas dispute.

So what do I think?

I spent two hours with the Head of Finance trying to understand the need for this cut because on first review of the accounts, I don’t see a £1½m problem, not even £1½m per year.   

I have concluded that it is desirable to freeze the subs. The next increase breaches an important psychological threshold and the GMB’s fees are [just] below IWGB & UVW but above Community’s.  I believe the CEC have acted in an arrogant but not ultra-vires fashion in terms of their powers and the rules.

I accept that there is a problem having a scheme which continues to pay to branches which do nothing as this just increases the amount of ‘dead’ reserves, but there are better and more targeted solutions to this problem. Whatever we do, targeting the problem branches and remediating them is needed. I also add that I am not sure that £10m branch reserves is a problem for an organisation with a £60m turnover.

I believe that this can only be a single year solution, and that if the problem is that we don’t have enough members and/or are not growing the membership and/or that Unionline will continue to cost money on an annual basis, see Note 26 on the accounts, then we need better answers. I am also concerned that the balance sheet is growing and wonder why we don’t use some of that money. It was also reported that we’d had to sell the convalescence home and that while the Union was looking for a replacement, none had yet been found. I also asked if the pension scheme was doing well enough for the Union to take a pensions holiday and was told there were legal barriers to this; however, the pension fund is going through its triennial actuarial review which given there was a £30m pension scheme actuarial gain, I assume we will get good news.

The accounts were approved, and the paper passed.

I had a think as to whether this should be published outside the GMB. The debate is on youtube and the accounts will be on the Certification Officer site, although I am not sure if they are accompanied by the notes there. I finished this on 2^nd July.

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