UUP treasurer responds to points raised @bobballs

22 08 2009
UUP finances

Electoral Commission graph on UUP finances

Earlier this month, I put up a post about the finances of NI’s political parties. I referred to all the main parties, but UUP Treasurer Mark Cosgrove has since come back in reference to what I wrote about the UUP.

[He commented in a post, but I think it’s fairer to Mark to reproduce & discuss it here – as Mark’s comments will otherwise be locked away in an archived item which no one will see).

So here goes:

  • I referred to this BBC report where Treasurer Mark Cosgrove paid tribute to all the members for turning finance around. But in the statement of accounts, Mark said stability came about despite (falling returns from) members, and the main credit for the turnaround is due to UUP management team. I asked how could both statements be true.

Mark says: Their is no contradiction in the two UUP statements. Our members were levied a record low (quota payments from Associations) but significant membership money helped maintain overall member income.

  • I asked how the UUP East Belfast branch accounts for 2008 published by the Electoral Commission could show entry of £175,825 as ‘costs of refurbishment’, and yet the overall UUP accounts show continuous slide in expenditure.

Mark says: The centrally published figures are only a fraction of the real balance sheet value of the collective party. Election Commision rules dictate that only Accounting Units with revenue above 25k must report their income seperately. This i why you have East Belfasts figures (of which Victoria Branch is a member). In addition to this several other UUP Associations own property and liquid assets worth several million pounds but because they have not got an income in excess of 25k they are not published. Amongst them are Fermanagh, Lagan Valley, Newry and Armagh, Foyle, East Londonderry, etc, etc. What your graph shows is the net worth of the central party is significantly in excess of all other political parties in NI.

  • I said that UUP income has flatlined for 18 months. All other parties increase income before the 2007 Assembly elections except the UUP. (Inability to increase fundraising to run an election machine is serious evidence of major fundraising problems.) I then stated that the Party must find new sources of income – and whether the UUP would go cap in hand to Central Office?

Mark says: In terms of our relationship with the Conservative Party the Conservative and Ulster Unionist Joint Committee, of which I am co Treasurer, is responsible for fund raising for the General Election. We have significant fundraising plans in place.

Many thanks for the above Mark, very interesting stuff.

Have a couple of points in response…

On the first point, the BBC reported that ‘Mr Cosgrove said the transformation was due to a tremendous effort by members‘.

Mark’s conclusion in the statement of accounts reads:

‘This financial stability has been achieved despite the fact that the combined membership and quotas that we have requested from our members represent the lowest amounts the modern party has ever levied.’

I still think there’s a conflict. This looks as though you’re saying the financial state of the Party is both because of the members and in spite of them. But okay, if you levied record lows from members but maintained member income, it must mean you had more members to levy from, right? But then you say that combined membership generated the lowest amounts (suggesting membership had fallen)?

I guess the question to ask is how many members does the UUP have. In the 2007 accounts David Campbell could not put a number on members (as no central figures were held), but you can now as your levies are pretty detailed. How much did membership increase between 2007 and 2008? Help me to undertstand how those statements do not conflict…

The second bullet point is extremely interesting. You said that The centrally published figures are only a fraction of the real balance sheet value of the collective party’.

I had no idea that most of the financial shape of political parties here was completely unknown to the Electoral Commission. Mark says here that millions of pounds of assets and liquid assets (cash is a liquid asset) are held but legally undeclared. For me, this raises huge issues about the quality of transparency these laws were designed to provide. (Can that explain how Sinn Fein – famously the richest party in Ireland – managed to have zero assets between 2004 and 2005?)

What use can the legislation governing party financing be if the true and complete financial picture of a political party can be largely unknown? I’m grateful to Mark for his knowledge on this. Consider the possible loophole – something so simple as suppressing an accounting unit’s income can allow political parties to sail below the radar of the Electoral Commission! Have I understood that properly? (I stress that I’m quite sure the UUP are acting entirely properly and I’m not accusing them of suppressing income/misleading the Commission – am just amazed by possible implications of the legislation.)

The final point is also extremely interesting. Mark says that the Conservative and Ulster Unionist Joint Committee is responsible for fundraising for the General Election. Now, I’m not being funny Mark – I do appreciate your commenting here – but wouldn’t this sit at odds with your statement to the Antrim Times, when you said:

“We have not asked the Conservative Party, nor is there a mechanism for the Ulster Unionist Party to receive a single, solitary penny from the Conservative Party, so any inference that we are doing this for financial reasons is entirely wrong.”

Surely, if the Joint Committee had no fundraising powers this statement would be correct. But as the opposite is true, the mechanism actually is there for the UUP to receive funding, right? And that mechanism is reinforced reportedly by a joint bank account?

If you follow me, and if the Electoral Commission figures mean anything (!), then it shows that the UUP has not increased income since mid-2006. And levies received from members were at a record low in last accounts. So at a time when it would seem that UUP funding streams are drying up, we learn that the Conservatives are co-responsible for raising finance from which the UUP will run candidates. Isn’t there an apparent inconsistency in there?

Besides, is it so wrong to say that the UUP will receive a certain amount of finance from the Conseratives? Why not just say it and be comfortable with the notion that allies will ally their resources (which includes finance)? Or perhaps the UUP has modifiled its position already?

I’ve gone on at some length here – but your input has been really thought-provoking Mark (it stimulated the political geek in me). Do not be offended, I’m just trying to get at the core of certain issues. Many thanks again for contributing Mark…

Advertisements

Actions

Information

11 responses

22 08 2009
cublue

You seem to have missed the point, according to the recent press release by the Chairmen of the respecive parties there will be no UUP candidates in the Westminster election they will be Conservative and Unionist candidates representing the Joint Committee of the UUP and Conservatives and will take the Conservatives whip if elected. Therefore it seems the UUP will not require any funds for an election campaign, but will however need extra funds from somewhere to repay their extensive loans.

However the transaction re Cunningham House is unclear, where the UUP sold the buiding to a partnership, based on a 2007 valuation at the height of the market, of which they now own 80%. The strange thing is the buiding is still used as security for the UUP’s debts a very generous partner indeed who overpaid for their share and then allowed their share to be used for security for the UUP debts. If the buiding was revalued to current values what would the balance sheet show now? If a 40% reduction was used probably very little. Who is the generous partner and what do they get out of it?

24 08 2009
Shuffling Geisha

Interesting, re Cunningham House, I take it the current tenants are not the over generous partners? UUP sold around 20 per cent of the place to mystery buyer before moving and renting the place out so as well as a lump sum for the 20 per cent they also get a regular rental income. Wonder how much the rental bill is for a gaffe. It’s some kind of multi media company renting there isn’t it?

Am a little confused re constituency associations not having to declare assets if they do not receive an income from them. UUP HQ certainly knows who owns what and I am pretty sure that information was collected from associations a couple of years ago under the premise the Electoral Commission needed to know.

Very smoke and mirrors, these party finances.

24 08 2009
Michael Shilliday

Not surprised that you’re confused shuffling, being the thinking being that you are. How is UUPHQ supposed to know if it’s accounting units are fulfilling legal requirements unless they know themselves who owns what and how much income comes in from where? UUPHQ does need to know before it can determine what the EC needs to know, thats why accounts are submitted.

24 08 2009
Shuffling Geisha

Ahem, yes, find someone in the real world who will give you a job first Michael and then perhaps people will take you seriously …

25 08 2009
Michael Shilliday

You first!

25 08 2009
Editor

Bob great job flushing out some of these issues. However I think Cosgrove needs to be clear what the financial arrangements are re. Cunningham House. Has the place been sold or not? Clear as mud to me. And as for all these invisble assets…what are they and why do they not appear in the balance sheet? I’m very confused. Accounting…but not as we know it.

25 08 2009
Shuffling Geisha

? I have, several and never been sacked by any of them

25 08 2009
Mark Cosgrove

I will try to clear up some of your various questions but this will be my final correspondence on the subject as I am up to my eyes in it. I am genuinely trying to help inform your debate(or else why would I have responded in the first place)

All of this information is on the public record (if you know were to look).

Cunningham House.
The UUP owns 80% of an Limited Liability Partnership whose main asset is Cunningham House. We sold 20% of the LLP shares to a third party who paid what they obviously considered to be a market rate in December 2008. The potential devalution is a non issue as this transaction took place at the end of the Aaccounting Reporting period.(IE The accounts are for 2008 and the transaction happened at the end of 2008 making the valuation completly up to date)

Cunningham House Balance Sheet value was not done in 2007 and was certainly not done at the height of the market.

Does any one seriously think that PWC would have permitted an over valuation (of course not).

There is a rental income due to the LLP for use of the building which could provide a Dividend to both parties in ratio to their shareholding.

Cunningham House has not been sold but a 20% stake in it has.

Assets.
The Electoral Commission have a quarterly return system for ALL accounting Units in which you have to detail changes to the following.

Loans – From any source.
Change in Terms of Loans – (Change of margin/term etc). New Loans, Changes in lenders, Changes in Terms and Conditions etc.
Donations above £1000.01 from an Accounting Unit or £5000.01 from the Party centrally.
Loans Repaid during the reporting period.

At the start of this process all of the up to date information had to be provided so that all Political Parties have to report on their quarterly returns are changes to the information previously held.

In terms of other assets, they are not required to be reported unless your accounting Unit has revenue above 25k in the financial year in question in which case audited accounts (which will normally include a full balance sheet) must be produced.

The UUP, on a smaller scale, would be similar to the Conservative Party in GB.

Can you imagine the accumulated value of the various Conservative Clubs, owned by local Associations, throughtout the country.

So CCHQ accounts/assets will never reflect their Constituency Associations balance sheet values.

The UUP is exactly the same. All that is in the accounts is the one building that was purchased/managed centrally.

Conservative and Ulster Unionist Joint Committee.

This Committee, seperately from both the UUP and the Conservatives, are responsible for raising funds to fight elections (amongst other things).

None of the money raised FOR the JC goes to the UUP.

The UUP has its own fundraising activities and has a party Officer with responsibility for this.

So I repeat again that never has it ever been discussed that the Conservative Party would provide any funding to the UUP.

The JC are organising several fundraising activities in the next 12 months and you would all be very welcome to come along and support the change that we are trying to bring about in both Northern Ireland Politics and throught the U.K.

Finally, other than Michael, I dont know who any of you people are but Bob did not have to “flush” the issues out.

I read his very good piece on the various parties finances and though I would help provide some help in terms of how the system works.

No other party provides anything like the depth and quality of information on its finances as PWC has historically done on ours.

Therefore no such informed debate such as this could also take place.

26 08 2009
cublue

‘Cunningham House Balance Sheet value was not done in 2007 and was certainly not done at the height of the market.’

The valuation was done on the 11th December 2007 by Myles Danker(UUP accounts 2007) close enough to the height of the market I would have thought, and certainly much higher than a December 2008 open sale valuation.

27 08 2009
Anonymous

-Mark says: Their is no contradiction in the two UUP statements. Our members were levied a record low (quota payments from Associations) but significant membership money helped maintain overall member income.

One word – THERE.

19 01 2010
Tories fund UUP elections? Really?? « Bobballs!

[…] so. This would directly conflict with the position set out by UUP Treasurer Mark Cosgrove to this blog in August last year. At the time, Mark stated to me: “We have not asked the Conservative Party, nor is there a […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: