CWU Consolidated Accounts 2016 

CWU Consolidated Accounts 2016 
Further to LTB 191/17 dated 3rd April 2017 which invited questions to the 2016 CWU Accounts, at the closing time and date the following questions had been submitted by Harrow and District Branch:
Having looked at the financial statement 2016 for Trade Union Legal LLP (Unionline) the LLP owed CWU £2,159,347 for year end 2016 it was £1,099,440 year end 2015. This comprises unsecured loans and recharged operating costs. Where is this shown in the CWU accounts? There are no fixed repayments terms for the loan, how secure are the CWU funds loaned to the LLP what contingency plans are in place should the LLP continue to report trading losses.
In answer to the question “Where is this shown in the accounts” the loan is identified on page 22 note 17 and forms part of the “Other Debtors” figure note 8 page 18.
The recharge is not a cash transaction between the CWU and Unionline and as such dos not form part of the formal consolidated accounts, note 17 page 22 states “During the year the Union recharged for staff and administration costs incurred relating to the activities of the LLP”. This recharge is placed into Unionline accounts in order that when the company returns a profit and that profit is shared between the partners i.e. between CWU and GMB the recharge figures will be the basis for the profit to be calculated on for tax purposes.
The question regarding security of loans and any contingency plans are not questions to the published accounts, they are matters of policy and are and remain the responsibility of the Head of Legal Services to manage in conjunction with the NEC if necessary.
The Trade Union LLP (Unionline) has to date a trading loss of £6,458,139. There are currently around 8,300 live personal injury cases; whilst there is a probability that income will accrue on these cases it cannot be measured accurately however the contingent asset value for these cases is in the range of £4.6 m to 7m. Has there been any income from Legal Services this financial year and if so where is this shown in the CWU accounts. The contingent asset value of the current live cases does not have any timescales what contingency plans are in place regarding continuing funding LLP if future income is unclear.
Legal income in 2016 was £394,000 however the total cost of legal services provision outstripped this income and so the balance of income versus expenditure is shown in Note H on page 27 as an overall cost to the CWU of £55,215. The questions phrased around “contingency plans” is not a question to the CWU accounts 2016. It is a policy matter and is and remains the responsibility of the Head of Legal Services to manage in conjunction with NEC if necessary. 
The SDGS has done an excellent job in reducing costs at CWU HQ however the Trade Union LLP (Unionline) has increased both its staff and the subsequent cost from 33 staff at the cost of £786,366 to 54 staff at the cost of £1,275,339. The CWU accounts do not clearly show any income from Legal Services what input does the CWU have on the LLP operation and subsequent costs bearing in mind that the CWU and GMB have agreed to provide working capital and operating costs. If the costs continue to rise at the current rate and income continues to be unclear is there a timescale the CWU has for reviewing its involvement in the Trade Union LLP should the financial situation at the LLP become untenable. 
The first part of this “question” refers to internal matters within Trade Union Legal/Unionline, these are not matters pertaining to the published CWU Accounts 2016. The only question phrased here is around the CWU “input” to the LLP operation and future funding arrangements regarding working capital and operating costs and the question on a review of the CWU involvement in Trade Union Legal. Although phrased as a question again these are also not questions to the CWU Accounts for 2016. They are matters of policy and are and remain the responsibility of the NEC to deal with if necessary.
Any enquiries regarding this Letter to Branches should be addressed to the Senior Deputy General Secretary’s Department on telephone number 020 8971 7237, or email address sdgs@cwu.org.
Yours sincerely,
 
TONY KEARNS

SENIOR DEPUTY GENERAL SECRETARY 
 
Email Attachments – Click to download
LTB 217/17 – CWU Consolidated Accounts 2016

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