Consumers Association of Ireland lays off all its staff

[Brendan Burgess]

From The[broken link removed]

The Consumers’ Association of Ireland is seeking Government funding to save it from extinction after temporarily laying off its staff of five last week and ceasing publication of its monthly magazine Consumer Choice, reports the Sunday Times.


Income at the advocacy group tumbled after Government funding ceased last year and membership fell from 5,500 in 2008 to 3,300. The association has written to the Government to say it cannot continue without intervention.


The association reported a deficit of €129,096 in the year to the end of May 2011 because of a 15 per cent fall in income from its magazine, which does not accept advertising.

Over the past ten years or so, I have suggested to the Association that they cease publishing their monthly magazine. I simply don't understand why they would need to it monthly. Quarterly would be fine or maybe even twice a year. I have also suggested that they make the content on their website free to everyone, member or not. I think that the government would be more likely to fund them if they did something useful like that.

The magazine absorbs all their resources and they spend very little time on actual consumer campaigns.

I have just checked out their website and find that they have two campaigns on their Campaigns page. "gift vouchers" from September 2011 and VAt on energy bills from August 2011. Most of the space is taken up with their logo which is usually a sign that an organisation is more thinking of itself than its stakeholders.

I have remained a member, out of a sense of duty, but I get no value out of my subscription. With a decline of 40% in membership, it seems that others don't regard it as much value either.

I would agree with the government funding an independent consumer group, but I am not sure that the CAI is effective enough to deserve it.

CAI letter to the government seeking funding.

Brendan

 

[MaryM]

From today's Sunday Business Post:

The Consumers Association of Ireland (CAI) has authorised an €80,000 pension top-up for its chief executive, Dermott Jewell, The Sunday Business Post has learned.

Details of the top-up have emerged as the cash-strapped association holds talks with a number of creditors over debts it has amassed, while also trying to secure a bailout from the taxpayer.

Accounts filed in the Companies Office by the CAI show the organisation's revenue fell to €417,000 in the year to May 2011, down from €703,000 in 2008. It had a deficit of €129,000 by the end of last year. The organisation now has just two employees, including Jewell, down from eight in 2008.
The CAI blamed its financial difficulties on a fall in income from its magazine, Consumer Choice, as well as a failure to secure funding from the Department of Enterprise.

The CAI has traditionally been funded through its own memberships - consumers became members by subscribing to Consumer Choice. The 2011 accounts show that the magazine, which the association recently stopped printing, generated an income of €362,000 last year, some €150,000 more than the €208,000 it cost to produce.

"In those accounts, there was a new requirement to value the premises. It impacted on it, as most of our resources go into production of the magazine," said Jewell when contacted last week.

The accounts also show a sharp rise in pension payments. Pension costs climbed from €38,000 in 2010 to €99,000 in 2011.

Jewell said that the defined benefit pension scheme ran into financial difficulty and that the money was used to bolster the scheme for its members.

"There was a deficit that the association tried to build up. We tried to fill the hole," he said.

The accounts state that some €80,000 in relation to compensation to staff members was accrued. There was just one active member of the scheme and three deferred members.

The CAI's trustees agreed that a lump sum of €80,000 should be paid to compensate Jewell for a proportion of his loss as a result of the pension fund deficit. When contacted last week, Jewell refused to discuss details of his pension top-up. He also declined to disclose his own salary, but said it was below €100,000 at present.

"I am not going to - and never have - declared my salary. It is private and personal. It is nobody's business," he said.

In the four years to 2011, the CAI's accounts show that some €100,000 was claimed on travel and meeting expenses. The CAI said the expenses were for "meetings throughout the year and also staff related, marketing related and European travel to commission meetings, working group and general assemblies of our sister organisations".

The CAI is overseen by a council of ten, which is chaired by Michael Kilcoyne.
The council hit the headlines in 2008 when three board members - Diarmuid MacShane, Mel Gannon and Enid O'Dowd - resigned over concerns about future policy, as well as their inability to access information on the running of the organisation.

"We were asking questions around payments, remuneration and the money people were getting from other board memberships, but our questions weren't being answered. Board members were having to consider Freedom of Information requests to access information. There was a huge level of secrecy with regard to what was going on," said one of the board members, who spoke on condition of anonymity.

Since January 2009, CAI council members have contributed 50 per cent of fees received from directorships and representations held on behalf of the association to the CAI.

The 2011 accounts state that the fees Jewell receives in respect of his representation of the CAI on boards are lodged to the CAI.
Jewell is also chair of the board of the Financial Services Ombudsman, and receives €21,600 per year for that position. He was appointed to the post in 2008.

He did not respond to questions from this newspaper relating to the fees he received for this board representation.

In recent weeks, the CAI met jobs minister Richard Bruton in an effort to obtain a cash injection from the taxpayer.

Michael Kilcoyne, who also serves as a member of Mayo County Council, said he was optimistic that the minister would approve a rescue plan. He said the CAI was in talks with companies it owed money to with a view to "putting payment plans in place".

 

[Lightning]

The Consumers Association of Ireland (CAI) has authorised an €80,000 pension top-up for its chief executive, Dermott Jewell, The Sunday Business Post has learned.

Details of the top-up have emerged as the cash-strapped association holds talks with a number of creditors over debts it has amassed, while also trying to secure a bailout from the taxpayer.

I find it hard to believe that Richard Bruton would give any money to Jewell, given his actions and the lack of any value that the CAI adds.

 

[mercman]

"I am not going to - and never have - declared my salary. It is private and personal. It is nobody's business," he said.

With an attitude like that, why or how should the Government make a cash injection into the CAI.

 

[Brendan Burgess]

With an attitude like that, why or how should the Government make a cash injection into the CAI.

I am a member and I pay €96 a year for membership. I think I should know what the Chief Executive gets paid.

I also don't like the idea of his being paid in excess of €100,000 for the performance that he gives.

I too would be shocked if Richard Bruton gave them any money.

Brendan

 

[Romulan]

I am a member also and seeing as it is a charity that takes my money, I want to know what he earns.

His response has made me completely rethink my future support even though I think we need a good consumer association.

 

[Time]

Do they not publish annual accounts?

 

[jhegarty]

I don't see anything on the webpage to suggest it's anything other than a for profit company that charges for reports.

There is far more content for the consumers of Ireland for free on this site.

 

[Romulan]

They do publish accounts each year in the magazine, I'd have to go back and look at the detail to see what it says about salaries.

 

[MaryM]

With an attitude like that, why or how should the Government make a cash injection into the CAI.

That was the line that made me post the article. What about its members? If it were a private business it would be different.

 

[Complainer]

I remember thinking about joining the CAI years ago, but there seemed to be no facility to join as a member. You could become a subscriber to the magazine all right, but not a member. It is effectively a private business - one that has latched onto a particular niche, but hasn't performed very well in living memory. I lost all respect for them around 2003 when the then Chairperson (Kilcoyne I think) called on the Govt to compensate Equity SSIA holders who had lost money in normal market falls.

 

[Calico]

Two things jumped out to me. The first is the €21,600 that the CEO gets for being on the Financial Services Ombudsman Council. From the article there seems there is a question mark about where that fee goes.

Also, I don't understand why the magazine was stopped when it made €150k profit last year. Seems like a bizarre decision when it's what responsible for the CAI's income.

 

[Time]

The CAI is a self appointed body with no actual mandate from the government?

 

[Brendan Burgess]

The CAI is a self appointed body with no actual mandate from the government?

No. It's a membership organisation and the whole point of it is that it is independent of government. Its objective is to represent cosumers and so it would be critical of government and business, etc.

there seemed to be no facility to join as a member. You could become a subscriber to the magazine all right, but not a member.

That might be the strict legal form because of it's a limited company, but in reality, as with a lot of charities, there is an AGM and you elect the directors. The directors become "members" of the limited company.

If a group of committed consumers decided to get together to reboot the CAI, then they could join up, join the Council and change it.

Dermot Jewell is protected by Irish labour laws as an employee and it would be difficult to remove him. The Chairman, Michael Kilcoyne, is a full-time trade union official, so it would be against his nature, to challenge an employee's performance.

 

[Calico]

That might be the strict legal form because of it's a limited company, but in reality, as with a lot of charities, there is an AGM and you elect the directors. The directors become "members" of the limited company.

If a group of committed consumers decided to get together to reboot the CAI, then they could join up, join the Council and change it.

But doesn't the SBP say that a group of directors had to resign because they tried but were unable to change it?

Dermot Jewell is protected by Irish labour laws as an employee and it would be difficult to remove him. The Chairman, Michael Kilcoyne, is a full-time trade union official, so it would be against his nature, to challenge an employee's performance.

If he is a trade union official, in my opinion I don't think was looking after the interests of employees by sanctioning an €80,000 pension top-up for one of them. Also the articles says that the CAI has gone from 8 employees in 2008 to 2, including Jewell, today which would have to raise an eyebrow.

 

[Brendan Burgess]

I don't think was looking after the interests of employees by sanctioning an €80,000 pension top-up for one of them.

This gives the appearance that the top-up was just like a bonus.

But, as I understand it, the CAI pension fund changed from a Deferred Benefit scheme to a Defined Contribution scheme. In principle, this would be good for the CAI as it would remove an unquantifiable liability. Presumably when employers do this, there is some adjustment made. €80,000 may be a good deal for Jewell or a good deal for the CAI. We just don't have enough information to know.

It appears that Jewell is very well paid for issuing occasional sound bytes.

I was at the AGM where the directors resigned. If I remember correctly, the board would not report how much Jewell was earning or how much he was earning from directorships. They were not paid back to the CAI at the time.

The article suggests that they are now being paid back to the CAI.

 

[Brendan Burgess]

The 2011 accounts show that the magazine, which the association recently stopped printing, generated an income of €362,000 last year, some €150,000 more than the €208,000 it cost to produce.

I don't understand why the magazine was stopped when it made €150k profit last year. Seems like a bizarre decision when it's what responsible for the CAI's income.

I don't think that the magazine made any profits last year. It comes out every two months. It had around 4 or 5 staff. It occupied other staff a lot of the time.

The article assumes that all income is due to the magazine. I don't think that this is so.I am not a member to get the magazine. I suspect that most members support the idea of a consumers' association whether they get a magazine or not.

The magazine was poor, very poor.

 

[Calico]

This gives the appearance that the top-up was just like a bonus.

But, as I understand it, the CAI pension fund changed from a Deferred Benefit scheme to a Defined Contribution scheme. In principle, this would be good for the CAI as it would remove an unquantifiable liability. Presumably when employers do this, there is some adjustment made. €80,000 may be a good deal for Jewell or a good deal for the CAI. We just don't have enough information to know.

It appears that Jewell is very well paid for issuing occasional sound bytes.

I was at the AGM where the directors resigned. If I remember correctly, the board would not report how much Jewell was earning or how much he was earning from directorships. They were not paid back to the CAI at the time.

The article suggests that they are now being paid back to the CAI.

You're right, there is not enough info. However, the fact that the organisation, which is now seeking a bailout, probably wasn't helped by paying €80,000 - almost a fifth of its annual income. Hard to know.

About the fees, I read that differently. I understood it to mean that some 50% of fees should be given back, and possibly are in some cases, but there is a question mark as to whether this applies to the €21,600 received from the Financial Services Ombudsman. I guess the accounts would answer this.

 

[Brendan Burgess]

I guess the accounts would answer this.

They don't answer it at all. There is very little information in them.

 

[Calico]

They don't answer it at all. There is very little information in them.

Hmmm, that in itself tells a story. Particularly as the CAI is an organisation that regularly calls for transparency from other bodies.

I would have thought that the CEO would want the fact that he gives back €10.5k to the Association for the Financial Services Ombudsman representation highlighted in some way. If it is not there, and given how the newspaper article was written, you would have to wonder. It would have been very easy for him to clarify anyway...