NI Water: CEO crunched by dual responsibilities?

By demand, here’s a chart explaining the different primary relationships within and between DRD and NI Water. The complexity was introduced by the introdcution of the designation “Sub Accounting Officer” for the CEO, Mr McKenzie. It may or may not make things clearer for those of you who still care.

This was on foot of a Treasury regulation which kicked in when the central ‘subsidy’ for Water Rates hit a certain level.

Although Lian Patterson, the deputy Perm Sec told the PAC this was to be for administrative purposes only, it seems in the latter stages of this story to have been used as a hard device by the department to override the independent scrutinising role of the Board of NI Water.

In the normal run of things, the Permanent Secretary only has indirect power to recommend the sacking and appointing of the Board but no direct ongoing relationship with them. However as Chief Accounting Officer, Mr Priestley appears to have required the Sub Accounting Officer , ie Mr McKenzie, to report directly to himself rather than to the board.

Here’s what John Simpson made of it:

The chairman, supported by the NEDs, believed that the CE had a first responsibility for governance in the board to bring critical issues to the board before reporting to the DRD.

Laurence McKenzie had and still holds a dual reporting responsibility created by Parliamentary rules. The interpretation of this governance requirement was disputed. [emphasis added]

Quite. Although we won’t know the full story of this until/if we get the detail, my own working assumption is that this hardened into a common or garden line management arrangement after the Board and the CEO fell into dispute over its three year PC10 (Price Control 2010) business plan.

Given that it is becoming obvious the IRT’s report had little to do with the sacking (since the board were not given sight of the internal review report before the IRT was in operation), there must have been some other reason for getting rid of the Board.